How To Export Agro-Allied Products

In this edition of Shippers’ Guide you are enlightened on the intricacies of what and how to export agricultural products from Nigeria and the benefits of engaging in the trade and some of the challenges that hinders the exportation of agro products from Nigeria. Read and enjoy.

In terms of employment, agriculture is by far the most important sector of Nigeria’s economy, engaging about 70% of the labor force. Agricultural holdings are generally small and scattered; farming is often of the subsistence variety, characterized by simple tools and shifting cultivation. These small farms produce about 80% of the total food. About 30.7 million hectares (76 million acres), or 33% of Nigeria’s land area, are under cultivation. Nigeria’s diverse climate, from the tropical areas of the coast to the arid zone of the north, make it possible to produce virtually all agricultural products that can be grown in the tropical and semi tropical areas of the world.

The economic benefits of large-scale agriculture are recognized, and the government favors the formation of cooperative societies and settlements to encourage industrial agriculture. Large-scale agriculture, however, is not common. Despite an abundant water supply, a favorable climate, and wide areas of arable land, productivity is restricted owing to low soil fertility in many areas and inefficient methods of cultivation. Agriculture contributed 32% to GDP in 2001.

The agricultural products of Nigeria can be divided into two main groups: food crops, produced for home consumption, and export products. Prior to the civil war, the country was self-sufficient in food, but imports of food increased substantially after 1973. Bread, made primarily from US wheat, replaced domestic crops as the cheapest staple food for much of the urban population. The most important food crops are yams and manioc (cassava) in the south and sorghum (Guinea corn) and millet in the north. In 1999, production of yams was 25.1 million tons (67% of world production); manioc, 33.1 million tons (highest in the world and 20% of global production); cocoyam (taro), 3.3 million tons; and sweet potatoes, 1,560,000 tons. Many fruits and vegetables are also grown by Nigerian farmers.

Although cocoa is the leading non-oil foreign exchange earner, growth in the sector has been slow since the abolition of the Nigerian Cocoa Board. The dominance of smallholders in the cocoa sector and the lack of farm labor due to urbanization hold back production. Nigeria has the potential to produce over 300,000 tons of cocoa beans per year. Rubber is the second-largest non-oil foreign exchange earner. Despite favorable prices, production has fallen due to, aging trees, and lack of proper equipment.

Factors behind the poor agricultural export performance have been blamed on three main factors viz.: decline in world commodity price that have been persistent, poor management of public resources and inappropriate incentives and more fundamentally structural factors.  The land mass can also be classified into three vegetation: swamps/rain forest, savanna and semi-arid savanna. This suggests that about 73-75 per cent of Nigeria’s land mass is amenable to farming and can support a wide range of trees and staple food crops, livestock and forestry production. Also blessed with a long marine coastline and numerous rivers and lakes, it can boast of fishing and aquaculture. The potential therefore exists to resuscitate traditional export crops such as cocoa, rubber, palm produce and coffee through replanting of aged plantation and in some cases cleaning up abandoned ones.

There is also potential to corner exports of staple crops such as cassava and yam that Nigeria is renowned as a major producer while the savanna zones support a wide range of traditional grains such as sorghum, maize, beans and oil seeds. Indeed, our land resources are one that can guaranty that the nation is self-sufficient in the production of a wide variety of food crops and livestock. The greatest supply side challenge would therefore be to strive to raise productivity through technological change (use of intensive chemicals, fertilizers, integration of livestock into farming systems, better irrigation methods, hand-tools and storage methods and improved animal and crop husbandry.

The large domestic market provided by agro-allied industries especially the food and beverage industries offer opportunity to add value to traditional non-export grains such as sorghum and cassava mainly to target ECOWAS market. This would represent a major dividend of the current regional integration effort. Opportunities also exist to substitute traditional grains for imported ones by industries such as sorghum and maize for malted barley in the brewery industry, cassava and other grains in the flour and feed industry instead of wheat and a host of others.

There are immense opportunities for resuscitating and inducing agro-allied exports. There is also great potential for piggery and other livestock production targeted mainly at export markets. One area of comparative advantage that has been relatively unexploited is cultivation of fresh fruits, vegetables and horticulture for export. Almost all flora and fauna can grow in Nigeria with very little effort. There are three entry points in export business, you can come in as: a Manufacturing Exporter, an Export Merchant and Export Agent.

How you come in depend largely on different factors e.g. capital, availability of product, product sourcing skills etc. Let’s take a closer look at the different entry points below;

 Export Agent: This is the man who has a good understanding of how export business is done, knows how to get foreign buyers and local suppliers/sellers. He makes his money from the commission he gets from linking buyer and seller together in export. As an export agent, he needs more of common sense than capital in order to make it in export business.

 Export Merchant: An exporter who buys goods or products from manufacturers and producers within the country for export to different parts of the world. He is concerned with product sourcing that agrees with the specification his buyer demands. He makes good profit and has the capacity to increase his volume of transaction for juicier reward.

 Manufacturing Exporter: A company which apart from manufacturing certain products is also exporting the product. This company might sell the same product for local consumption but also sells the same in other countries too for profit. Examples of such companies are Unilever, 7UP Bottling Company, PZ etc.

There’s a place for everyone who desires to do export in this country, you can start small and grow big with time, start as an export merchant and if you want to take it a step further you can grow to become a manufacturing exporter.

Exportables from Nigeria To different parts of the world includes but is not limited to: Sesame Seed, Dried Hibiscus (Zobo), Hardwood, Charcoal, Raw Cashew Nuts, PKS, Crude Palm oil, Gum Arabic, Cassava, Shea Butter, Coconut, Solid Minerals like Lead Ore, Zinc Ore, Mica and lots more…