In Nigeria, there are importers and there are exporters, and they both make huge amount of money from their import and export businesses. Taking a closer look at “Export Business in Nigeria”, it has to be said that Export business is one of the most lucrative businesses you can embark on, as there are a lot of opportunities that abound in the export business. There are various opportunities, owing to the fact that just as some commodities sell cheap in other countries but costs more when imported into Nigeria is the same way some commodities sell cheap in Nigeria but costs more outside the country.
Starting an export business simply requires you do your research well to have a key-down on most of those commodities that are being exported at a higher rate outside the country. These products are spread across every sector in every state in the federation and present a wide opportunity for any adventurous investor with the aim of processing them into raw materials or semi-finished goods for exports, as these products are mostly in high demands in the country where they are being exported to.
Truth be told, exporting business is quite challenging, even though it’s quite lucrative and you would be ‘flying a plane while reading the manual’ if you decide to dabble into export business without going through a post like this to enlighten you on what you need to do know to run a successful, legal and hitch-free export business in Nigeria. This post is not about to tell you export business is a bed of roses, as that would be a big lie but if you can shoulder the challenges and go through the right and legal process laid down by the government, then you can make a whole lot of money as an exporter.
The processes involved in running a successful export business are broken down into ten (10) different but sequential steps. Let’s check them out.
- Get Adequate Training: No matter how rich you are, it is simply impossible to just wake up and decide to start an export business. The export business is more complex than that. As a newbie, it is important you get some basic knowledge as to how the export market actually works, licensing, documentation, guidelines, port procedures and regulations, product sourcing, etc.
Workshops, seminars and so on have recently been organized by various companies and agencies, for entrepreneurs looking to try their hands on export business, especially in Lagos state. You need to look out for one and attend.
- Choose Your Products of Interest: You can’t be an exporter of all products. After receiving training, you sure need to specify what products you can easily export and turn your focus on those products. They should be products that you can easily make available in any required quantity at any time there is demand for it. Examples of regularly exported products include: cocoa, cashew nuts, cassava, bitter kola, etc.
Basically, there are two ways to source a product for export.
- You could either be buying from someone else.
- You could be producing the products yourself.
- Choose a Unique Business Name: After selecting your product of interest, it is imperative that when starting out as an exporter in Nigeria, you register the name of your export business with the Corporate Affairs Commissions (CAC). Doing this will add your business to the list of businesses officially recognized by the government, and it enough to ensure that another business cannot use your business name for their own business.
Note: Every business name must be unique and you can’t be allowed to use the name of a business that is already in existence.
- Get Shareholders and Directors: If you are running your export business all alone (sole proprietorship) or as someone’s business partner (partnership), then this doesn’t apply to you but if aren’t starting your export business as a sole proprietorship but rather starting out as a company (limited or unlimited), then you must have a minimum of two shareholders and two directors. (You can have a maximum of 50).
- Register Your office: Registration of your export business in Nigeria must have a registered office attached. Don’t stop reading at this point if you’re just starting out and you don’t have an office yet. There’s hardly any form of physical verification so what you really need is ‘office address’, and you might not have an office structure. As a start-up, you can put in your home address. The important thing is that there’s an ‘office address’.
- Get Registered With NEXP: It would be illegal for you to start carrying out any form of export trade without first registering with the Nigerian Export Promotion Council (NEXP). It is an important rule from the Nigerian Customs Service. Registration with the Nigerian Export Promotion Council is now easier, as you can simply log on to their website, (www.nepc.gov.ng) and click on the ‘Register here’ link on the right sidebar of the page. You will be shown the full details of the requirements and procedure.
- Registration of Form NXP: To run a hitch-free export business, the Nigerian Customs Service also requires that Nigerian exporters complete and register Form NXP (It has to do with funds). You can register with any authorized commercial or merchant banks of your choice. Your funds and transactions would be handled by your chosen authorized dealer, as you will be mandatorily required to open and maintain a Domiciliary Account with them, to which your payments will be deposited.
- Obtain Licenses and Permits: Asides obtaining registration forms, starting an export business in Nigeria requires obtaining licenses and permits as a means of the government’s approval of your business. There are general licenses and permits for owning and running a business in Nigeria, and there are some specific licenses and permits for operating an export business.
- Obtain Target Foreign Country Licenses: Exporting from Nigeria means importing into another country; and virtually all foreign countries has licenses and certification that must be obtained by businesses planning to sell their product or commodities to their citizens. You would need to find out about governing rules and regulations for each country you target to import to, so you won’t have any legal issues.
- Market To Your Customers: Your number one customers are no other people than importers. That is, those who import into those countries you’re targeting. You need to tell them the importance of your product if it’s new or implement some competitive strategy if it’s not. Overall, you need to create a good rapport with foreign countries’ importers.
Note: Have it at the back of your mind that your products would only be properly scrutinized and only allowed into the foreign country if all it meets their own required standard and all the paperwork is complete.
Also, don’t downplay the importance of any license or paperwork, as the one that seems the least significant might be the one that would land you some real legal headache. Some additional documents you might be required to produce include: Tax certificates (which can be obtained from tax offices), Insurance covers, and Certificate of incorporation (required for companies registered as corporations).