International Trade

How to export products from Nigeria to other countries around the world. We are basically tapping into opportunities in the non-oil products in Nigeria like Cashew nuts, ginger, and sesame seed among others

import and export business international trade

Requirements for Commercial Export in Nigeria

Generally, the process of commercial export in Nigeria isn’t as easy as they seem online. There are several challenges from the packaging to the point of export. But the most important thing is for an exporter to play their card in a smart way and prepare ahead for the challenges that may come. read more

How To Get Phytosanitary Certificate in Nigeria at NAQS

How To Get Phytosanitary Certificate in Nigeria at NAQS

If you’re into the export business in Nigeria, most especially if you deal in agricultural commodities, you must be familiar with the Nigeria Agricultural Quarantine Service (NAQS), an agency under the Federal Ministry of Agriculture and Rural Development, which also issues Phytosanitary Certificate. read more

where_to_invest_in_africa_2021_best_investment_destination

Top 10 Best African Countries For Investment According To Rand Merchant Bank

Nigeria’s major competitive advantage in terms of investment is its population while other parameters are not favourable to a country that prides itself as Africa’s biggest economy.

Over the years, its big economy which largely depends on oil revenue has failed to translate to an improved standard of living of its millions of people who are impoverished by the government’s harsh economic policies.

When it comes to indicators of where to do business in Africa, Nigeria is either lost on the top 10 or at a ridiculous top 20 positions.

In the latest top 10 best investment destinations in Africa released by Rand Merchant Bank (RMB), Nigeria is nowhere to be found. This aligns with factors foreign investors must consider before investing in Nigeria The 166-page research titled, “Where to Invest Africa 2021” was conducted by the South African advisory and corporate investment bank.

The ranking

In the research, Egypt is the number one best investment destination, followed by Morocco while South Africa occupies the third position.

Rwanda which has thrown the horrible experience of genocide behind continued to rank better in top investment destinations on the continent, it occupies the fourth position while Botswana is in the fifth position.

Top 10 best countries to invest in Africa
Ranking Country Score
1 Egypt 5.94
2 Morocco 5.65
3 South Africa 5.63
4 Rwanda 5.62
5 Botswana 5.60
6 Ghana 5.54
7 Mauritius 5.44
8 Cote d’Ivoire 5.40
9 Kenya 5.33
10 Tanzania 5.25
Top 20
11 Algeria 5.24
12 Ethiopia 5.21
13 Senegal 5.20
14 Nigeria 5.13
15 Seychelles 5.00
16 Benin republic 4.97
17 Tunisia 4.93
18 Madagascar 4.90
19 Namibia 4.88
20 Cape Verde 4.87

COVID-19 Exposed Many Economies

While 2020 was seen as a pandemic year that crippled economic activities across the world, it also showed how resilient a government is in terms of crisis management.

Rand Merchant Bank (RMD) says:
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Requirement of Form M and Form Q For Your Importation Business infomediang

14 Requirements To Obtain Form M and Form Q For Your Importation Business

Importation business is a striving sector in Nigeria, no wonder merchants make millions of naira from it every month. Here, we’re talking about wholesale importation of goods that requires the purchase of thousands of US dollars from the forex window.

Note: If you’re just kickstarting an importation business, you must learn how to cross the hurdle of sourcing forex after CBN’s decision to stop the sales of dollars to BDC operators in the country.

To make application easier and faster, the apex bank announced application can be done on Nigeria Single Window portal Trade Monitoring System (TRMS), you can find the application process at: https://infomediang.com/trade-monitoring-system-for-forex/

One of the housemates of the 2021 Big Brother Naija season 6 and an entrepreneur, Hazel Oyeze Onou a.k.a Whitemoney, on his first day in the house revealed that he makes his money from the importation of shoes and sneakers.

So, if you’re planning to dive into the sale of foreign goods and products in Nigeria, you have to do a background check on the requirements that would make your ride a smooth one

Two of the important forms you need as an importer in Nigeria are:

  1.  Form M
  2. Form Q

Importance of Form M To Importation Business read more

states-in-nigeria-that-share-land-borders-with-foreign-countries

15 States in Nigeria That Share Land Borders With Foreign Countries And The Cross-Border Trade Significance

With a landmass of 923,768 km², Nigeria shares land boundaries with four African countries in the South and in the Northern region. All the land borders are African in Cameroon, the Republic of Benin, the Chad Republic, and the Republic of Niger.

The largest African country in terms of population also shares maritime borders with three African countries as Ghana, São Tomé, and Príncipe, and Equatorial Guinea.

Which African country shares the largest land area with Nigeria?

Of all the 11 African countries that share land boundaries with Nigeria, the Niger Republic and the Republic of Benin share the biggest landmass with Nigeria.

Niger Republic borders can be found in seven states in Nigeria, they are:

  1. Borno,
  2. Jigawa,
  3. Katsina,
  4. Kebbi,
  5. Sokoto,
  6. Yobe, and
  7. Zamfara states

While the Benin Republic also shares part of its territory with seven states in Nigeria:

  1. Kebbi
  2. Kwara
  3. Lagos
  4. Niger state
  5. Ogun
  6. Oyo
  7. Sokoto

Nigerian States That Share Boundaries With Other Countries and the economic importance

States in Nigeria Foreign Borders Economic Significance
Adamawa Cameroon It promotes cross-border businesses between Adamawa petty traders and Cameroonian buyers and vice versa
Benue Cameroon
Borno Republic Chad

Republic of Niger

Cameroon

If the government could restore peace, farmers in Borno would have been the most beneficiaries considering the fact that it shares the highest land borders with foreign countries. The neighbouring countries would have also benefited
Cross River Cameroon There has always been cross-border trade between Cross River and Cameroon. Though most of the traders are done through smuggling.
Jigawa Niger Republic Jigawa traders and their counterparts in Niger Republic are partners in cross border business
Katsina Niger Republic It fosters foreign trade with traders in Niger
Kebbi Niger Republic,

Benin Republic

Kebbi rice farmers have a good number of shops in Niger and Benin Republics where their goods are sold.
Kwara Republic of Benin One of its LGAs, Baruten, shares a long border with the Republic of Benin. Chikanda is the border town.
Lagos Republic of Benin It fosters cross-border trade between merchants in Lagos with buyers in Benin Republic and vice versa
Niger state Republic of Benin To the west
Ogun Republic of Benin It has been fostering a century-long trade between Ogun and Benin Republic.
Oyo Republic of Benin
Sokoto Niger Republic and Benin republic Cross-border trade is fostered
Yobe Niger Republic As above
Zamfafra Niger Republic As above

Adamawa

Occupying 36,917 square kilometres is Adamawa state. Its boundaries Cameroon is a well-established one after the International Court ruling a few decades ago when some parts were ceded to Nigeria and they went with the present-day Adamawa.

It’s on record that Nigeria’s former Vice President and a former Presidential candidate Alhaji Atiku Abubakar was parts of the villages that were ceded to Nigeria.

The state is also blessed with several mountains and large river valleys.

Borno

Borno used to be the largest state in Nigeria in terms of land area before successive military governments divided it for easy administration.

Today, the state is the second largest in terms of land area after Niger state. It houses the now notorious Sambisa forest, a location unofficially known as the operation terrorist base.

Having said that, Borno borders the Republic of Niger to the north, the Republic of Chad to the northeast, and Cameroon to the east which should be business opportunities for the Borno people, but terrorism would not let them enjoy the benefits.

Cross River

Through Ikom, there is a village that links Nigeria with Cameroon either through by trekking or through motorbike.

Today, Nigeria’s government seems to have realised the importance of cross-border trade between Nigerian buyers and sellers and their counterparts in the Republic of Cameroon, when they officially commission a long road linking the two countries.

The construction of the 1.5km began on April 28, 2017, and was completed in March 2021 which linked the Mfum/Bermenda roads link Nigeria in Etung LGA of Cross River State to Bermenda in Southern Cameroon, which gulped $35.9
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import and export business international trade

4 Steps to Obtain Import and Export Loan At Stanbic IBTC Bank

For Nigerians who engage in international trade: importation and exportation business, access to finance could be challenging, but this has specifically been solved by Stanbic IBTC bank.

Called import and export finance, the financial support is aimed at solving some of the financial constraints Nigerian importers and exporters face in their trade.

6 Benefits of Stanbic IBTC Import and Export Financing:

1) It’s designed to support import and export trades and transactions.

2) It is a secured mode of payment in international trade.

3) You will access to 13 currencies

4) The bank ensures that both parties fulfill the agreement of trade, as such there is no issue of non-payment and non-delivery.

5) It is secured since the bank is globally recognised as a legitimate bank that carries out operations in Nigeria and some African countries among others.

6) Above all, it provides a fantastic financing structure for importers and exporters.

This financing is subdivided into two categories:

  1. Import (Outward Letter of Credit)
  2. Export (Inward Letter of Credit)

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how to start export business in Nigeria

15 Ways To Be A Successful Non-oil Exporter In International Market

The movement of products across the border isn’t the same as inter-state trade. The seller can personally deliver an order from Ibadan to Lagos where his customers are based, it isn’t like that in international trade. Because of this, an exporter has to understand the export market before diving in.

Risk is inevitable in any business, yet you need a thorough assessment of the market to minimise your loss, maximise profit, and reduce damage among others.

What is Export Market?

The export market is the process of selling products whether raw materials or finished goods to foreign buyers.

You can’t wake up in the middle of the night and start exporting pork to Saudi Arabia. You need to ask yourself: Does Saudi’s law, cultural and religious behaviour allow the importation of pork? You need to plan and strategise to operate a successful exportation business.

You must know the following to become a successful non-oil exporter in the international market:

Quality Of The Product

You might have tried your best to make sure that the product to be exported is of quality. But your effort might be below the prescribed quality of product of the receiving country.

For instance, if you’re exporting to countries like the United States, the United Kingdom, you need to have enough information about the agencies that monitor the quality of products that come into their country. What are the requirements?
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exporting_ginger_from_nigeria_to_trusted_foreign_buyers

30 Key Roles of Nigerian Export Promotion Council (NEPC) in Connecting Exporters With Foreign Buyers of Non-Oil Products

The military regime of Gen Olusegun Obasanjo in 1976 approved the establishment of the Nigerian Export Promotion Council (NEPC) through Decree No. 26 of 1976 which has now become an Act.

Obasanjo’s regime at the time said Nigeria needed to build a viable economy that can be sustained through agricultural products aside from crude oil, which is today Nigeria’s major source of income.

The vision of the government was to adequately promote Nigeria’s non-oil products like sesame seeds export and Ginger among others to the rest of the world.

However, the formal implementation of the NEPC was done in March 1977. Since then the law creating the agency has undergone several revise and reviews.

For instance, before Obasanjo handed over power to Alhaji Shehu Shagari (the first democratically elected executive president on October 1, 1979) Decree No. 72 of 1979 was effected to make some adjustments in the law establishing the council.

As if that wasn’t enough, the regime of Gen. Ibrahim Badamosi Babangida (Nigeria’s first military president) in 1988 came up with Decree No. 41 of 1988 and complemented it by the Export (Incentives and Miscellaneous Provisions) Decree No. 18 of 1986 to make further adjustment in the law guiding the operations of NEPC.

The last of such adjustment to enhance the performance of NEPC in promoting Nigeria’s non-oil products was carried out by IBB in 1992 by Decree No. 64 and 65 of 1992

What is NEPC?

NEPC means the Nigerian Export Promotion Council which is saddled with the responsibility of promoting non-oil products in Nigeria to the rest of the world by designing and implementing progammes that would connect exporters of agricultural or non-oil products from Nigeria to foreign buyers globally.

Simply put, NEPC is an agency of the Federal Government of Nigeria with the aim of building a formidable economy that could sustain itself apart from revenue from oil.

  • Outgoing CEO: Mr. Segun Awolowo
  • Incoming Executive Director and CEO: Ezra Yakusak

Offices

NEPC has its headquarters located in Abuja, Nigeria’s Federal Capital Territory (FCT), and has six regional offices spread across Nigeria, they are

  • Lagos,
  • Port Harcourt,
  • Kano,
  • Enugu,
  • Jos,
  • Yola

Objective Nigerian Export Promotion Council

The discovery of crude oil in 1956 at Oloibiri, Eastern region, the present-day Bayelsa State, (South-South geopolitical zone) Nigeria, had made the country turn its attention away from agricultural products (like cocoa, groundnut, oil palms which constituted Nigeria’s revenue).

The government thought it was time for the country to also have other sources of revenue and NEPC was born to help promote non-oil products in Nigeria in order to make Nigeria diversify its economy

Functions of NEPC

Below are the functions and mission of the Nigerian Export Promotion Council in Nigeria in relation to international trade:

1) Promotion of Nigeria’s non-oil products

2) Development of strategies exports

3) Diversification of Nigeria’s exports from oil to agricultural produce

4) Collaborating with international trade agencies

5) Cooperating with foreign bodies in simplifying the exports process

6) Exchange export ideas with Nigeria’s export partners on the promotion of products from both countries

7) To keep Nigerian exporters abreast of international standards and regulations in order to assist them in preparing their products

8) Assist in assessing prospective exporters if they are ready for export through its readiness checker

9) Issuing =&8=&

Ezra Yakusak Replaces Segun Awolowo as NEPC CEO

Ezra Yakusak Replaces Segun Awolowo as NEPC CEO

Dr Ezra Yakusak will replace Mr Segun Awolowo as the Chief Executive Officer (CEO) of the Nigerian Export Promotion Council (NEPC).

Segun Awolowo, whis the grandson of the late sage Chief Obafemi Awolowo, was first appointed by the administration of former President Goodluck Jonathan in November 2013.

And he was reappointed for a second term as the CEO of NEPC in February 2018 by President Muhammadu Buhari.

The presidential spokesman Garba Shehu who made the announcement on behalf of Buhari disclosed that Yakusak’s appointment takes effect from November 27.

Dr Yakusak holds a Ph.D. in commercial law from Ahmadu Bello University. He was the Director, Policy, and Strategy and served as the Secretary to the NEPC Governing Board.

Garba said, “The appointment is for an initial term of four years in accordance with the provision of Section 7 (1) of the NEPC (Establishment) Act, 1987”.

NEPC is Nigeria’s agency that promotes agricultural and non-oil products to the rest of the World.

exporting_ginger_from_nigeria_to_trusted_foreign_buyers

30 Major Exporters of Agricultural Products in Nigeria To Foreign Markets

Since the Federal government through the Nigeria Export Promotion Council (NEPC) announced its determination to scale up revenue from non-oil exports, the number of exporters in Nigeria has dramatically increased.

Most of them can be found in the international Business to Business (B2B) marketplace.

Nigeria’s major non-oil exports that could yield billions of US Dollars yearly in revenue include:

  • sesame seeds,
  • palm oil,
  • ginger,
  • cashew,
  • cowpeas,
  • cocoa,
  • soya beans,
  • rubber,
  • petrochemical,
  • leather,
  • Cotton
  • Shea butter,
  • tomato,
  • banana and plantain,
  • groundnuts.

Even as applications for export licence in Nigeria can now be obtained in less than 72 business working hours, thousands of Nigerians who are willing to export agricultural products are finding it difficult to find foreign buyers for their products.

In this post, we’ve compiled major Nigerian exporters you can work with to assist you with

exporting your product to foreign markets read more

foreign_buyer_platforms_for_export_products

25 Best Marketplace To Find Foreign Buyers For Export Products

In 2020, Nigeria spent around $56.61 billion USD on imports while in the same year under review, products exported from Nigeria to international markets were around $34.54 billion USD. In economics and trade, that’s a trade imbalance or trade deficit of around $22.07USD, the data obtained from the National Bureau of Statistics (NBS) put the Naira value at N7.37trn.

The aforementioned trade imbalance, if not curbed, will put pressure on Nigeria’s foreign exchange market, it may also sink local production and could make indigenous manufacturers to struggle for survival just like we’ve seen in the textile industry a few years ago.

How can Nigerian exporters fill this gap?

First, the imbalance means that export traders in Nigerians have not fully explored the agriculture sectors which has the potential of outperforming crude oil.

Photo credit: unsplash.com

It’s either suppliers in Nigeria find it difficult to get buyers or their inability to meet the standard requirements and the necessary documentation.

So, in this post, we’ll share with you 20 genuine platforms where you can find international buyers for your agriculture products..plus other traditional means of meeting buyers.
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Nigerian sesame seeds export for international buyers

Top 11 Nigerian Non-Oil Products You Can Start Exporting To Countries That Buy Them Most

There are more than 20 Nigerian non-oil products foreign buyers are searching for in the international market, you can tap from this goldmine if only you can find the right channel and know which products sell most in your target market.

The point is: Nigeria’s economic dependence on crude oil export is an indication that hundreds of business opportunities are untapped and the only way to rake in millions of naira in revenue from exporting business in Nigeria is:

1) to know the process involved,

2) the required documentation,

3) agricultural products with the highest demand from other countries around the world.

Why Nigeria’s Exporting Business Is a Goldmine

Between 2016 to 2018, Nigeria’s agriculture exports were below 2%.
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worst east of doing business africa infomediaNG business solutions

2020 World Bank Ranking of Worst African Countries To Do Business

Somalia, Eritrea, Libya, South Sudan, and Central African Republic are the top five worst African countries to do business. And those who have been following political development in these countries may not be surprised considering the fact that crisis is peculiar to at least four of them.

In the World Bank Group’s Doing Business Report, WBG based its ranking on property registration, how easy it is to get credit, tax policy, foreign direct investment policy and its implementation, and electricity among other indicators that aid the running and management of business.

Popularly known as Ease of Doing Business, 190 economies around the World were accessed based on the implementation of business regulations, while New Zealand was the best country do set up business in the global ranking, Somalia occupied the bottom of the list in the World.

Unlike Mauritius which is No. 1 and top 20 countries to setup business in Africa (which is available at: https://infomediang.com/best-african-countries-to-do-business), Somalia remains the worst environment for business activities on the African continent, a spot it has occupied for three years.

In the West Africa sub-region for instance, Ghana attracts more foreign investors than Nigeria in recent times because of worsening security plus undemocratic tendencies of the most populated countries on the continent.

In the case of Nigeria some of the businesses which closed shops and those that setup new office in Ghana instead of Nigeria cited several reasons that were mostly outside World Bank indexes.

Worst Ease of Doing Business In Africa 2021 read more

ease of doing business Africa

2020 World Bank Ranking of Best African Countries To Do Business

With 1,380,614,641 people, making it the second most populated continent, Africa remains an investment destination for foreign investors who want to tap into the market strength of the continent.

While the collective headcounts of Africa is significant, each of the countries has several measures in place in order to encourage Foreign Direct Investment (FDI).

Interestingly, investors do not really rely on the promises made by the government, they dig deeper to know if there are indicators to make business activities easier called Ease of Doing Business Index, a research of the World Bank Group.

Significance:

Government may make promises, but implementation is paramount and it also shows the seriousness of government to protecting interest of foreign investors.

That’s why Ease of Doing Business report in Africa has been a valued tool for investors seeking to invest in the continent. It is meant to assist the overall business climate.

In the 2020 report, top two most populated countries – Nigeria and Ethiopia – weren’t on the top 20 friendliest countries to invest.

Countries like Mauritius with a population less than a local government in Lagos State, threw Nigeria in 21st spot to rank as number one Africa country that makes it easier to set up business.

Incredibly, foreign investors rarely look away when planning to invest in Africa because of its population, Nigeria’s and Ethiopia’s market strength is huge.

But it isn’t by market strength, researchers put into consideration indicators like security, tax policy, power supply, the attitude of government officials, clearance at port and terminals among others to measure how easy it is to do business on the African continent

Below is a list of top 20 countries with best Ease of Doing Business in Africa

  1. Mauritius
  2. Rwanda
  3. Morocco
  4. Kenya
  5. Tunisia
  6. South Africa
  7. Zambia
  8. Botswana
  9. Togo
  10. Seychelles
  11. Namibia
  12. Malawi
  13. Ivory Coast
  14. Djibouti
  15. Egypt
  16. Uganda
  17. Ghana
  18. Swaziland
  19. Lesotho
  20. Senegal

The performance of the top 20 countries may be surprising to those who have not been following international trade and investment.

Mauritius

As small as Mauritius is, it is the “biggest” fish in the ocean in terms of creating a suitable environment for investments and businesses.

Ranked number 13 among 190 economies in the ease of doing business, that spot earns the Indian Ocean island nation number spot on the continent.

It ranked 20 in the 2018 report, meaning investment-friendly policies are being implemented in the country surrounded by beaches, lagoons and reefs.

It’s tax regime and very low crime rate put the country ahead of over 50 other African countries. And it continues to attract tourists and investors around the World.

Rwanda

Ranked 38 among 190 economies in the ease of doing business, Rwanda is one of the two African countries that made the Global Top 2 Countries in Doing Business Report for 2020.

Those who have been following closely innovations and investment in country that has thrown the horror of genocide behind itself, know that it isn’t really surprising that Rwanda, a country of 13,353,740 according to worldometers.info, has brilliant investment policies in place so that investors get value from their money.

One of the things that Rwanda does better than his neighbours is the fact that it exempts newly formed small and medium-size enterprises from paying the trading license tax for their first two years of operation Plus it also makes it easier to register their business.

Morocco

The North African country bordering the Atlantic Ocean and Mediterranean Sea has taken a step ahead in using technology to develop its agriculture sector known as Artificial Intelligence.

Ranked number 3 in Africa and 53 in the global ranking, Morocco takes the business interest of foreign investors seriously.

Kenya

With a literacy rate of 81.54% , Kenya didn’t only generate $5.792 billion from exports in 2017, but also maintains key indicators of ease of doing business

Now wonder companies like NIC securities Limited, Apex Africa Capital Ltd and Dyer and Blair among others are doing well in the East African country.

  • Rank in Africa: 4
  • Global ranking: 56
  • read more

    Ease of Doing Business Why Investors Are Choosing Ghana Over Nigeria

    6 Reasons Foreign Investors Choose Ghana Over Nigeria

    A favourable business environment is one of the key factors that drive foreign investors to a country. Government policies, security, infrastructural development are some of the things investor put into consideration, and some African countries are more serious and committed to ease the way business is done in their country.

    For instance, in the 2020 Ease of Doing Business index, Nigeria, which prides itself as the giant of Africa is 21st and 121 globally on the list while Egypt and Ghana occupy 15 and 17 on the continent respectively.

    While Egypt occupies the 114 in the global ranking, Ghana takes the 118 spot, thereby throwing Nigeria behind them.

    What Does This Mean

    It isn’t easy for Nigerians to do business here because of frustration from government officials and bad plus inconsistent policies.

    That’s why foreign investors are most times mandated to pay heavily to bribe government officials to set up their businesses.

    The government needs to do more as pointed out in one of our analysis on the factors foreign investor needs to consider before investing in Nigeria.

    With an astronomically growing population of more than 200 million, Nigerian leadership needs to learn from Mauritius how it became the most suitable country to establish business in Nigeria.

    Mauritius doesn’t only has the facilities that accommodate investment and businesses, it also has a friendly tax regime that support small medium enterprises.

    Why Ghana and Egypt Are Better Than Nigeria In Terms of Investment

    For countries like Egypt and Ghana that have conducive business environment than the most populated African country, one may be wondering what they are doing better than Nigeria.

    Some of them are:

    • Infrastructure
    • Security
    • Policies on doing business
    • Democratic Principles
    • Power Supply
    • Accountability

    Other reasons why Nigeria may continue to lose investment to Ghana include:

    • High running cost
    • Scarcity of aviation fuel for the aviation industry
    • Poor navigational and landing aids

    Infrastructure

    A country that suffers an acute infrastructural decay will find it difficult to attract foreign investment.

    This is one of the reasons why many industries closed shops in Nigeria to relocate to either South Africa or Ghana.

    The Government of Ghana is hugely investing in its infrastructure and it’s showing more commitment in this regard than Nigeria.

    Most of federal roads in Nigeria aren’t motorable. They have become kidnapping point for criminals.

    When they build roads, such go into disrepair with a few years. A former Deputy Governor of Central Bank of Nigeria (CBN) Tunde Lemo said something related to the ease of doing business in Nigeria in a recent interview on Channels Television’s ‘Business Morning’ programme monitored by InfemediaNG Business Solutions.

    “Our infrastructure is in decay, it is very seriously impacted negatively,” former Managing Director of Weman Bank said.

    How Nigeria Can Get More Funds To Develop Its Infrastructure

    In a bid for the government of President Muhammadu Buhari to invest in infrastructure, he has plundered the economy into debt instead of managing the available resources.

    Nigeria’s debt is estimated at around $900bn, that’s about twice the size of our GDP

    Lemo suggested: “So, we need to free up resources beyond what government can do, and then harvest all of these and put aggressively into revamping our infrastructure.”
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    20 Signals Foreigners Must Watch Before Investing In Ethiopia

    20 Signals Foreigners Must Watch Out Before Investing In Ethiopia

    Summary: Located in the Horn of Africa, Ethiopia is the second largest market in Africa and has enough resources to drive Foreign Direct Investment (FDI). The country’s huge investment in infrastructural development in the last 10 years is showing positive result while its rich soil is favourable to agriculture produce. As juicy as the country’s resources are, Ethiopia is still faced with some challenges.

    locust invade a farmland in ethiopia
    Locusts invade a farmland in Ethiopia. Photo credit: bermudareal.com

    If you’re planning to invest in Ethiopia as a foreign company or an individual, the market and the resources are enough for you to explore, however, we’ve also highlighted some of the negative signals you need to watch out before taking your investment to East African country as the government continues to open the state-dominated economy.

    • Consumer market: Second largest in Africa
    • Population: 115 million (world bank 2020 data)
    • Legal protection of FDI: Yes
    • Sub-region: East Africa
    • GDP: $110.00 Billion by 2021 ending
    • GDP 2021 Projection: $115Billion by 2023
    • FDI: USD 3.9 billion (July 28, 2021 according to Ethiopian Investment Commission or EIC)
    • Neighbour: Kenya, Eritrea, Somalia, Sudan, Djibouti, and South Sudan

    Why Should I Invest In Ethiopia?

    There are some reasons you must consider before investing heavily in a specific sector or country when it comes to international trade. In this guide we divided such investment factors into: 1) Positive signals, 2) Negative signals

    Positive Investment Signals

    • Rapidly developing infrastructure
    • Inconsistencies in tax policy
    • Air freight boom
    • Fair Birr Exchange Rate Against USD
    • Conducive macroeconomic environment
    • Favourable climate for agriculture produce
    • Multi-language society
    • Fair FDI law
    • Market accessibility
    • Improved corruption index ranking
    • Regional headquarters for international organisation

    Negative Investment Signals

    • Bureaucracy
    • Difficulty in repatriating profits
    • Locust invasion
    • Unstable peace in Tigray region
    • Targeting companies suspected to be working with opposition
    • Selective licence
    • Complex multi-language society

    Rapidly Developing Infrastructure

    Ethiopia is one of the fastest growing economies in the world, it isn’t doing badly compared so some of its counterparts on the continent. Its massive investment in infrastructure has been one of the investment boosting factors.

    No foreign investor would want to put their money in a country where there is massive deficit in infrastructural development. Exports is doing well, though there are still some challenges that the country leadership needs to address.

    The country is gradually implementing the recommendations in its Growth and Transformation Plan which captures numerous areas the country needs to pay attention to and how infrastructural development will help drive investment through the areas the Ethiopia has comparative advantage.

    Some of the key areas that has received attention and continue to get government attention include:

    • Road projects
    • Railway projects
    • 6GW-generated power plant
    • Dire Dawa
    • Adama industrial zones among others.

    Air Freight Boom

    One of the booming sectors in Ethiopia is its airline. For manufacturers of perishable goods who want effective air cargo, Ethiopia is the best in Africa. It has dominated and won several laurels locally and international in airline management.

    The first thing that comes to mind when the name of the country is mentioned is Ethiopian Airlines. It flies to more destinations in Africa than any carrier.

    Its new cargo terminal is capable of delivering about 600,000 tons a year. Ethiopian Airlines handle two thirds of Africa’s air freight.
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    usdollar_to_naira_exchange_rate_parallel_market

    Would Closing Domiciliary Accounts Increase Value of Naira At Forex Market? Here Are The 5 Ways Nigerian Economy Will Be Affected If Such Suggestion Is Implemented

    Summary: A Federal lawmaker is proposing a bill to force the CBN to close all domiciliary accounts in Nigeria as one of the measures to make the Naira regain its value. Can the implementation of such economic advice make $1 to N1? We examine some of the implications of stopping Nigerians from operating dom accounts

    Every Nigerian knows that something is wrong with their economy. The price of garri has gone up, inflation has hit prices of the consumables. If you ask a market woman, she is likely to tell you that dollar is the cause.

    There is economic meaning in what they say, the effect may not be direct, though, the fact is Nigeria is an importation economy, the effect of which forces a change in the price of goods that are locally made.

    But a Federal Lawmaker representing Eti-Osa federal constituency of Lagos State at the National Assembly says he’s warming up to sponsor a bill that will compel the apex bank convert currencies in domiciliary account into naira.

    Honourable Ibrahim Obanikoro also said it wouldn’t be out of place to compel the CBN to cancel the operation of domiciliary accounts by Nigerians.

    His advise came as the naira recorded its greatest low in history as it exchanges for N580 against $1 on Wednesday, September 29, 2021, while the official rate remained at N411/$1 at the official rate, in one of our black market rate reports

    He had said,:
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    history of state creations in nigeria from 1967 till date

    20 Factors Foreign Investors Must Consider Before Investing In Nigeria

    Any investor in the United States, Germany, and Italy among other advanced economies who wishes to their business to Africa, will most likely put Nigeria on their list despite many challenges confronting the country.
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    Nigerian sesame seeds export for international buyers

    20 Reasons Why Exporting Nigerian Sesame Seeds To Foreign Buyers Is Profitable

    One of the major non-oil exports that contributed largely to Nigeria’s GDP in the last 10 years is sesame seeds. Its cultivation is popular among Northern farmers in Jigawa, Benue, and more than 20 other growing states.

    Quick Facts:

    • Local name: Beni-seeds
    • Botanical Name: Sesamum Indicum
    • 2012 output: 994,800 tonnes yearly
    • 2020 output:  500,000 tonnes per annum
    • Output projection:  1.5 million tonnes per year
    • Current revenue: $700 million annually
    • HS Code: 120740
    • Competitor: Ethiopia and Sudan
    • Top 3 largest markets destination: Japan, Turkey, and China
    • Income potential for farmers: N104,000 for every N50,000 invested

    Uses:

    Its uses can be divided into three:

    1. Economic
    2. Nutritional
    3. Medicinal

    Economic potential

    Nigerian sesame seeds is currently turning in N287,000,000,000 annually ($700,000,000X N410).

    Research showed that the amount could be doubled if a more enabling environment is created for the farmers, for instance, fixing the issue of insecurity in the Northern part where cultivation is huge.

    Yet, there still an estimated $170 million USD of untapped markets, according to a data obtained from the Nigerian Export Promotion Council (NEPC).
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    There are enough reasons why you should go into its farming. One of them is the high demand from foreign buyers who prefer Nigerian sesame seeds because of its richness.
    Apart from that, it’s the major source of income for many farmers in Jigawa, Benue, and other growing states.

    Nutritional value:

    • Used in making biscuits,
    • It is used in making bread
    • Oil extraction from beni-seeds is used for cooking
    • The young leaves can be used to prepare stews and eaten
    • Sesame food is rich in protein
    • Its meal is rich in methionine and tryptophan.
    • It contains amino acids that may be missing in a number of other sources of vegetable protein.
    • Shafts can be used for animal feed
    • It is used in poultry feed productions
    • Dried stems may be burnt as fuel with the ash and used for local soap making, but this is hardly used because it may affect seed production.
    • It is also used in manufacturing margarine
    • Used in making fish meal

    Medicinal use:

    • Oil extract is used for treating ulcers
    • Used in pharmaceutical products
    • It is one of the major ingredients of aerosols
    • It is applied on burns among local farmers
    • It is also used for other confectionery like soap, lubricants, and illuminants.

    Other local products that can be obtained from the beni seeds include:

    • Kantun Ridi
    • Kunun Ridi
    • Oil used in making Kulikul
    • Leaves can be used in making local soup called Miyar Taushe

    Harvesting

    Harvesting starts in late December and continues through July.

    Season:

    There is only one season and it’s uniform among the producing states.

    Types:

    There are three types that are grown in Nigeria, they are:

    1. White sesame seeds
    2. Hulled sesame seeds
    3. Black sesame seeds

    The white seeds could be described as food-grade. It is mostly used in the bakery sector.

    The other two are suitable for oil production and it’s common in Kano, Jigawa, and some parts of Katsina.

    Growing States in Nigeria

    Beni-seeds cultivation began in the middle belt region of Nigeria, but today there are more than 20 states where it’s grown, they are:

    • Jigawa,
    • Benue,
    • Kogi,
    • Adamawa,
    • Bauchi,
    • Gombe,
    • Kaduna,
    • Kano,
    • Katsina,
    • Kebbi,
    • Nassarawa,
    • Niger,
    • Plateau,
    • Sokoto,
    • Taraba,
    • Abuja
    • Yobe
    • Borno,

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    International Trade and business

    7 Requirements To Register a Clearing and Forwarding Company In Nigeria

    Clearing and forwarding companies can’t be neglected in the supply chain of goods across the border. As such exporters and importers can’t do without them.

    They play a critical role in the shipping industry. In Nigeria for instance, a clearing and forwarding company or agent must be registered by the Nigeria Ports Authority (NPA).

    In some countries, a clearing agent may be different from a forwarding agent, depending on the regulatory laws. In Nigeria, for instance, a company could register as a clearing and forwarding firm.

    Difference Between Clearing And Forwarding Agent

    The clearing agent ensures that documents are arranged and transferred to the customs, calculates customs duty and other charges, and ensures that unnecessary delays are removed in order to avoid demurrage charges.

    A forwarding agent on the other comes in where other responsibilities may not allow a clearing agent to handle the delivery.

    In most cases they are also called freight forwarders, he acts on behalf of the importer to organise transport and ensuring that items get delivered to their destination according to specification.

    As you play any of the above roles, you must keep up with the trends regarding the list of banned items that can’t be imported in your country of business operation.

    What is demurrage?

    Demurrage charges are the fees paid by an importer when items overstay at the terminal.

    It’s important to work with a clearing agent with a tracking record who can push shipments through customs before demurrage begins to apply.

    You may want to ask…

    Who Is a Clearing And Forwarding Agent?

    Also called C&F, clearing and forwarding agent is an expert who is registered by the Nigerian Port Authority (NPA) and the Council for Freight Forwarding in Nigeria (CRFFN) to handle all customs formalities by coordinating with the carrier and taking care of all shipping and delivery related activities at the port.

    They are needed in the international delivery of goods because the roles they play allows the exporter to concentrate on their core business activities

    How To Register a Clearing And Forwarding Company

    There are certain questions you need to satisfactorily answer before taking the nbold step of registering your freight company:

    Which point of entry of goods and products do you want to concentrate on? Three points of entry are:

    • Airport
    • Land border post
    • Sea and Port

    How do I build trust to get customers?

    What are the available marketing platforms for me to get the message out?

    Before that, below is the registration requirements for a clearing and forwarding firm in Nigeria:

    1. You must write a letter of application to the General Manager of Eastern or Western Ports
    2. Attach evidence of company registration with the Corporate Affairs Commission (CAC)
    3. Memorandum and Article of Association
    4. Bank Reference
    5. Evidence of 3-year Tax Clearance Certificate
    6. CRFFN registration number
    7. Payment of N200, 000 registration fee via remita payable to NPA revenue account.

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