For Nigerian businesses seeking to enter global markets, numerous obstacles stand in the way. Limited data access, weak supply chains, poor product standards, and financing difficulties continue to stall the nation’s non-oil export drive.
Breaking Into International Markets
Urena Iheme, CEO of Fefereti Group, shared her struggles with expanding her business internationally. During a trade fair in Houston, she secured repeat orders for her ‘chin chin’ but found scaling production and maintaining a stable supply chain to be a major challenge.
She emphasized that Africa remains her primary target market, but logistical hurdles make regional expansion difficult.
“Our biggest consumers are Africans, yet Africa is the hardest market to penetrate. Moving goods remains a huge challenge,” she noted.
Beyond logistics, Nigerian exports face rejections abroad due to quality and processing issues. She cited palm oil as an example, where Europe rejects Nigerian exports but accepts Ghanaian products due to differences in quality control.
Iheme believes an export processing center could help local businesses meet global standards and improve acceptance in international markets.
The Data Deficit
Patrick Ulayi, managing director of Alliance & Frontier Limited, stressed that lack of reliable data is one of the biggest setbacks for Nigerian exporters.
“With accurate data, businesses can make informed decisions, secure financing, and scale operations,” he said.
Investors and lenders require concrete trade figures to assess risks before providing funding. Without structured records of transaction volumes, trade history, or market trends, exporters struggle to secure financing, limiting their ability to grow.
Beyond data issues, protectionist policies in foreign markets also pose challenges. Ulayi noted that certain products face strict restrictions in the EU, making entry into these markets difficult. However, he believes there are opportunities in regional trade if Nigeria shifts from raw material exports to value-added products.
Foreign Exchange (FX) Struggles
Nigeria’s foreign exchange crisis remains a pressing issue for exporters. Emmanuel Nwalor, team lead for export and agriculture at Fidelity Bank, explained that FX shortages stem from trade imbalances and import abuses.
“The more exporters we have, the higher our FX inflows. This would ease pressure on the naira,” he said.
The Central Bank of Nigeria (CBN) has introduced several reforms to boost FX supply, including:
Clearing FX backlogs
Revising International Money Transfer Operator (IMTO) guidelines
Liberalizing FX market regulations
However, top analysts, including PwC, warn that FX uncertainty may persist in 2024 unless supply challenges are addressed.
Nwalor also pointed out that many businesses fail due to a lack of understanding of export financing. Unlike importers who pay upfront, exporters depend on international buyers, which can lead to delayed or unpaid transactions.
“If businesses don’t structure their transactions properly, they risk shipping goods and never getting paid,” he said.
While Nigerian banks offer export financing, many businesses struggle to meet requirements due to a lack of clear business models.
“If a bank can track your supply chain from start to finish, they’ll fund you. But if your operations lack structure, the risk is too high,” Nwalor explained.
The Logistics Challenge
Professor Frank Ojadi, an operations management expert at Lagos Business School, described logistics as a major failure point in Nigeria’s export system.
“The biggest issue is moving products—finding them, transporting them, and getting them out of the country efficiently,” he said.
High transportation costs, poor infrastructure, and bureaucratic delays create bottlenecks at Nigerian ports, making non-oil exports less competitive.
Ojadi compared the situation to Nigeria’s early 1900s groundnut exports, where inadequate rail transport led to stockpiles forming groundnut pyramids instead of timely shipments to Europe.
“If logistics issues are not resolved, Nigeria’s export challenges will persist despite economic growth,” he warned.
Why Non-Oil Exports Matter
Despite Nigeria’s efforts to diversify its economy, crude oil remains the dominant export, generating ₦13.78 trillion in Q4 2024, according to the National Bureau of Statistics (NBS). Oil accounts for nearly 69% of total exports, while non-oil exports—including agricultural products like cocoa, soybeans, and cashews—still make up less than 10% of total trade.
Nwalor emphasized that Nigeria’s forex struggles are a direct result of excessive imports.
“We import far more than we export. The more businesses we can support in exporting, the more dollar inflows we’ll have, reducing pressure on the naira,” he said.
For Nigeria to achieve real economic growth, it must resolve supply chain inefficiencies, improve data access, and enhance export financing to make non-oil exports more competitive on the global stage.
