How To Start Exportation Business In Nigeria

There are lots of raw materials and agricultural products in Nigeria (many of which do not hold much value for those of us here in the country) that cannot be found anywhere else/are rarely found in other countries.

These products however are highly sought after in a lot of these other countries, mostly overseas, and these countries would pay high amounts of money to bring these goods into their countries.

This has made exportation in Nigeria one of the most lucrative and productive businesses; the rate at which profit is raked in by those who venture into it has been recorded to be at an all-time high over the years.

The number of Africans and Nigerians in diaspora, and that are still travelling contribute to a large number of the demand population in these countries.

The number of seriously underused products in the country is a lot, so this means the numbers would only keep rising, and the exportation business would keep booming as more years go by.

This is the best time to begin your exportation business in Nigeria.

But how do you go about this, you may be wondering?

In this article, I will be showing you exactly how you can begin your process and start your own exportation business in Nigeria.

port showing container of goods for exportation
port showing container of goods for exportation

How To Start Exportation Business In Nigeria

Exportation in Nigeria involves requires adequate knowledge and research and capital; not knowing much, or anything at all about how exportation works in Nigeria could cost you a whole lot.

Beginning an exportation business involves several processes:

  • Registering your exportation business.
  • Registering and familiarizing yourself with the NEPC.
  • Sourcing for clients.
  • Finding suitable goods to export.
  • Getting adequate capital.
  • Choosing what aspect of exportation you want to focus on.
  • Getting the required certificates and documentation.
  • Working with exportation logistics companies and packaging your goods.

Register For An Exportation Course/Class

group of nigerians meeting for Exportation Class
group of nigerians meeting for Exportation Class

Before you jump into starting your exportation business, you should ask yourself, “do I know anything about exportation in Nigeria?”

You should ensure that every angle of research into exportation in Nigeria is covered.

Getting yourself a well-experienced mentor, someone who is already in the exportation business and has been for quite a while, with a huge amount of recorded success to tutor you is one way to familiarise yourself with the exportation business properly, besides the research you may have done personally.

If this would be too much for you, merely getting video-recorded tutorials on exportation in Nigeria, or joining seminars on exportation businesses in Nigeria would be better options.

Register Your Exportation Business

Once you have garnered enough knowledge on what is involved in the exporting business sector in Nigeria the next step would be to register your exportation business.

As is expected with businesses in Nigeria your exportation business would require a CAC certificate to show that it is a legal entity and a legitimate business in Nigeria.

You will need to choose a business name; remember to be creative in doing this, because a lot of companies in the country have similar names.

Pick a unique and precise name that would stand you out and quickly be identified to you.

Get an office location, or at least an office address, which would be the official address of your exportation business.

You will be given a business form to fill out, and necessary documents like tax and insurance certificates will be requested, so these should be made available too.

Register With Nigerian Export Promotion Council

Nigerian Man registering document for Exportation business
Nigerian Man registering document for Exportation business

After you have registered your exportation business, you will need to register with the Nigerian Export Promotion Council (NECP).

This registration is done online, where you’d need to fill out a form, input your exportation business name and attach your exportation business certificates and licenses.

Registering with the NECP is mandatory with the Nigerian Customs; not registering would result in not being recognised as a legitimate exportation business, and you would be banned from functioning as an exportation business.

The NECP has some benefits available to you after registering with them as an exportation business, one of which includes seminars on exportation and how to properly handle your exportation business.

Get Capital

Contrary to what people may think, you do not need lots of money or large capital to begin your exportation business.

With as low as N50,000, you can successfully start and establish your exportation business in Nigeria especially if you are focusing on a particular product to export.

Still, you would need capital to start your exportation business, and I would recommend you check for low-cost, legitimate finance sources that wouldn’t cause huge losses eventually in your profitmaking.

Options For Capital Sourcing In Nigeria

The Nigerian Export-Import Bank is a bank that was set up solely for funding importation and exportation business through direct lending and loaning, and export credit facilities, among other financial benefits.

Another finance source is the Central Bank of Nigeria; with financial benefits such as the Export Stimulation Fund and the Rediscounting Refinancing Facility, they have proved to be a very reliable and conveniently low-cost source of capital for starting up an exportation business in Nigeria.

You could also decide to get investors in your exportation business or get loans from any commercial bank of your choice, but this comes at higher costs than using the finance sourcing options recommended above.

Source For Goods To Export From Nigeria

Lady sourcing for products to be exported out of nigeria
Lady sourcing for products to be exported out of nigeria

As we have noted, there are lots of underused products and agricultural goods in Nigeria that are sought after by a lot of foreign countries because of their unavailability in said countries.

Nigerian Goods You Can Export

Some raw materials and products that are in demand in foreign countries include:

  • Breadfruit (ukwa)
  • Cassava/cassava flour
  • Cashew nuts/cashew oil
  • Cocoa/cocoa butter
  • Hides and skins (leather)
  • Iron ore
  • Palm oil
  • Rubber
  • Yams
  • Garri
  • Brooms
  • Bitter cola, among others.

You can decide to export any one or more of these goods, depending on your means and your financial ability.

Crude oil is a major export product in Nigeria, although it is only available to the government and is not a product for the private sector of exportation; however, you can get contracts with the government to stand in as a representative during exportation sales transactions with other countries.

Carry out A Product/Market Survey

When choosing the Nigerian product(s) you want to start exporting, you should carry out a market survey; check what is trending in the market, and what is in high demand with little supply available, and get acquainted with this knowledge.

Make enquiries and check out the competition; find out who else is selling that product you want to export, their sale prices and their target countries, so you would know what decisions to make on fixing your prices and what country regions to focus on.

Most importantly, you should find out what goods and products are on the contraband list of both Nigeria and your target country; you would not want to be labelled a smuggler or an illegal goods dealer only because you were not aware of what is legal and what isn’t.

Source For Suppliers

Subsequently, you would need to get a source to supply the goods you have decided to export, in whatever amounts you would need.

For agricultural products, it is advisable to find a farm to consistently supply the products and raw materials you would be exporting, then draw up a contract with them, depending on the time frame you want to work with them.

You could draw up a short-term contract, just to ‘test’ them, and if you’re okay with the supply service, you can then make the contract more long-term.

Other raw materials can be supplied directly from their manufacturers, using the same short-term/long-term method if you would like, or you could get your supply from wholesalers of the material for export.

Identify Target Market (Potential Foreign Clients)

Your target market as an exporter comprises foreign countries like the United States, Canada, and England, among others.

Identifying these countries and noting the products that are a priority to their consumer population is important in your exportation business.

Now, it doesn’t just end at finding these countries and getting acquainted with their consumption needs; how do you get in touch with these countries to start supplying them with your exported goods from Nigeria?

Sourcing For Clients/Building Your Exportation Brand

This, in my opinion, is the easiest part of your exportation business startup.

There are so many options you can use in finding client countries and reaching out to them for exportation business purposes; you could:

  • Register on international business platforms and marketplaces like AliExpress.
  • Register with exportation promotion councils of other countries, as many as you aspire to work with.
  • Find local buyers, i.e Nigerian buyers, with foreign contacts and connections.
  • Contact your target country’s Chamber of Commerce.
  • Utilise social media platforms like LinkedIn to advertise your exportation brand.
  • Participate in trade fairs in Nigeria, to help familiarise yourself with foreign companies and local suppliers.
  • Join B2B(Business to Business) and B2C(Business to Consumer) forums and portals.
  • Hire overseas agents on a commission basis to scout for potential customers and client countries(this would cost you extra, but it is worth it).
  • Encourage already existing customers to tell others about your exportation business.

In building your exportation brand, you would need to create an international SEO-ready website; a website that would be easy to find on any search engine if any potential clients search for Nigerian exporters to do business with.

Aspects of Exportation In Nigeria

The exportation business in Nigeria has different aspects you can decide to focus on; you could be a direct exporter of goods, manage the exportation transactions of a company, or even become an export broker.

Direct Goods Export

Just as the name implies, this aspect of exportation is direct and is the general type of exportation business in Nigeria.

It involves you getting raw materials and/or agricultural products and services and exporting them to your client countries, with direct contact between you and your clients throughout.

You either manufacture your products yourself or connect with local suppliers and then source for international clients to export to.

This aspect of exportation in Nigeria is quite capital intensive, as you would have to either buy out products from the manufacturers or produce your goods yourself.

Export Management

As an export manager, you act as a consultant for exportation companies and organisations in Nigeria that have goods for export but do not know how to go about the whole exportation process.

What you have to do is contact the client countries and communicate with the buyers, till the transactions are closed, all the while standing in as a representative for the exportation organisation.

For example, you could act as the export manager for a group of cattle rearers and hunters that have leather and skins to export to countries like the United Kingdom, communicating with the buyers in these countries, negotiating prices and agreeing on payment methods and generally being the official export representative of these leather sellers.

You get paid either on a commission basis, or a regular salary basis if you are working for a more official organisation.

Export Brokerage

An export broker’s job is to act as a middleman between two parties without partaking in the actual transactions and final deal-closing.

With export brokerage, you have a wider network of suppliers and a wider range of goods to export; you do not have to focus on one particular product and can work with a lot of organisations because your job is to successfully connect Nigerian organisations with foreign customers, agree on sale prices and close exportation deals.

You make your profit by adding your commission to the price given by the supplying organisation.

If for instance, a local cocoa-producing company sets their cocoa prices at $1,200 per crate, you could sell it off to the client country at $1,300, adding your $100-per-crate commission to the final price to be paid by the foreign country.

This aspect is the safest and most lucrative aspect of the exportation business to go into in Nigeria, because you do not have to be directly involved in the transportation of the goods, and the number of goods you are brokering is not limited to a specific amount.

Export brokerage is not as capital intensive as direct goods exportation; you barely have to spend anything on acquiring clients.

Export Logistics In Nigeria

The final process of your exportation business startup in Nigeria is getting export logistics sorted; packaging systems, insurance, transportation and documentation.

Packaging/Branding

Recommended materials for packaging exported goods from Nigeria are nylon wraps, foil paper, envelopes and cartons.

Package your goods properly, neatly and securely, to avoid damage and/or misplacement in transit; wrap the products in the foil paper, put in the nylons and then load them into the cartons before securing the cartons with marked duct tape.

Do not forget to ensure every single item for export for damages, to reduce your losses in case of any mishaps or mistakes.

Documentation

You are required to document the entire process of packaging, loading and shipping out with the necessary agencies put up by the Nigerian government; if any step is missed or omitted, you would be termed a smuggler, your goods labelled as contraband and seized immediately.

Certificates And Documents To Acquire During Export Process In Nigeria

Before getting to the final point of shipping out and even on the reception of the exported goods at the recipient country, there are several documents, certificates and permits you will be required to present or hand in:

  • A proforma/commercial invoice, showing the list of goods for export, and their value in the transaction currency(e.g dollars), also known as a Packing List, and a commercial receipt.
  • Nigerian Export Proceed, which captures the value of the entire export transaction in detail.
  • Certificates for the products from the respective Nigerian agencies and departments; health certificates from NAFDAC, fumigation certificates from FPIS, phytosanitary certificates from NAQ, and if it is livestock/livestock feed, veterinary certificates from DVPCS.
  • A Certificate of Inspection.
  • Insurance certificates.
  • Bill of Lading; a document made by a shipping company containing the details of the exported goods and presented on request to customs, and at the destination country; you could call it the shipping company’s goods manifest.

Export Logistics Companies/Shipping Companies In Nigeria

Nigeria has several shipping companies which you could make use of at any time, and even get long-term partnerships with subsequently, with benefits.

The major ones are:

  • NIPOST.
  • FEDEX.
  • DHL.
  • UPS.

Payments and Payment Methods

You may be wondering, how do I get paid without getting cheated or scammed after delivering to these countries?

First off, you will need to have created a domiciliary account for your Nigerian exportation business, into which your payments would be made.

The surest and most used method of payment is the Letter of Credit, which is a document/contractual agreement signed and provided by your client country’s bank, stating that the payment for your goods and services would be made into your account once the goods are received and necessary documentation presented on arrival.

Another method is getting an advance payment, with the client sending in payment before the goods for export are shipped off; however, beginners in the Nigerian exportation business do not enjoy this method, as a certain level of trust and familiarity is needed for this payment method.

In A Nutshell

We have noted that the process of starting up an exportation business in Nigeria involves registering your exportation business with the necessary agencies and getting the required documents, surveying the export market and finding client countries, getting the goods for export and finding suppliers, proper packaging/insurance and working with shipping companies on export logistics.

If you’ve found this article on the exportation business in Nigeria helpful, don’t hesitate to share this with anyone who may need it.

Thanks.

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