I was supposed to have written about how to start export business in Nigeria before now. But my bitter experience made me to be reluctant about it. My bitter experience was not on the business but on the person I did it with.
Therefore, you’re about reading on how to start profitable export business from an experienced exporter. You’ll learn from my mistakes and avoid every pot hole in the processes of doing export business in Nigeria.
The step by step guide on how to start export business is applicable to small scale export business in Nigeria. Charcoal export business in Nigeria. Food export business in Nigeria. Agricultural export business in Nigeria and any type of export you intend doing.
In this article I’ll explain in details the following:
- What is export business
- Why you should go into export business today
- Challenges of export business in Nigeria
- Basic requirements to start export business in Nigeria
- How to get export contract
- Ways to source for finance
- How to get paid
- Where to get most reliable partner
- How to make over 1000% return on investment
What is Export Business?
Export business is the act of moving goods and service from one county to another for exchange of payment. This means that for you to be an exporter or involve in export business in Nigeria, you must source for goods and services here in Nigeria and transport it to other part of the world in an exchange for payment.
Why You Should go Into Export Business in Nigeria Today
There are various reasons why one should go into export business in Nigeria today. But I will provide 2 major reasons in this article.
Firstly, it is one of the most lucrative businesses in Nigeria today. In fact, it has been and will always remain a very lucrative business because you’ll earn in hard or foreign currencies. Whether you’re considering starting small scale export business in Nigeria or large scale, you’ll always earn in foreign currency.
With the present economic condition in Nigeria today, exchange rate is at its peak. Therefore, if you earn in foreign currency then you did become very rich.
Secondly, the government policies are favorable. In fact, export sector is one area that enjoys maximum support from government. Presently, every exporter or those in export business in Nigeria enjoys 13 export incentive schemes.
I’ll list few incentive schemes exporters or intending exporter will enjoy for doing export business in Nigeria. They are:
Export Expansion Grant
Before now, government pays exporter some percentage of their total annual export cost. The percentage is directly proportional to the volume of export you do in a year. Assuming you export goods worth of N1, 000,000 in a year, government will give you about N150, 000 at the end of the year as thank you for being an exporter. That percentage given to exporters is referred as export expansion grant.
But today, it is no longer money, instead government will give you support by providing you with a non-cash grant. This could be in form of machines, logistics and many more.
Duty Drawback Scheme
Those into export business in Nigeria enjoys duty drawback. This means that you can import any goods from another country with the proceeds you make from export without paying custom duty.
In other words, if you export cashew to Vietnam and buy any goods or raw material with the money you made from Vietnam, then you’ll never pay custom duty here in Nigeria to clear your goods.
Tax Relief on Interest Income
In case exporter loaned money from bank to finance his/her small scale export business in Nigeria, the interest on the money is not taxable. So, you’ll enjoy free tax on interest on borrowed money as an exporter.
Click Here for more incentive schemes those into food export business in Nigeria, small scale export business in Nigeria, charcoal export business in Nigeria and exporters in general enjoys.
What are the Challenges of Export Business In Nigeria
The first challenge exporters or intending exporters face in Nigeria is the “Trust” problem. Fraudulent activities of few Nigerians have earned us bad name internationally. Therefore, it’s usually difficult to secure export contract.
Foreigners find it difficult doing business with us because they are afraid of being duped. But that does not mean you can’t secure genuine export contract. You’ll learn how to secure genuine export contract as you read on.
The second challenge exporters or intending exporters face in Nigeria is lack of adequate mentoring. Nigeria export promotion council is mandated with the responsibility of mentoring exporters. But, reverse is the case, they lack the power to do that. I once complained and the claimed that government is not funding them well to carry out their duties.
So, if you’re considering going into export business in Nigeria then search for a successful exporter to mentor you. Or contact me for one on one coaching.
Basic Requirements to Start Export Business in Nigeria
There are 4 basic requirements you need to start a profitable export business in Nigeria. They are:
- Understanding export trade
- Planning for export trade
- Market research for export trade
- Export Logistics
Understanding Export Trade
To start and run a successful export business in Nigeria you must have in-depth knowledge of how it works. You must learn the terms, where to source for exportable products, how to get contract and many more.
There are two ways you can get a better understanding of export business. Firstly, is by undergoing mentoring under a practicing exporter. Secondly is by reading from detail guides on how to export from Nigeria.
To get a comprehensive guide on export business in Nigeria, visit any of Nigeria export promotion council’s zonal offices. There you’ll find books and journals containing details on how to get into export business like a professional.
Planning For Export Business in Nigeria
The first thing you must do as part of planning is to register a limited liability company. After which you secure export license from Export promotion council. Then decide on the product to export.
There are more than 100 agricultural export products in Nigeria that you can choose from. I strongly advise you to concentrate on one product and master everything about it before jumping to another.
Market research entails finding out countries that buys more of the product you intend exporting. It also involves knowing the specifications and quality they buying countries need. For instance, those in charcoal export business in Nigeria mostly ship to Europe because they buy more.
Also, those in cashew export mostly ship to Vietnam and India because the buy more quantities than any other country.
In addition, market research also means knowing where to source the product locally. Which means you must search and identify where the product is produced in regular, large and exportable quantity and quality.
From my experience, most agricultural export products in Nigeria are found in the northern part of Nigeria. Except cashew and other mineral resources that are only found in the western and eastern part of Nigeria.
The logistic aspect of export business in Nigeria starts from sourcing for products, conveying it either from factory or farm to export terminals. Inspection of the product by authorized body such as FIIRO, Nigerian custom and NDLEA.
Finally, you document every step with government agencies because that alone will ensure you really exported. And government will grant you all the benefit due to you as an exporter.
If for any reason you do not document your export process with government agencies, then it termed smuggling. And you’ll be punished if caught along the line.
Export Business in Nigeria – How to Get Export Contract
The good thing about export business is that all you need is just one reliable buyer and you’re made. Yes, if you can source for just one serious buyer then you’ll keep exporting until you get tired.
Before now, sourcing for export contact here in Nigeria was a very difficult task but today with the internet it is easy. With that in mind, there two major ways to source for genuine contract here in Nigeria.
- To source for a genuine contract, I suggest you join NACCIMA. NACCIMA stands for Nigeria Association of Chambers of commerce, Industry, Mines and Agriculture. Some years back, the registration fee was N50, 000. As at time of writing it might have changed.
Buyers all over the world approach NACCIMA for a supplier because they know NACCIMA is a well reputable export body in Nigeria. So, if you identify yourself with NACCIMA then you stand big chance of securing a genuine export contract in Nigeria.
2. The second most reliable way to source genuine export contract is by signing up with B2B websites. B2B websites are platform where buyers and sellers from around the world meet.
There are many of them out there but I strongly suggest you register with alibaba.com and globalbuyersonline.com. They have paid and free version registration. If you’re serious then go for paid registration
Alibaba.com is very expensive more especially if you’re into small scale export business in Nigeria. So, go with globalbuyersonline.com because their fee is affordable and their contracts are superb.
3. Another way to source for export contract is to tell your friends or family members residing in Europe, Asia and other part of the world to visit companies over there and tell them what you can supply from Nigeria.
Export Business in Nigeria -How to Source for Capital
Export financing has never been easy in Nigeria. NEXIM bank (Nigeria export and import) was created to finance export businesses in Nigeria. But it has never delivered in its mandate. Sorry to say, corruption has made it impossible to source fund from NEXIM bank.
That is not to say that there are no other means of sourcing for capital. The first way to source for capital is to look for investors. Most big men around you have the money and searching for where to invest it.
Therefore, if you’ve good understanding of export business in Nigeria, with good business plan, then investors are ready to invest.
Another place to get finance is going for loan. If you’ve good understanding of export business in Nigeria then you can go for loan to start. There are private loan givers that you can get money from as long as you meet their requirements.
Click Here to read on where to get loan for business today
How to Get Paid
There are various ways of getting paid as an exporter in Nigeria. Basically you get paid through your banks as long as you documented your business. The first way to get paid is known as cash –in- Advance. This means the buyer will send you money first before you ship.
The reality is that if you’re a beginner you’ll hardly enjoy cash in advance. It’s only possible for those with long trading history
The second way is through letter of credit (LC). This is one of the most reliable ways you can get paid as an exporter. In this case, the buyer’s banker will tell your bank that the buyer has the said amount of money in his account to pay you as soon as you deliver his products.
In some cases, the buyer will mandate his bank to release some percentage of the money to your bank once you scan your bill of laden to him. Bill of laden is the document shipping company will give you, showing that your product has left the shores of Nigerian waters or air ways. In fact, this is the best form of payment in export business in Nigeria.
Click Here to Read more payment options for exporters in Nigeria
Where to Get Most Reliable Partner
For reading to this point, you really show your seriousness in export business in Nigeria. I was among the pioneer of charcoal export business in Nigeria but doing business with the wrong partner crumbled me.
Therefore, I don’t want you to experience the same thing I experienced. The best partner you can have as an exporter or intending exporter is NEXPOTRADE
NEXPOTRADE is a partnership between some government agencies and some banks to promote export among ECOWAS countries. They help exporters or intending exporters to secure contract and even export for them while getting commission for it.
Partnering or registering with nexpotrade will ensure you enjoy export business in Nigeria to the fullest.
Export Business in Nigeria – How to Make Over 1000% Return on Investment
Whether you are considering going into small scale export business in Nigeria or large scale export business in Nigeria there is a singular thing you must do to maximize profit. That is by adding value to whatever you’re exporting.
For instance, those who export cashew nut can’t make money like those you export cashew nut oil. Therefore, learn how to process and add value to your products. This is basically applicable to agricultural export products in Nigeria.
If you’re a beginner, you can start exporting unprocessed products, but have in mind of expanding into exporting processed product later.
Export Business in Nigeria – Wrap Up
Obviously, export business in Nigeria is a business worth doing. It’s a business you’ll never lose as long as you’ve the right information. The government policies are favorable to exporters because government is seeking for a way to diversify Nigeria economy from oil.
It’s somehow capital intensive but the return on investment is usually above 50% per export you do.
If you enjoy this article please leave a comment below and share with friends and families.
I am open for one on one consultation on export business and ready to help you build a fortune in export business.