Nigeria’s total merchandise trade in Q1 2024 was recorded at N31,810.59 billion, according to the National Bureau of Statistics.
Export accounted for 60.25% of this trade, valued at N19,167.36 billion. This represents a 51.00% increase from Q4 2023 (N12,693.62 billion) and a 195.47% growth compared to Q1 2023 (N6,487.04 billion).
This data highlights that Nigeria’s export business is a promising sector for individuals to explore and potentially profit from in the coming years.
The aim of this article is to guide interested individuals on how to successfully start an exportation business in Nigeria. This business can be operated from home and this knowledge would be shared all for free.
In light of this, let’s begin by first detailing what exportation business really means.
What is an exportation business?
Exportation business refers to the process of selling goods or services produced in one country to buyers in another country. In simple terms, it involves shipping products made locally to international markets for profit. For example, if a company in Nigeria grows cocoa and sells it to companies in Europe, that’s exportation.
It’s an opportunity for businesses to expand beyond their home country, reach more customers, and increase income by tapping into global demand for their products.
In Nigeria, with growing export numbers, it can be a profitable venture for those interested in international trade.
Benefits of starting an exportation business in Nigeria
1. Access to Larger Markets: Starting an exportation business allows entrepreneurs to tap into global markets, significantly increasing their customer base beyond local demand.
2. Diversification of Revenue Streams: Exporting enables businesses to diversify their sources of income. Instead of relying solely on domestic sales, companies can spread their risk by generating revenue from various international markets.
This diversification helps protect against local economic fluctuations or demand changes.
3. Government Support and Incentives/grants: The Nigerian government has introduced various initiatives and incentives to promote export activities, such as grants, export expansion funds, and favourable tax policies.
These programs help reduce the financial burden for new exporters, making it easier to enter the international market and grow their business efficiently.
Procedures to start an exportation business in Nigeria
Starting an exportation business in Nigeria involves a structured process. Here are the key steps to follow:
- Business Registration
- Obtain Exporter’s License
- Choose Your Export Product
- Conduct Market Research
- Ensure Product Quality Compliance
- Source Suppliers or Produce Goods
- Arrange Logistics
Business Registration
The first step is to formally register your business with the Corporate Affairs Commission (CAC). This process involves selecting a unique business name, providing necessary documentation, and paying the required fees.
By registering with the CAC, your business becomes a legal entity, which grants it the ability to enter into contracts, open business bank accounts, and engage in official transactions.
This legal status is crucial for export operations, as international buyers and partners typically require proof of legitimacy and proper registration before entering into business agreements.
Added benefits include that a registered business can access government grants, tax benefits, and other support programs designed to promote exports in Nigeria.
Obtain Exporter’s License
After completing the business registration, you need to register with the Nigerian Export Promotion Council (NEPC), the government agency responsible for promoting and regulating exports from Nigeria.
Registration with the NEPC is mandatory for all businesses intending to export goods or services.
This can only be done using the e-registration platform. Obtaining an exporters certificate involves some costs excluding remita / bank charges
- New certificate registration – N13,500
- Expired certificate renewal – N7,500
- Late certificate renewal (after Three months of expiry) – N12,500
Once registered, the NEPC will issue an exporter’s certificate, which legally authorizes you to engage in export activities.
This certificate is not only a legal requirement but also provides access to several benefits, such as participation in NEPC trade fairs, workshops, and export incentive programs.
NEPC issued certificates are valid for an initial two years (24 months ), after which it becomes renewable every year.
Here is a valid resource link that highlights all necessary document to streamline your exportation business in Nigeria
Choose Your Export Product
Identify products that have strong demand in international markets by conducting thorough research on global trends, demands, and trade statistics. In Nigeria, common export products include:
Agricultural produce: Items such as cocoa, cashew nuts, sesame seeds, ginger, and shea butter are in high demand globally due to their quality and abundance in the country.
Solid minerals: Nigeria is rich in natural resources, making limestone, lead, zinc, tantalite, and tin popular export items.
Manufactured goods: Nigerian companies are increasingly exporting textiles, footwear, and processed food products, taking advantage of international demand for African-made goods.
These sections of product are in high demand in the international market and exporting them would make you a good profit.
Here’s a list of popular products you can export from Nigeria:
- Cocoa Beans
- Sesame Seeds
- Cashew Nuts
- Ginger
- Palm Oil
- Crayfish and Fish
- Textiles
- Melon Seeds
- Snails
- Natural Cocoa Butter
These products have strong demand in international markets and present various export opportunities
Conduct Market Research
Research potential international markets to determine where your product has the best chances of success. Start by identifying countries with strong demand for your product through trade reports, industry publications, and online tools like the International Trade Centre’s Trade Map.
Analyze each market’s import trends, consumer preferences, and economic conditions to assess their potential for growth.
In addition, different countries have varying import tariffs, standards, and certifications required for foreign goods. You should be aware that these rules will help you avoid delays, penalties, or rejection of your products at customs.
Also, research the level of competition in each market. Identify your competitors, analyze their pricing strategies, and determine what unique value your product can offer.
Ensure Product Quality Compliance
Make sure your products meet international quality standards to avoid delays, rejections, or financial losses when exporting. Each country has specific import regulations, so it’s crucial to understand and comply with the requirements of your target markets.
Start by identifying the certifications and quality standards that apply to your product. For example, if you’re exporting food items, you may need certifications like HACCP (Hazard Analysis and Critical Control Points) or ISO 22000 to meet global food safety standards.
Consult relevant authorities and industry experts to learn about the necessary regulatory bodies for certification. For instance, agricultural exports may require approval from the Nigerian Agricultural Quarantine Service (NAQS) or international bodies such as FDA (for the U.S.) or CE marking (for the EU).
Investing in these certifications not only ensures compliance but also boosts your credibility with international buyers, who will view your products as reliable and high-quality.
Source Suppliers or Produce Goods
Find reliable suppliers to ensure a consistent flow of exportable products. To get a supplier, start by searching through platforms like Alibaba, Global Sources, and TradeKey, where you can connect with a wide range of suppliers from around the world.
You can as well meet reputable suppliers face-to-face by attending trade fairs and exhibitions.
When evaluating suppliers, consider the quality of their products. Request samples to gauge whether their offerings meet the standards required for your target markets. Do not forget to check if they have the necessary certifications and compliance with international quality standards.
Another key factor to consider is the supplier’s production capacity and reliability. Start an effective discussion about their lead times and ability to meet your order quantities consistently.
Also, your supplier reputation is one thing you can not live with. Don’t forget to research the supplier’s reputation from various sources.
It is easier to learn about a supplier’s success rate if you’re dealing online but, however difficult to actually know the success rate of a supplier you meet at an event – unless referred by a trusted source of yours.
Look for reviews or testimonials from other businesses and consider reaching out to their previous clients for feedback. This due diligence will help you identify suppliers who are trustworthy and capable of supporting your exportation business effectively.
Arrange Logistics
Setting up the necessary logistics for transporting your goods is crucial for the success of your exportation business. Start by selecting reliable shipping or freight companies that specialize in international shipping.
Look for companies with a strong track record, good customer service, and competitive rates.
Once you’ve chosen a freight partner, communicate your shipping needs clearly, including the type of goods, packaging requirements, and delivery timelines.
In addition to choosing a shipping partner, you’ll need to handle customs documentation to ensure your goods clear customs without delays. This includes preparing important documents such as the Bill of Lading, Commercial Invoice, Packing List, and any required export permits or certificates.
Consider working with a customs broker/worker who can help you navigate the complexities of international trade and customs clearance. They can assist in submitting the required documentation, paying duties, and ensuring that your goods are classified correctly to avoid penalties.
How to choose the right product to export
To choose the right products to export from Nigeria start by assessing market demand both locally and internationally. Conduct thorough market research to identify which products have a strong demand in your target markets.
This can be easily achieved by looking into trade reports, market trends, and consumer preferences to get insights into what products are currently sought after.
Next, consider the availability and cost of production. Ensure that the products you choose can be gotten reliably and economically.
In addition to choosing the right product to export, think about your unique value proposition. This means, identify what makes your product stand out in the market. This could be related to quality, uniqueness, or sustainability.
Also, consider regulatory requirements for both the exporting and importing countries. Ensure that you are familiar with any certifications or standards that your product must meet. Products that comply with international quality standards are more likely to gain acceptance in foreign markets.
How to find buyers and negotiate contracts
To find buyers and negotiate contracts in the export business, start by utilizing online marketplaces like GlobalBuyers, Alibaba and TradeIndia, where you can list or find readily buyers for your products and connect with a global audience.
The Global Buyer online is my go-to when it comes to getting w world wide international buyers. It allows you to search by geographical focus, activity, size and / or product you want to export.
However, you you want to be country specific, this list of buyer directories will support you in finding and contacting your potential leads around the world. You can as well get databases from different geographical areas around the globe.
Additionally, attending trade fairs, such as the Nigeria International Trade Fair, provides an excellent opportunity to showcase your products and network directly with potential buyers.
Building rapport during these face-to-face interactions can be crucial for successful negotiations.
Engaging with export councils like the Nigerian Export Promotion Council can further assist in identifying potential clients and understanding market trends.
These organizations often provide valuable resources and insights into the export landscape, helping you navigate the complexities of international trade.
By combining online strategies with personal networking and leveraging the expertise of trade councils, you can effectively find buyers and establish strong business relationships that lead to successful export transactions.
How long does it take to get an export license in Nigeria?
In Nigeria, obtaining an export license typically takes between 24 to 72 hours once you have completed your application and submitted all necessary documents.
However, the specific timeline can vary based on the type of products you intend to export.
What are the requirements for exporting from Nigeria?
To export goods from Nigeria, several key requirements must be met:
NEPC Registration: You must register with the Nigerian Export Promotion Council (NEPC) to obtain an Export Registration Certificate. This registration is essential for facilitating your export activities.
Form NXP: Completing a Form NXP is mandatory. This document provides details about the goods you intend to export, including quantities and values, and certifies that the goods meet required standards.
Proforma Invoice: A proforma invoice outlines the details of the goods and serves as a preliminary bill of sale. It should detail the pricing and terms of sale.
Quality Certifications: Depending on the product, you may need specific quality certificates issued by relevant government agencies, such as the Standards Organization of Nigeria (SON) or NAFDAC.
Shipping Documents: You’ll also need necessary shipping documents, such as the Bill of Lading, to facilitate transportation and customs clearance.
Export Contract: If applicable, having a sales contract or agreement with the buyer is crucial for outlining the terms of the transaction.
Customs Documentation: Prepare for customs requirements, which may include various forms and certificates to prove the origin and compliance of your goods.
Summing It Up
Starting an exportation business is no rocket science. However, it requires keen attention to details in order to scale and not err policies which might in turn hurt your business.
In a nutshell, conduct market research and ensure you follow product quality compliance.
Join organizations for global market trend where buyers are seeking for people to to import goods to other countries. With this, you can build a successful exportation business in Nigeria.
After reading this guidelines, you should take this quiz organized by NEPC to test your export readiness status.
