Are you looking to start an exportation business in Nigeria, or do you wish to start importing business there? Or you want to start importing or exporting to Nigeria from overseas? Perhaps you wish to know what are Nigeria’s top export and import products and business opportunities, ideas? Anyone, looking to start a business with Nigeria or in Nigeria, must learn about this country’s business environment, specifics, and opportunities first.
The following article will guide you with starting or growing your own international business in Nigeria or with Nigeria. We will show what are the top export-import products of Nigeria and how to start business there.
Lets first shortly learn about this country’s business environment first. After that, we will look, what products you could export or import in Nigeria.
About the Nigeria business environment and specifics
Nigeria is a country in West Africa and is among the most populous countries of the continent and the 9th most populous in the world. In 2019, its population was more than 200 mln people, based on Konema.
Thanks to the policy of diversifying the economy through investments into agricultural development, telecommunications, and services, the Nigerian economy has developed dynamically in recent years. The average growth rate is 6-8% / year. However, 2015 marked many difficulties for the economy of Nigeria due to plummeting oil prices whereas the country’s economy is highly dependent on oil exploitation.
- Nigeria is rich in agriculture. Major agricultural products include cocoa, peanuts, coconut palm, cereals, rice, sorghum, millet, soybeans, cassava, rubber, and sweet potatoes.
- Nigeria’s major industries include processing agricultural and mineral products, textiles, construction materials, footwear, chemicals, fertilizers, and tin.
- Nigeria is an important transshipment point for West Africa with four major ports: Lagos, Warri, Port Harcourt, and Calabar. Many products South Africa exports, are actually from Nigeria.
Read also: Start an export-import business in South Africa.
Top 11 export products of Nigeria
If you want to start exporting business in Nigeria, then start from learning, what Nigeria actually exporting to the world. Following are Nigeria’s top export products, with what Nigeria is competitive in the world market.
1.Cashew nuts
In Nigeria, cashew nuts possess leading high value, as they can not only be used as food but also industrial raw materials for the production of chemicals, oil paints, pesticides, fungicides, electrical wires and different oils. Cashew shell includes cardanol-oil which is organic phenol, for various industrial purposes.
Cashews are health essentials, reducing cardiovascular and blood risks, protecting eyes, supporting weight loss, and preventing cancer … Cashews are high in fat and rich in vitamin E, magnesium and zinc. Therefore, this nut stands an essential ingredient for pharmaceutical and dermatologic products.
Nigeria exports to the US, India, Spain and many regions in Europe, including the Netherlands.
2.Cocoa
The main cocoa harvesting in Nigeria’s two main production areas starts in August. The middle season is usually lower in quality than the main crop, offered in July at a much lower price. Normally, cocoa prices will increase when the main crop harvesting starts every year. Traders and exporters participate in the market very actively during the main season to buy, sell and export cocoa. Many export companies in Nigeria, focus on cocoa and its related processed products as the main business.
Heavy rains affecting the main cocoa crop harvesting, are also one of the reasons for the price rise. Nigeria is the fourth largest cocoa producer in the world, with an annual output of about 240 thousand tons.
3.Crude Oil and related products
Nigeria has the largest oil and gas reserves in Africa South Sahara (34 billion barrels and 2000 billion cubic meters of natural gas), therefore the oil and gas industry is the spearhead industry of Nigeria, contributing up to 95% of foreign exchange revenue and the majority of government revenue. Other assets include tin, iron ore, coal, limestone, lead, zinc, and gold.
The USA refiners have now increased imports of crude oil from Iraq, Nigeria, Brazil, and Angolan.
Oil export is crucially important for the Nigerian economy, it determines growth or recession in the country. From the total export value, oil and oil products make up about 94%!
4.Ships and boats
Africa is widely surrounded by sea and Nigeria is a country with many ports. That’s why Nigeria is a sea country and has its own shipbuilding industry, which is growing fastly and bringing in a lot of foreign currency reserves to the Nigerian government.
In 2018, Nigeria has built and sold ships and boats to the other countries in the total value of more than 1,3 billion USD.
5.Rough wood
African hardwood is known for its strength and it is also used in the furniture industry. Nigeria exports yearly, wood in total value about 321 mlj USD. But recently the Nigerian government has put on a place high restrictions for logging to save the forests and animals living there.
6.Fruits, nuts
Bananas, mangoes, edible fruits, peel of citrus fruit, melons and other fruits from Nigeria count about 190 mlj USD yearly.
Nigeria exports a lot of dryed fruits. Dryed fruits have a growing demand globally because dried fruits can last long.
7.Oilseeds
The total yearly export volume of the oilseeds from Nigeria is about 275 mlj USD. Mainly Nigeria exports Soya seeds and sesame seeds, Sesame seeds are being exported widely to Japan.
8.Fertilizers and pesticides
Nigeria exports different organic and inorganic fertilizers in the total value of about 170 mlj USD per year.
9.Tobacco and related products
Yearly export of this commodity counts about 97 mlj USD. Nigeria also manufactures tobacco substitutes and exports these. The main markets are USA, EU, Japan, China, India.
10.Aluminum
Nigeria is rich of metals and ore. Nigeria exports yearly aluminum, in the total value of roughly 75 mlj USD.
11.Plastics and plastic products
Plastic is a product, made from natural oil, so Nigeria has a competitive advantage to produce plastic at low costs. In 2018 Nigeria exported plastic products in total value more than 71 mlj USD.
If you want to start the exportation business in Africa, then you should analyze the above given main categories further and dive deeper. You should select nice products out of the big, main product categories.
Top 11 import products of Nigeria
If you want to start a large importing business or mini importation business in Nigeria, then, you need to be aware of what kinds of products are mainly imported to Nigeria first. The rising middle class in Nigeria makes importation business very lucrative in Nigeria.
1.Rice
Nigeria annually imports the third-largest amount of rice in the world.
Nigeria has imported nearly 17 million tons of rice over the past 5 years; and 2.3 million tons of rice in 2016. The demand for rice in Nigeria in 2016 was 5.2 million tons. The country spends about 5 million USD / day on rice imports. In 2017, rice accounted for 1.26% of the total yearly spending.
2.Fish
Fish is one of the most nutritious and affordable food sources for the vast majority of low-income Nigerians.
Every year, the demand for fish is about 1.4 million tons, while the production of aquaculture and fishing only meets half of the need.
Fish imported to Nigeria are mainly herring, mackerel, sardines, croaker, frozen blue whiting. The total import volume is approximately 750,000 tons/year.
3.Mobile phones
Nigeria is becoming one of the fastest-growing mobile phone markets in the world. There stand the increase in mobile users, the complexity of telephone network infrastructures, and the competitive pressure in the market. All of which create fruitful opportunities for operators to make large investments to ensure the provision of high-quality telecom services.
Nigeria’s current telecommunication infrastructure is not mature enough to keep pace with the growth of the mobile phone market.
If you wish to start a small or mini importation business in Nigeria, then importing cell phones from China and sell locally, presents a great opportunity. Most of the cell phones are being imported from China.
4.Industrial machinery
With the rapid development in industrial sectors of Nigeria, the advanced machines are needed. Machines for chemical processing, metal processing, oil processing, food processing, etc are mostly being imported from China and India.
If you have connections in some industries of Nigeria, then it can be relatively easy to contact the factories and ask, do they need some advanced machines.
5.Packaged medicaments
Nigeria and other African countries face health threats, mostly caused by poor hygiene and sanitary conditions. The country doesn’t have its own strong and advanced pharmaceutical industry, so mostly all advanced medicaments are being imported from the USA, Europe, Japan, India.
It has been counted, that yearly Nigeria imports packaged medicaments in total value more than 1 billion USD.
6.Cars and motorcycles
Developing infrastructure and growing middle class creates the demand for cars, motorcycles and other vehicles. Yearly import value of such items has been counted about 1,3 billion USD and is growing fastly.
African countries and especially Nigeria is famous of importing used European cars.
7.Cereals
Because of the hot and dry climate, many cereals don’t grow in Africa. Nigeria import cereals like …from Europe and the USA. Import value at 2018 was 1,2 billion USD:.
8.Essential and vegetable oil
Mostly Nigeria imports Palm oil because it is cheaper compared to other vegetable oils. But it also imports sunflower oil, soybean oil, rapeseed oil.
Trading companies in Nigeria can consider importing high-quality rapeseed oil and canola oil from Europe and sell to local middle class and premium restaurants with a premium price.
9.Tomatoes
Surprisingly, tomatoes are in high demand in Nigeria, both fresh and canned tomatoes. Nigeria’s own tomato production is not enough large to satisfy the local demand, so big volume is being an importer.
But, the Nigerian government has been decided to ban tomato imports during the next few years and develop Nigeria’s local sufficient tomato production.
10.Corn
Nigeria imports about 400 tons of corn per year. Peak was in 2016 when imports exceeded 650 tons. Local farmers need corn largely for animal feed and commercial starch production.
But here also, the government is looking to establish self-reliance from local corn production and is developing its industry and plan to restrict the imports of maize during the next few years.
11.Medical equipment and apparatus
Widely imported from India.
If you wish to start small importation business in Nigeria, then dig deeper choose the niche product out from the above mentioned main categories. There are real opportunities for small and big importers. Most important is to do market research and find the product with a promising margin. We advise to do research for your local city and focus there, as Nigeria is a big country.
As Nigeria has lot of trading with India, we advise further reading: Top exports of India.
How to start exporting to Nigeria
The following steps are for those, who wish to start exporting to Nigeria. It has been said advance, most important is to find reliable Nigerian importer or partner.
Step 1: Select the right products
Nigeria currently has a great demand for technical products such as agricultural machinery and supplies, fertilizers, and pesticides. The Nigerian market is welcoming imports from Europe and elsewhere.
Based on the market needs, potentials and strengths of your export products, you can focus on boosting your export based on the following commodity groups:
- Processed food, seafood, and other consumer goods: The market demand is about 3 to 4.5 billion USD annually.
- Rice: Nigeria needs to import 1.4 million tons of rice annually, which is a great potential for rice exports from India and Southeast Asia.
- Textile products: Currently It is a great export opportunity into the market segment of cheap common garments such as T-shirts, jeans, shorts, office wear, and school uniforms.
- Electrical devices: Electric cables, transmission lines, power stations, and construction materials. The annual import demand for this commodity is about USD 4.5 billion.
For getting ideas about the process of choosing products, read our article: How to choose products for export.
Besides, you should study the possibility of building and operating hotels and entertainment resorts in Nigeria. This is one of the most profitable investment fields and has the fastest payback nowadays in Nigeria.
Step 2: Choose distributors/clients
The international trade fairs in Nigeria are a good opportunity for you to find investment opportunities, Nigerian buyers, and export partners.
However, Please note:
– Fraud, in Nigeria particularly and in Africa generally, is highly common. Before signing a contract, take caution and DO NOT TRANSFER ANY MONEY in advance to foreign businesses in Nigeria. It is easy to lose the money like this and it will all most impossible to get it back.
– Form of payment: If signing an export-import contract business, it is advisable to apply the form of “Irrevocable L / C, At sight” letter of credit, do not use payment methods such as T / T, DA!!
Read further: How to get export orders abroad and how to fulfill these.
Step 3: Prepare export documents
- The SONCAP certificate ( SON Conformity Assessment Programme) is a mandatory document for clearance at Nigerian ports. When completing customs clearance, the importer must perform a SONCAP certificate to the Customs and SON Office.
Goods that go through customs clearance without this document may be rejected, the exporter may have to re-export the goods and bear all costs, or the goods may be sent for inspection at the inspection agencies, and exporters must bear all expenses caused by the delay of presentation or without SONCAP certificate.
SONCAP allows products to be exported to Nigeria, SON has opened a representative office in some areas around the world. In Asia, SON has offices in China, Korea, and Singapore.
As an exporter, you shall make sure, that this certificate is available, when Nigerian importer start clearing the import customs for your goods in Nigeria.
- NAFDAC certificate
All food, pharmaceutical, and beverage goods manufactured, imported, exported, advertised and sold or distributed in Nigeria, must be registered with the Department of Food Inspection and Management and National Product (NAFDAC), and the Government of Nigeria. (This paper is valid for 5 years)
It is illegal to import into Nigeria without NAFDAC. Foreign manufacturers and exporters must carry out the necessary procedures to apply for the NAFDAC certificate before exporting to Nigeria.
In case of violation, the goods will be put into a bonded warehouse, the importer must pay the cost and be prosecuted.
- Form- M
Goods imported into Nigeria must have the following set of documents:
- The certificate of combined value and origin (CCVO), and must contain additional information for the details of the proforma invoice. (Please apply at VCCI issuing team)
- Number of Form M
- A detailed description of the goods
- Arrival port (Actual port must specify, for example, Tin-can, Apapa, Kano, Onne …)
- Shipping signs, date of loading, the board of origin, country of supply.
- Packing slip
- Clean sea bills of lading / Air waybill / Road waybill
- The production certificate of the manufacturer with production standards inscribed, and in case it cannot be specified, prepare the additional plant quarantine certificate or chemical element analysis report.
- Certificate of laboratory inspection of chemicals, food, beverages, western medicine, electrical equipment, and products
If you want to export goods to Nigeria, you must first complete the form M through any authorized commercial bank. There is no need to mention the value or payment.
Form-M will be valid for 6 months for all imported goods, except Plants and Machinery, which will be valid for 1 year. The request for extension of Form M must be submitted to the Director-General, Department of Trade and Transaction, and Nigeria Central Bank, Abuja.
Regarding export procedures and documentation, we advise reading our article: Export documentation and procedures.
How to start importing business from Nigeria
Following instructions are for those, looking to start importing some specific products from Nigeria and reselling those in your local market or elsewhere. The selection of the right products and finding a trustworthy partner from Nigeria is the most important success factors.
Step 1: Determine the goods to be imported
Nigeria offers a wide range of products, but you have to carefully identify which one is right for the market of the area to which you distribute your goods.
- You need to carefully consider whether the goods you are about to import from Nigeria may sell well in your local market or not. Determine when to import goods. (There are goods that can be sold in one season but difficult to sell in another season such as fruits, winter clothes, etc.)
- Check if the seller is really a trust-worthy company based on their proven track record.
- In different cases, you can create and develop a domestic market for “niche products” (products are not provided much yet).
Step 2: Choose the suppliers
There are currently many sources of in Nigeria that can help you find and identify effective suppliers:
- Online sources: trade portals, websites, blogs, magazines, …
- Offline sources: trade fairs, consulates, chambers of commerce, word of mouth, …
With any choice, you must check the reputation and reliability of the supplier. You can ask the following questions from suppliers.
– How long has their company been in business?
– Is this company a legal entity?
– Have they ever exported their products to your country? If yes, ask them to provide you with existing customer information?
NB! We have a free checklist for identifying and inspecting the suppliers.
Step 3: Negotiate with the suppliers
Before signing a contract with a supplier, discuss and negotiate with the seller about the terms of sale, payment methods, packing and delivery methods and liabilities.
You can clearly outline the main points of the contract such as:
- The applicable law for the contract
- Each party’s responsibility
- Terms of delivery and terms of sale
- Commodity prices
- The agreed place of delivery: port, warehouse, …
- Payment method: COD, L / C, …
- Product specifications such as product licensing, licenses, etc.
You should read, understand, and determine the Incoterms best suited for your business before agreeing on the terms of sale. Many frauds, deception, and mistakes occur only because the buyer and seller do not understand the Incoterms used.
The best way, to ensure the partner is reliable and all is clear, is to go meet your partner in real life for signing the contract.
Read further: Biggest risks in export/import business and how to overcome these.
Step 4: Visit your local customs office
Before start importing, each importer needs to register with the customs office in their country to receive the importing license. You need to contact agents, shipping lines, customs, ports, and chambers of commerce to learn more about their roles and how they work. You as an importer should make sure the following questions.
a. Are the goods you want to import licensed?
b. Are there any restrictions or licenses needed?
c. How much is the import tax for the planned products?
The tax and tax incentives you qualify for depending on the company, product, country of purchase, etc. Your home country custom is best and most accurate source for this information.
Step 5: Track the order of the process
Verify that your cargo is actually onboard, familiarize yourself with the route that your cargo will follow, and how long it will take to transport.
1. Track shipments with both agents (if you use import export agents) and shipping lines.
2. Insurance: You need to ensure that the goods are insured through a reputable cargo insurance company. The following terms should be covered in freight insurance.
- Damage during transportation
- Shipper delay delivery
- Dem / Det (Demurrage and Detention) fee due to shipper sending wrong documents
- Unloading and checking charge
- Fluctuation rates
For finding and keeping customers for your business, we advise reading also: How to find and keep customers for your export/import business.
Conclusion
There are lot of great opportunities for starting an import-export business in Nigeria nowadays or start exporting there. But there are lessons to be learned: First, be very careful about choosing a partner. The biggest mistake is to choose an incompetent or dishonest distributor or partner. This will be both time consuming and wasting of money.
The second mistake is the thinking of “it is easy to succeed in Nigeria”. Nigeria is the test playground for new businesses entering the market. “If you can get through the Nigerian gate, you can do it anywhere,” the local business said. The disadvantages of infrastructure, roads, and languages are considered a major barrier for your import-export business in Nigeria.
If you wish to start exporting or mini importation business in Nigeria. Or you are from another country and you wish to export to there or import from, then first invest in practical and useful knowledge.
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- Resources and action plan for exporters/importers, online sellers.