This is a step-by-step guide on how to start your own profitable agricultural export business in Nigeria. I will show you why agricultural exportation is the new oil. I will also tell you what items to export, how to start your own exportation business, how to get the necessary license plus how to find buyers and source contracts.
Get your pen and paper; we will cover a lot of ground, or simply bookmark this page so you can always revisit for future reference. Also, if this article helps you, kindly share it with your friends on social media. Let’s get started…
Agricultural Export business – The New Oil
According to this report, Nigeria earned a total of $730m (N143bn) from its non-oil exports in the fourth quarter of 2015. On the 28th January 2016, the Executive Director/Chief Executive Officer of Nigerian Export Promotion Council (NEPC) Mr. Olusegun Awolowo stated that the NEPC has put in place some plans to increase the country’s non-oil export revenue to $18billion by 2019. A lot of money changes hands in non-oil export. How would you like to get your own fair share of $18billion? Keep reading.
Nigeria’s export industry remains largely underutilized because we are still waking up from our oil-induced slumber and the government is making every effort to promote economic diversification through non-oil exports. This is a golden opportunity for the smart entrepreneur to key in and prosper. Yes, export business is very profitable and the earning potentials will only increase in the coming years.
Here are some of the benefits of agricultural export business to the country’s economy and the individual:
- Economic diversification: No nation can grow effectively without export. Export is a trade between countries. It is one of the ways countries grow wealth and one of the cheapest means of FOREX.
- Exportation is very profitable: While importers lament bitterly due to the embarrassing forex quagmire, exporters are the ones who smile – no, laugh – to the bank. More people are realizing this and the business is booming.
- Creates employment: Export creates employment for not just the exporter, but for everyone in the chain. From the people who produce the exportable commodities, to the product sourcing agent, the haulage company, shipping line workers, the list is endless but you get the idea.
- Reduce post-harvest losses: to make this point clearer, the Food and Agriculture Organization (FAO) of the United Nations estimates that Cassava produced in Nigeria goes mainly to feed and food (on average 45.6 percent and 45.7 percent respectively, while the rest of it goes to waste. Exportation reduces this loss/waste through processing and exporting the products in the value chain to other countries.
List of agro-items you can export from Nigeria
One of the first questions to ask when starting your agricultural export business is: what should I export? The short answer is, it depends on your interest as the exporter, available startup capital, and availability of the items. To give you an idea, some of the agro-produce to export include, but not limited, to the following:
Cashew nuts Ginger, Cocoa (seeds and processed)
Fruits Kola/bitter kola Ginger
Garlic Groundnuts Cow bones/cow horns
Gum Arabic, Rubber Sesame seeds Shea nuts/Shea butter
Mangoes, sugarcane Vegetables/spices Plantain flour
Ground melon Ground maize beans
Shrimps Prawns, etc.
You can export any of these items in their raw state and make money. However, you can maximize profit by adding value before you export. For example, you can export Shea nuts and make money. But you make much more money if you add value by exporting processed Shea butter. The same goes for cocoa, palm fruits, cashew, and other agro-produce you can export.
What not to export
Here are some items on the export prohibition list:
Maize Antiquities Scrap metal
Artifacts Timber (in any form) Raw hides and skin
All unfinished leather Unprocessed Rubber Latex and Rubber Lumps
Animals classified as endangered species, e.g. monkeys, lizards, Elephants, Crocodiles, etc.
How to Export
Here is a step by step guide on how to start your own agricultural export business in Nigeria
1. Do your research and draw up an export business plan
No endeavor succeeds without adequate planning. A business plan is critical not only as a road map to your business success but as a basic requirement to secure an export loan from banks, financial institutions, and government bodies. Your business plan should include details like:
- What do you want to export?
- Where is it found?
- Who wants to buy it? How well do you know your market? Do you know who your buyer is and what they want?
- How much do you need to start?
- How much do you have?
- How profitable is the venture? What is your Return on Investment (ROI)? ROI could be as low as 10% or as high as 100%
- How do you plan to maximize profit?
- How will you get paid? What is the exchange rate? How long should it take to get your money?
- For how long is the product available? Some agro-produce/crops are seasonal. Is there enough in the market to sustain delivery? Some newbies accept export contracts for products that are either not available or not sustainable. This results in customer disappointment and creates a negative reputation for other well-meaning exporters.
- What is your mode of transportation/shipping?
NOTE: To increase your chances of success in the agricultural export business, you need some hands-on training. In the export business, the devil is in the details. Details are what you need. It will cost you but you will be thankful for it.
2. Register a business name
Without a registered business name, your export business is dead on arrival. Having a business name gives you more credibility and is a requirement for getting your NEPC export license. Your business must be registered as either a Limited Liability Company, cooperative society, or Government/Non-government organization. This article answers the 5 most frequently asked questions about business name registration in Nigeria.
3. Get the NEPC export license
To do this, you need to visit the NEPC office in your state. You will:
- Buy Exporters Registration Form at the cost of N1,000
- Pay an N10,000 registration/processing fee and
- Submit your completed registration form to the NEPC, attaching the following documents:
- Photocopy of Company’s Certificate of Incorporation;
- Certified True Copy of Memorandum and Articles of Association
- Certified True Copy of Form CO7, in case of Limited Liability Company or a copy of the Law establishing the agency in case of Government Organization.
Alternatively, you can register on the NEPC website. Download the requirements and procedure for online registration here
Export contract sourcing – Where to find buyers
This is where people have the most headache; you don’t export if there is nobody to buy from you. So how do you source buyers?
- Friends and relatives: The best way to export your products is through friends and relatives abroad. I know a lot of people who export this way. Of all the problems people encounter in the export business, a greater percentage has to do with trust. You are going into business with someone you don’t know and anything can happen. But if you have someone on the other side you can trust, everything becomes easier. So the person can tell you what is what, help you sell your products, and make sure you get your money. You can export foodstuff to relatives in Europe and around the world where they enjoy Nigerian dishes. This is a cool way to make money.
- International trade websites: You can source buyers on international trade websites and portals. In the e-book, I listed over 10 super hot trade websites around the globe where you can showcase your products and find foreign buyers.
- You can get buyer recommendations from other exporters and export consulting firms. These are people who are already in the business and can show you the ropes plus get you a lead or two. This is where your ability to network comes into play.
Other ways to get buyers include trade brokers, Chamber of Commerce, and export agents.
How to get capital for your export business
If you are taking your first baby steps in exportation, taking a bank loan is not the best way to go. For a bank to grant you loan access, you must prove that you are already in the business and you can get back their money. If you are already an exporter and would like to get a bank loan to expand your business, here is an article on how to get an export finance loan for your non-oil export business.
For the first time exporters, there are other options available for you to source capital, like personal savings, family and friends, partnership and joint venture, etc. This article explains how to raise capital to start your business while this one shows you 5 places you can locate angel investors.
Summary
You can get more information and practical guidance in the information guide listed below.
If you decide exportation is not your thing, I have 50 agricultural business ideas you can start today and build your lasting wealth. Don’t like agriculture? No problem. Here are 13 business ideas you can start in a recession, 20 business ideas for students, or you can simply visit our business ideas section. There’s bound to be something there for you. Bottom line, you have no excuse to start your own profitable business.
I have to stop here because I have to stop somewhere. Agricultural export business is a broad subject; so much more is covered in the e-book as you will see below.
The XYZ of Export Business
If you are serious about starting your own export business, this is the only e-book you will ever need.
One thing I realize from experience is, sometimes an article, no matter how long, does not do enough to cover the depth of information beginners need to launch their own business in some difficult areas.
When such becomes the case, it calls for something much more revealing and informative than just an article. That is what I have done in presenting this e-book on exportation and international trade in Nigeria. Every bit of information you will ever need to start your own export business is contained in this 71-page information guide.
Here are some of what to expect when you get a copy
- A step-by-step approach to exportation – from export planning to get your money in your bank
- Action points – things you can do at the end of each chapter to solidify your knowledge
- How to plan your export business to not only get the best results but also convince banks and lenders to raise capital for your business
- A breakdown of all the documentation you will need
- How to find buyers for your export produce
- Top 10 trade websites and portals around the world where you will find serious buyers
- How to negotiate an export contract with a buyer to avoid being cheated
- Top 10 banks and organizations who are willing to give you export capital to boost your business
- Top places around the world where you can export to and what you can export there
- Plus so much more…