Exportation business in Nigeria is going to be even more lucrative in 2017 than in the previous year and this is because the Nigerian federal government’s budget of 2017 is designed to position exportation of commodities and encouraging local production of made in Nigerian products as an economic strategy to overturn the current recession.
Exporters in Nigeria stand to benefit from it because the government has earmarked billions of naira to provide medium term (5 years or more) loans to promote exportation of agricultural commodities and agro allied products as a step towards boosting the local agricultural sector, reduce poverty and create employment opportunities. Nigerian exporters stand a good chance to make millions of naira from exporting tons of products and there are many more benefits. Let’s over them one by one;
Reasons to invest in Exportation Business in Nigeria
#1 Earn Foreign Exchange
At this time when the naira is very weak, people should be running to exportation business it guarantees that you will be paid in dollars - as it is the standard mode of payment in international trade. Your customers in Europe, Asia or North America have to pay you dollars and at the current official exchange rate of N315 to a dollar that could translate into millions of naira per container load of exportable products.
#2 High Profit Margin
The net profit margin for exportation is usually over 20% which is far higher than what many other business opportunities will offer locally including local retail which averages 7-9%. The international demand for agricultural produce plus falling value naira contributes to high profit margins
#3 Access to technical support and Partnership
You can gain tremendous amount of skills, business knowledge, exclusive market information and even referrals from credible overseas technical and business partners once you become an established exporter. There are organisations and agencies that can hook you up with various companies and individuals who will share knowledge that will help move your business to the next level.
#4 Access to overseas trading opportunities
There are various chambers of commerce which enable exporters to network and connect with trading partners in overseas target market. Imagine if you can have orders for more than 100 tons of whatever you want to export because you have an existing trading relationship with an overseas company.
#5 Improved efficiency and output
The standard of your business process would naturally improve due to quality assurance and training you would be mandated to meet by your overseas partners/customers and even the Nigerian Exports Promotion council
#6 Access to Government waivers and incentives
The federal government of Nigeria since 1986 has offered various incentives and waivers to exporters especially those engaged in exportation of manufactured products. Although the policies may change but waivers and export incentives are here to stay
#7 International Business Exposure
Local exporters can participate in international trade fairs, exhibitions and expos where they can attract potential partners, customers and even investors to fund their business. Once you join an exports association you’ll be let in on some of these opportunities
#8 Protection from local recession effects
The effects of recession is taking a toll on local businesses but not so for exporters who are smiling to the bank no wonder the government last year raised an alarm over possibility of food shortage because s of excessive exports of grains from Nigeria – the lure of dollars seems to overcome recession effects of local businesses
#9 Access to very cheap Exportable products
Most of the exportable cash crops we have such as cashew nuts, ginger, hibiscus, cocoa, maize to name a few are extremely cheap when purchased locally. But for the bad state of roads and high haulage costs the profit margin for exporters would have been very high
#10 Enjoy Government Support
The Nigerian government is interested in promoting exports and has put in place various policies which discourage importation of certain goods which we can produce locally. For instance rice which is largely consumed is beginning to attract foreign investments and some states such as Anambra are embarking on rice exportation this cannot be said of importation.
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