Impact of freight logistics inefficiencies on economic output in Nigeria
DOI:
https://doi.org/10.51359/2594-8040.2025.267050Keywords:
freight logistics, economic output, Nigeria, logistics inefficiency, ARDL ModelAbstract
This research investigates the impact of freight logistics inefficiencies on Nigeria’s economic production by combining theoretical modelling with econometric analysis. Methodologically, the study employs an autoregressive distributed lag (ARDL) framework to quantify short-run and long-run impacts of logistics inefficiency on Nigeria’s output, applying cointegration methods to identify equilibrium relationships. The findings indicate a strong long-run negative association between Nigeria’s real economic production and freight logistics inefficiencies: long dwell times in ports, transport congestion, and freight costs have substantially dampened Nigeria’s GDP over recent decades. The estimated elasticity from the ARDL model is about -0.33, clarifying that this is an econometric result, and the error correction term from the model shows fast convergence towards long-run equilibrium after inefficiencies are reduced. The evidence highlights that enhancing logistics performance would generate significant increases in production, consistent with theoretical predictions and global evidence. Adjustments in the short term are partial, but the significant error-correction term indicates rapid adjustment to equilibrium once inefficiencies abate. The paper provides econometric tables of ARDL estimates with strong diagnostics and significance for key variables. The results underscore that reducing bottlenecks and improving logistics infrastructure would boost trade, increase productivity, and enhance economic growth. The study concludes with policy prescriptions such as transport infrastructure upgrades, port reforms, technology adoption, and regulatory improvements, as means to address freight logistics inefficiencies, which are essential for Nigeria to unlock higher growth and fully leverage its trade potential.
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