How To Start An Export Business In Nigeria

Beyond the Oil and Gas industry, there are still other prospective businesses in Nigeria that business owners can explore. One such business is the export business.

Basically, every nation depends on each other to survive which is why we have importation and exportation of goods and services. Exporting of goods and services helps a country grow its GDP. However, this area is still under-explored by the Giant of Africa, Nigeria.

Deciding to venture into the export business is as important as deciding what to export. Still, there is innumerable economic benefit in venturing into the export business.

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Export Business In Nigeria

Firstly, export is the sales of goods across national boundaries. It is a sophisticated business which requires a high level of pro-activeness and the ability to keep up with the demands of the global market.

It can be done by a supplier or the company that manufactures the products. The most important thing is for the goods to be conveyed to the final destination.

In Nigeria, as long as you are under the regulation of the authorised council, you can export goods and services to other countries across the world.

Going forward, we will take a look at the statistics of export business in Nigeria as of 2019 to give us a bit of perspective.

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Statistics Of Export Business In 2019

Nigeria is one of the export countries in the world, holding the 51st position. According to Worldstopexports.com, it shipped US$53.6 billion worth of goods around the globe in 2019. The total exported goods represent 4.4% of its overall Gross Domestic Product.

Also, the report highlighted 100 most valuable export products that amounted to the increase in the GDP. Some of the products exported include; crude Oil (highest), petroleum gases, breaker vessels, flexible base metal tubing, light vessels, fir boats, floating, docks, ships, aircraft, aluminum, lead, lead ores, coal, solid fuel, natural sands, copper foil, iron or non-alloy steel angles, shapes, natural gums, wood charcoal.

Also, it exported items like cigars, natural rubber, sheep/lamb leather, machinery plants, jars, pots, malt bears, fresh or dried flowers, husks, skins, plastic plates, sanitary rolls, footwear, wrist/pocket watches, natural sands, lifting/loading machinery, hard rubber, hair preparations, plastic waste, plastic, wigs, eyelashes, fluorine, chlorine, knit/crotchet fabrics, stoppers, and many others.

Then, food items which include; oil seeds, cocoa beans, cashew nuts, coconuts, Brazil nuts, cocoa butter, cocoa paste, pasta, soups, broths, spices, non-alcoholic drinks, medicinal plants, sweetened milk, cream, sauces and condiments, bread, biscuits, buttermilk, fruit and vegetable juices, sugar confectionery, chocolate, vinegar, vegetable oils, beans, lentils flour e.t.c

All of these goods were worth a subtotal of US$53.6 billion by value for all products exported from Nigeria in 2019.

And the top export destinations include India, Spain, Netherlands, Ghana, France, South Africa, United States, Italy, China, Indonesia Turkey, Canada, United Kingdom, Ivory Coast, and Germany.

Steps To Begin An Export Business

With the above statistics, it is important for prospective entrepreneurs who have an interest in inter-country trade to understand that there are opportunities in the export business.

We will go ahead to highlight the steps to start an export business.

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a. Business Registration

Irrespective of the kind of business you want to venture into, registering the business with the right authority should be the first step. In Nigeria, the Corporate Affairs Commission (CAC) is an authorized business registration agency.

It was established in 1990 via the Companies and Allied Matters Act No 1 (CAMA) 1990. It is a body charged with the responsibility to regulate the formation and management of companies in Nigeria.

Depending on the type of business structure you want to operate, you can register as a business name, limited liability company, Non-Governmental organisation, etc. Each business structure requires different documentation to get registered. You can reach out to us to guide and help register your business.

By registering your business, you join the league of certified business owners and can access loans as well as other benefits tailored to entrepreneurs.

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b. Nigerian Export Promotion Council

Secondly, you will proceed to register with the Nigerian Export Promotion Council (NEPC) for an export license and document. This body serves as an exporters’ directory.

It provides a platform for prospective buyers to source for information on reliable exporters. Also, it verifies the exporter’s certificate and represents the interest of Nigerian sellers before international buyers.

In addition, the NEPC has procedures and documentation process that enhances understanding of the export business. It provides prospective exporters with a guide arranged in 9 steps; E-registration, Export plan, Document and Procedures, Logistics and Freights, Pricing, and Finance and Legal issues, e.t.c.

By listing your business directory on NEPC, or other export directories, you can take orders from any location. All you need is to log on to the website, download the requirements and follow the process.

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c. Structure

After procuring the licenses and permit, you are on your way to becoming a legit exporter. The permit gives you the access to ask questions and make clarifications on the business from NEPC.

Also, you will need to set up a proper structure for credibility and accessibility. Therefore, you need a professional address or a virtual office address; You can use ReDahlia Workspaces virtual office address package. This way, your business will have a professional appeal and buyers can be confident to do business with you.

Also, having a website or a landing page for customers (importers) to locate you and make their demands is a necessity. In addition, it is important to register your company on some trade websites and create visibility for your business to attract customers.

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d. Source For Direct Producers And Suppliers

As soon as you conclude on venturing into the export business, the next thing is to find the producers or suppliers of the goods you intend to export. You can also produce if you can meet the demands. But if not, try to establish a link with other producers and reach an agreement.

To begin, you can visit the production site of the goods you want to export or establish a communication channel with the producers or farmers of the products you want to export. For example, farmers in Kaduna, Jos, Jebba, Nasarrawa e.t.c are known for charcoal production while North And Central Nigeria are known for Sesame Seed.

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e. Invest In Advertisement And Online Marketing

Except you already have a sealed deal with buyers who will buy all you want to export continuously, there is a need to invest in online advertisement and marketing. Your online advertisement should be targeted to the countries you want to export to.

Before getting to this stage, you have already decided on the product to export and the product must be in demand in the country you are exporting to. Once the home work has been done, running targetted ads becomes easy.

Also, you should not leave out social media. On social media, you can use the right keywords and run targetted ads that will get to your target audience.

In addition, leverage online trade directories like Alibaba.com, tradekey.com, busytrade.com, inda-mart.com, howtrade.com, importers.com, linkedIn e.t.c

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f. Export Your Products

To export your goods, you can use freight forwarders; they specialise in moving goods to different places in the world. You can also arrange that they do everything from arranging insurance to finding a reputable customs broker.

Also, you can use a custom broker; these set of people will clear your goods through customs. In several countries, only a local and registered official can do this.

The shipment could be done on either Free On Board (FOB) or Cost, Insurance and Freight (CIF) basis. FOB means the buyer covers the cost and liabilities once the goods are shipped while CIF means sellers cover the cost of everything including insurance and transporting until the buyer receives the goods.

Also, there are other basic documents required for exporting goods. They are; commercial invoice, packing list, certificate of origin, certificate of insurance, bill or landing (sea or land) or an air waybill, certificate of inspection, import licenses, e.t.c.

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What To Export Out Of Nigeria

Generally, there are several goods that sell in the international space. Just as each country has natural resources that are unique to them, Nigeria has a lot of natural resources that are in demand in other countries and therefore can be exported.

For instance, in Nigeria, exporting agricultural produce is a good way to begin. There are several agricultural products in Nigeria which are in high demand in other countries.

Some of the agricultural products you can start exporting are:

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a. Sesame Seed

Nigeria is one of the top global producers and exporters of sesame with many years of stable production. Nigeria is the 7th largest producer of sesame seed worldwide and about 80% of her production is exported.

It contains relatively high nutritional content with health benefits, and 99% minimum purity. The demand for the seed keeps growing at the rate of 4% yearly and two of its important destinations include the Middle East and Asia.

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b. Nut

Cashew nut, Kola nut, and other kinds of nuts are said to have high health benefits therefore, they are on high demand in the international space.

Nigeria covers about 20% of world in-shell cashew production and is a leading exporter of cashew nuts and the fourth-largest producer worldwide. The major importers are India and Vietnam.

c. Bitter Kola

Bitter (Gracinia) kola is in great demand in countries like America, Japan, India, France, Britain, Germany, China, and other Asian countries. It is mostly found in African countries and Nigeria is one of its largest exporters.

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d. Ginger & Garlic

This is one of the most traded spices in the world. Its health benefit is limitless and as such is in high demand. They are readily available and can be exported with ease following the steps we listed.

e. Charcoal

There are different types of charcoal to export. There are hardwood charcoal, charcoal briquettes, BBQ Charcoal, and Shisha Charcoal. It is produced in places like Nassarawa, Jebba, Oyo, Egbe e.t.c. and is one of the most exported products in 2019.

Also, the quality of the charcoal produced in Nigeria is one of the best in the world. Hence, Asian, European and American countries make high demands from us.

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f. Cassava

Nigeria produces almost a third more volume of cassava compared to other African countries, including Malawi, Cameroon, Mozambique, Benin, Rwanda, Madagascar, Uganda.

Also, over 800 million people world-wide depend on cassava as a regular source of energy. For example, Cassava tubers may be processed into different kinds of products such as chips, starch, pellets, flakes et.c. All of these are in high demand in UK, Germany, France, Netherlands, and other countries.

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g. Cocoa

There is no gainsaying that cocoa is used for chocolate, beverage, health and pharmaceutical products and therefore in high demands in virtually all the countries of the world.

Nigeria exports thousand tons of cocoa on a yearly basis, with an increase by 20% from 2016 to 2017.  It is the fourth-largest producer, covering a 6.5% share of global production, with a 4% growth projection per annum in subsequent years.

Also, the cocoa beans account for almost 90% of the 804 million USD of Nigerian cocoa exports. Cocoa butter and cocoa paste are exported quite significantly. It is in high demand in Netherland, USA, Malaysia, Belgium and other countries.

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h. Plantain Flour

Nigeria is the world’s fourth largest producer of plantains, with 2.8 million MT annually after Ghana with 3.6 million MT according to the Food and Agricultural Organisation (FOA).

Apart from the local demand for plantain flour in Nigeria, large number of Nigerians and other Africans living in Europe, America and Asia has made packaged plantain flour export business lucrative.

i. Edible Oil

There are several kinds of edible oil in Nigeria and each of them is fit for exportation. Palm oil, palm kernel oil, sesame seed oil, coconut oil, vegetable oil, and others are in high demand in Asia, India, Netherland, Italy e.t.c.

For instance, palm kernel oil can be used for manufacturing creams, cosmetics, pharmaceutical products, and confectioneries. These oils are said to be rich in protein and other classes of food nutrients.

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j. Fruits And Juices

Indeed, Nigeria is a blessed nation with diverse kinds of fruits that are highly beneficial to humanity. These fruits are considered exotic in international countries therefore, they are in high demand. From fruit, one can produce different kinds of juice and package for export.

Also, other agricultural products you can sell are; cocoa, chilli pepper, bean flour, potato, ginger beer, kilishi, soybean, honey, snail, catfish, butter, medicinal plant, full cream, etc.

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Conclusion

Like every other business, the export business has its challenges. This guide is not exhaustive, but it will get you started on your journey as an exporter. Also, you have to apply some of the principles we preach here like developing your business model if you want to succeed in your export business.

In conclusion, you can always start small. You don’t have to start with millions of Naira. Start small, learn the trade and gradually scale your business.

Do you run an export business or do you intend to start an export business? We will like to hear your thoughts in the comment.

Let the world know what you are doing and the change you are creating in your industry. Contact us today to put your business on the world map.

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