Buying and Selling

flag Nigeria Nigeria: Buying and Selling

In this page: Market Access Procedures | Reaching the Consumers | Distributing a Product | E-commerce | Organizing Goods Transport | Identifying a Supplier

 

Market Access Procedures

International Conventions
Member of World Trade Organisation
Party to the Kyoto Protocol
Party to the Washington Convention on International Trade in Endangered Species of Wild Fauna and Flora
Party to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
Party to the Montreal Protocol on Substances That Deplete the Ozone Layer
International Economic Cooperation
Member of Economic Community of West African States (ECOWAS)

Member of Organisation of the Petroleum Exporting Countries (OPEC)

Member of African Union (AU)

The country has signed a trade agreement with 21 other countries in the São Paulo Round of the Global System of Trade Preferences among Developing Countries (GSTP).

Non Tariff Barriers
Nigeria uses non-tariff barriers in order to gain self-sufficiency in a number of commodity markets. Under the Government's Action Plan for the transformation of the agricultural sector, they introduced a policy that acquires millers to substitute up to 40% of the wheat flour produced in the country by cassava flour. In order to protect local industries, some products (including food) are banned from being imported, while incentives have been introduced to promote local products.
Customs Duties and Taxes on Imports
11.2%


Customs Classification
Nigeria has signed the Convention on the Harmonized Commodity Description and Coding System and the Nigerian Customs that uses the HS nomenclature.
Import Procedures

On 1 January 2006, the country adopted a system of destination inspection (DI).

Any person wishing to import physical goods into Nigeria must first have the so-called 'M' form validated by an approved bank.

The Form 'M' is valid for six months for all import goods except machinery and equipment (valid for one year). Applications for subsequent renewal must be addressed to the Director of Trade and Exchange Department of the Central Bank of Nigeria.

Supporting documents must be clearly marked 'valid for Forex / Not valid for Forex' as appropriate.
All applications regarding goods subject to inspection at destination must be coded 'BA' and those exempted 'CB' in the prefix of the numbering system of the Form 'M'.

The Form 'M' and the pro-forma invoice (valid for three months) must include a clear description of the goods imported in order to facilitate price verification, including:

  • The generic name of the product (type, category)
  • The brand name, if applicable
  • The name of the model and/or reference number, if applicable
  • A description of its characteristics, specificity, capacity, size, function, etc.
  • The quantity and packaging

Documents concerning each import transaction must carry the name of product, country of origin, specifications, production date, batch number and the standards to which the goods were produced. All goods to be imported into the country must be labelled in English in addition to any other transaction language, otherwise they will be confiscated.

Items subject to health or environmental restrictions (food, drugs, etc..) must show expiration dates or shelf life and specify the active ingredients, if applicable.

All imported products must be accompanied by the following documents:

  • The Combined Certificate of Value and Origin (CCVO) containing information additional to the pro-forma invoice
  • The Form 'M' number
  • Appropriate description of the goods
  • The destination port
  • An identification of the consignment, the date of shipment, country of origin, country of supply
  • A packing list
  • A 'shipped' or 'accepted without reservation' bill of landing / air waybill / consignment note / waybill
  • The manufacturer's certificate must specify the production standards; if not applicable, a phytosanitary certificate or chemical analysis report must be supplied.
  • Certificates of laboratory tests for chemicals, foods, beverages, pharmaceuticals, electrical appliances and other regulated products, as appropriate.
Importing Samples
Valuable samples can be imported duty-free, by paying a deposit or a deposit equal to the charges payable on importing the specific goods. The deposit will be cancelled and/or refunded when the samples are re-exported.
 
 
For Further Information
Nigeria Customs Services (NCS)
Nigeria Trade Portal

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Reaching the Consumers

Marketing opportunities

Main Advertising Agencies
Afromedia PLC
Wetherheads Advertising Group
Optimum Exposures 
TBWA Concept

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Distributing a Product

Evolution of the Sector
According to 2015 Mc Kinsey report, wholesale and retail sales are already the third largest contributors to Nigeria’s GDP, contributing 16% to the total, albeit mostly through informal markets. Real GDP (2005 based) is growing at an accelerated rate of 7% (compound annual growth rate) and is expected to hit $294 billion by 2020.

The Nigerian retail market is highly fragmented and is mainly based on the informal sector. Modern retailing is considered alien to the Nigerian business landscape, constituting between five and six percent of the total market value, which is considered as traditional in the nature. However with the lifting of the textile importation ban, more international retail companies have been reaching the country. With regards to the food industry, the country has few supermarkets and about a dozen shopping centres (malls) located in major cities.

With 189m consumers in the country, there is ample room for growth, but navigating domestic hurdles has proven difficult. Currency depreciation and rising inflation, combined with a recession in 2016 and an increase in parallel market activity, have made the future of the retail industry difficult to predict. Nigeria’s recent economic troubles have had an impact on the immediate prospects for retailers, but these challenges do not weaken the long-term potential of the sector thanks to the country’s tantalising demographics. Nigeria retail sales dropped by 16% in 2017 to 105 billion from 125 billion recorded in 2016 according to AT Kearney’s 2017 Global Retail Development Index (GRDI) report.
Market share
The traditional industry leaders are large retail chains such as Shoprite, The Game, SPAR Nigeria, Woolworths, Mr Price, Hawes & Curtis. Shoprite, the South African retailer that opened its doors in 2005 in Nigeria, plans to open several new stores and spend more than $200 million on property development in Nigeria'. Online retailers have also emerged, such as Jumia, Konga and Sabunta. 
Retail Sector Organisations
Association of Nigerian Exporters (ANE)
Nigerian Association of Chamber of Commerce
Retail Association of Nigeria

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E-commerce

Internet access
As of December 2017, Nigeria had a population of 195.88 million people, of of which 98.39 million were Internet users, placing the penetration rate at 50.2 %, according to Internet Live Stats. Mobile phone penetration reached 84% in 2017, with 21 million smartphones in the country (The Guardian). Smartphone adoption can be attributed to cheaper phones on the market, an improving mobile network ecosystem, and access to light mobile applications such as Opera mini that consume less data, according to Business Insider. With the intention of expanding internet penetration rates in the country, Google launched 'Google Station' in 2018, a service that provides free public Wi-Fi in several locations across Nigeria.  As of July 2018, the most popular browser was Opera, which controlled 40.16% of browser market share, followed by Chrome (37.19%), UC Browser (9.33%), Firefox (4.79%), Safari (3.02%), and Android (1.57%). During that same period, Google was the most popular search engine, with a market share of 96.41%, followed by Bing (1.99%) and Yahoo (1.13%).
E-commerce market
The Nigerian e-commerce sector was estimated to be worth US$13 billion in 2018. However, economic stagnation in the country has been slowing down internet retail, according to Euromonitor International. Still, the sector has been growing in popularity among Nigerians, making the country a leading hub for e-commerce in Africa. The online retailing channel relies heavily on consumption from consumers with higher income, and many people still prefer to have a face-to-face transaction rather than shop online. Electronics and fashion products are the most popular product categories bought online, and are particularly in high demand among young adults. The growing young adult urban population is more inclined to shop online and they are increasingly using their smartphones to make their purchases, which has helped drive a rise in the internet retailing in the last few years. The most popular e-stores include Jumia, Konga, and Amazon, with the former two leading online mobile retailing in 2017, according to Euromonitor International. Traditional store retailers such as Next Cash and Mr. Price have opened e-stores to boost sales. Cash on delivery used to be the most popular payment method among Nigerian online shoppers, however many stores don't offer that option anymore, which has been seen as a way of truly enabling digital commerce and restructuring the industry. Other popular options are MallforAfrica’s webcard and Paypal - with Nigeria being one of their biggest markets. Nevertheless, PayPal is mostly used when purchasing internationally, and not from local websites. The government has been giving more attention to the e-commerce market in recent years, introducing the Cybercrime Law in 2015, which aims to prohibit and prevent fraud in online transactions.

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Organizing Goods Transport

Main Useful Means of Transport
Since the collapse of the Nigerian railway system, the transportation of cargo relies mainly on road transport. This form of transportation tends to be much more expensive and hampered by the bad quality of roads, it currently accounts for over 80% of all traffic intra-and inter-city. In addition, the country has almost 1,000 kilometres of coastline which accounts for 68% of total seaborne trade in West Africa. Many loaded cargoes arrive daily to help supply the Nigerian economy heavily dependent on imports. Domestic air transport is limited to large cities.
Ports
Onne Port Complex
Airports
Yola Airport
Sea Transport Organisations
Nigerian Ports Authority
Nigerian Maritime Administration and Safety Agency
Air Transport Organisations
Federal Airports Authority of Nigeria
Road Transport Organisations
Federal Road Safety Commission
Federal Ministry of Power, Works and Housing
Rail Transport Organisations
Nigeria Railway Corporation

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Identifying a Supplier

Type of Production
Nigerian industry is dominated by the oil sector, which provides 15% of GDP and 90% of foreign exchange earnings and benefits. However, the sector suffers from high transaction costs, due to underdeveloped transport infrastructure and insufficient power supply. Other industries include plantation crops (oil palm, rubber, cotton), mineral extraction, textiles, chemicals, manufacturing of building materials, etc.

Business Directories

Multi-sector Directories
6000profiles Directory - Businesses in Nigeria
Credit Risk Monitor - Nigeria - Directory of Public Companies in Nigeria
FineLib - A city directory of Port Harcourt with online listing of local businesses
Lagos List - Business directory in Lagos
NG Contacts Directory - Database with profiles and contact details of companies and businesses in Nigeria.
Ngex - Nigerian business directory
UK Nigeria Engineering Directory - Online web directory
Yalwa - Nigerian business directory
 

To search directories by industry in Nigeria, check out our service Business Directories.

 
Professional Associations by Sector
34 professional associations listed for Nigeria.
 
Trade Agencies and Their Representations Abroad
Nigerian Association of Chamber of Commerce, Industry, Mines & Agriculture (NACCIMA)
Corporate Affairs Commission (CAC)
Nigerian Export Promotion Council
General Professional Associations
Nigerian Association of small scale industrialists (NASSI)
Nigeria Association of Small and Medium Enterprises (NASME)
 
 

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Latest Update: November 2022