Exportable Nigerian Commodities

Nigeria, with its natural resources, is a nation with high growth potential. Scattered across the country are several solid mineral deposits. Her climate and weather conditions are ideal for cultivating exportable commodities that have high international demand. Ayemibo Bamidele is an avid blogger covering the great opportunities for export in Nigeria, in this issue he covers exportable commodities in Nigeria. Next issue he will explore Financing options for Exporters.

Nigeria is an emerging economy; however, because of the federal government’s focus on the exploration and exportation of crude oil, other exportable commodities are ignored, and much of her potential remains untapped.

Most of Nigeria’s commodity exports are primarily cultivated by small scale farmers. Despite this fact, the country still ranks among the top ten in the export of commodities worldwide. According to Chemonics International Inc.’s report called Overview of the Nigerian Sesame Industry, Nigeria was the seventh largest exporter of sesame seeds in the world in 2002. This position has improved to enter the top 5 Sesame Exporters globally by 2007 as will be seen later in this article.

The Agribusiness Development Assistance to Nigeria (ADAN) evaluated Nigerian commodities in terms of market, supply, profitability, barriers, geographic dispersion, environmental impact, employment generation, and foreign exchange earnings.

In its report, the ADAN came out with the ten most interesting products for export, listed below in descending order:

1. Ginger
2. Gum arabic
3. Sesame
4. Cashew
5. Leather/skins
6. Marine products (prawn farming)
7. Wood products (hardwood charcoal, plank, etc.)
8. Horticulture
9. Floriculture
10. Medicinal plants (Prunus africana or pygeum)

The potential of Nigerian exportable commodities has continued to grow annually due to the increasing world population and the consequent rise in the rate of consumption of these products. This is also manifest in the current global shortage of food and agricultural commodities.

In 2007, Nigeria produced over 110,000 tons of sesame seed, which is about 50% of the nation’s capacity. Half of this amount was exported and the other half was consumed locally. According to the 2007 United Nations Food and Agriculture Organization (UN FAO) report on sesame seeds, the 50% that was exported put Nigeria in 5th place among sesame seed exporters around the world.

The FAO states that ginger production worldwide looks optimistic due to the growth of harvesting areas and production since 1999. Ginger harvesting areas around the world were 310,100, 319,751 and 321, 732 hectares in 1999, 2000 and 2001, respectively; while production was 775,717, 812,372 and 835, 173 tons in 1999, 2000 and 2001, respectively.

Nigeria, which is the world’s largest ginger producer, harvested 166,800 hectares of ginger in 1999, and her area of cultivation expanded to 174,000 hectares in 2000 and 2001, because of the high and rising demand from both domestic and foreign markets.

On the other hand, cashew production in Nigeria has declined due to low patronage and increased post harvest losses and wastage. According to the National Cashew Association of Nigeria (NCAN), cashew can be found both in the wild and under cultivation in 16 of 36 states of the federation. The average annual output in 2000 was 176,000 tons. However, this number has decreased over the years.

The Ministry of Agricultural and Rural Development states that Nigeria presently produces 30,000 metric tons of cashew nuts per year from a total holding of 50,000 hectares, most of which are under small holdings or small scale farmers.

The importance of the development of exports in these sectors was highlighted in 2004, when, during her speech at the Nigeria National Crop Outlook Conference held in Kano, Nigeria, Mrs. G.M. Sasore, Specialist Advisor and CEO of the Nigerian Export Promotion Council said “Recent developments in the Nigerian economy had led to the recognition of the ultimate significance of development and marketing of quality agricultural produce as a means of enhancing the foreign exchange earning capacity of Nigeria.”

Another key factor in maintaining competitiveness in the future for Nigerian Commodity Exports will be the ongoing maintenance of the high quality of product which has become a hallmark of Nigerian agricultural exports in particular. It is a well known fact that the quality of a product will to a major extent determine the demand for it. A good quality product will attract the attention of importers even at a premium price whereas poor quality will require significantly lower prices and thus lower margins.

Throughout Nigeria a process of quality improvement and process standardization has been taking place to ensure that from the farm gate to the port of loading produce destined for export are bagged, standardized, sealed in bags duly marked for export with all the necessary information including type of produce, grading officer’s mark, grade, country of origin and other necessary particulars.

Only after this rigorous process are goods cleared for transport to further processing or to the port of loading. There a further series of inspections take place at registered warehouses by government approved inspection agencies to ensure that the quality stated from the farm gate is accurate.

Phytosanitary procedures such as fumigation or disinfection to eliminate living pests or contaminants are then employed where needed to ensure a safe product for export with appropriate certifications.

In conclusion, with more that 60% of Nigerian commodities being produced by peasant farmers, less that 40% of the arable land under cultivation and almost 50% of the commodities perished as post-harvest losses, it is therefore very obvious that Nigeria has very great potential for further growth in production, quality enhancement and standardisation that are yet untapped in the commodity export business.

The Nigerian Government has implemented a number of programmes to assist commodity exporters through the Nigerian Export Promotion Council which administers, among other activities, the Export Development Fund, Export Expansion Grant and an innovative ‘Manufacture–in-Bond’ scheme which can help alleviate some of the costs involved in getting goods ‘Export Ready’.

These government prigrammes coupled with private sector initiatives such as innovative export financing products offered by local banks such as Diamond Bank and multilateral international training certifications such as those offered by the International Finance Corporation through eBSI Export Academy (see www.fitinitiative.com for details) are essential ingredients to ensure a prosperous future not only for Nigerian agricultural and commodity producers, but also their brothers throughout Africa!