Summary:
- Logistics alone doesn’t drive MSME growth. Mobility and logistics become transformative only when markets generate enough value, demand, and coordination to sustain them. Market development creates the conditions for logistics, finance, infrastructure, and other supporting systems to emerge.
- There is no one-size-fits-all solution for market access. Nigerian MSMEs operate in fundamentally different market structures and use mobility and logistics for different “Jobs.” Effective interventions must be tailored to the type of market an enterprise serves and the specific progress it is trying to make, rather than assuming every MSME faces the same challenge.
- Markets and supporting systems evolve together. Sustainable improvements in infrastructure, finance, policy, and logistics occur when markets create enough value for all participants to continue engaging.
In May I published an article on emerging lessons from research we had begun on mobility, logistics and market access issues in Nigeria. Today, I’m back with an update.
We began this research asking whether logistics was the barrier preventing Nigerian micro, small, and medium enterprises (MSMEs) from growing. After months of desk research, stakeholder interviews, and ecosystem workshops we learned that perhaps that wasn’t quite the right question.
Movement definitely matters. But what became increasingly clear was that logistics only becomes transformative when the market surrounding an MSME has enough value, demand, reliability, and organization to sustain it.
In other words, mobility and logistics are not isolated constraints. They are part of a much broader market system.
Here are five things we learned:
1. Mobility and logistics depend on market value.
Our first insight is that logistics doesn’t create markets. Markets create the conditions that allow logistics to work.
As markets deepen, they pull in logistics providers, financial services, infrastructure investments, policy attention, quality standards, and even new social norms. But when markets remain thin or fragmented, the introduction of trucks, cold storage, warehouses, digital platforms, or roads might still fail to meaningfully improve MSME outcomes because there simply isn’t enough economic activity to sustain those services.
MSME growth shouldn’t depend indefinitely on donor support. Therefore, a better goal could be to help create markets where buyers continue buying, farmers continue selling, and service providers continue participating because each actor has a viable business model.
2. Different market structures require completely different mobility solutions.
One of the assumptions we challenged during this research was the idea that “market access” represents a single problem. In reality, MSMEs participate in very different types of markets.
Some sell into fragmented informal markets characterized by many dispersed buyers and irregular transactions. Others operate in thin markets where demand is simply too small to support formal services.
Then at the opposite end of the spectrum are structured demand markets where buyers are identifiable, transactions are frequent, and volumes are predictable. Alongside structured demand markets there are also highly integrated market systems where one organization coordinates demand, aggregation, finance, logistics, and anything an MSME might require to succeed, on behalf of and for the benefit of that MSME.
These distinctions matter because mobility and logistics perform very differently across each market type. A mobility solution that succeeds in one market may fail completely in another, not because the technology is wrong, but because the surrounding market has different economic characteristics.
Rather than asking whether MSMEs have market access, we should ask: What kind of market are they accessing?
3. MSMEs hire mobility and logistics for different “Jobs.”
Our research also challenged another common assumption of mobility being a single constraint. Instead, MSMEs “hire” movement to accomplish very different Jobs.
Personal mobility allows entrepreneurs to participate in markets by traveling to aggregation points or purchasing inputs. Equipment mobility enables productivity by moving the tools needed to work. Input logistics brings fertilizer, seed, inventory, or packaging to the business, while output logistics connects products to storage facilities, processors, wholesalers, and final buyers.
Each serves a different purpose and a different Job. Viewing mobility through a Jobs to Be Done lens reminds us that we cannot prescribe a universal logistics solution. A more relevant question is what progress an MSME is trying to make and what type of movement best enables that progress.
4. Logistics isn’t just expensive. It’s expensive relative to captured value.
During the research we encountered significant logistics costs throughout agricultural value chains. For example, one organization we spoke to reported spending approximately ₦184,000 per shipment for input distribution, ₦28,000 per hectare for harvest collection, and roughly ₦1.6 million to transport aggregated maize from storage to buyers. These figures are substantial.
But the more important insight wasn’t that logistics is inherently expensive. Rather, that logistics becomes affordable when those costs are spread across sufficiently large and reliable volumes.
For individual farmers or very small enterprises, these same costs are prohibitive because the market simply doesn’t generate enough value for them to capture.
This insight helped us come up with another question. Should farmers be expected to own logistics assets or manage transportation networks themselves? Or should markets evolve in ways that allow farmers to specialize while complementary actors organize logistics around them?
5. Markets and systems will co-evolve.
Perhaps the broadest lesson from this research is that markets and systems evolve together.
As markets expand, demand eventually reaches a point where supporting institutions are pulled in. Infrastructure improves, financial services emerge, policies adapt, standards develop, and even cultural norms can evolve.
Kenya’s mobile money ecosystem provides one example. M-Pesa scaled before much of the regulatory environment surrounding digital payments existed. As adoption accelerated, payment regulations, interoperability standards, and digital identity systems gradually followed.
China’s e-commerce sector demonstrates a similar pattern. Rapid growth in online commerce created demand for logistics parks, warehousing, broadband infrastructure, and digital payment systems that expanded alongside the market itself.
This doesn’t suggest governments should wait passively for markets to develop. History also provides examples such as South Korea, where public investments in ports, technical education, and export infrastructure deliberately accelerated industrial growth.
Rather, the lesson here is that durable systems emerge when enough value exists to sustain them. Whether systems lead markets or markets pull systems in, long-term success depends on creating value that encourages continued participation by everyone involved.
What’s next?
These insights have led us to refine our research, and the next question is:
How do we intentionally create markets with enough value to organize the systems that MSMEs need to grow?
Because while logistics, finance, infrastructure, and policy all matter, they ultimately become sustainable when markets generate enough value for every participant involved.
Stay tuned.
