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Nigerians small scale entrepreneurs -Benefiting from the foodstuff export market irrespective of the challenges
The Demand for African foodstuff in Europe and America is rising due to the increasing number of Africans, particularly Nigerians who sojourn to these Countries for better life. There are many small exporters of foodstuff in the sub-region who depend on middlemen to export foodstuff in small quantities and sell them directly to consumers or retailers running ethnic shops in the United States of American or Europe. The volume of Nigerian export of foodstuff to these countries is still on a very small scale considering the estimation of 20 million people of Nigerian descent reside outside Nigeria, with the majority living in the United Kingdom and the United States. This is a great opportunity to sell to this category of people. The few exporters of African foodstuff cannot meet with the demand of Nigerians which populations are increasing everyday in US and UK.
The exportable foodstuffs to the foreign Countries are Smoked fish, Gari, Beans Flour, Melon seed (Egusi Ground), Ogbono,Cassava Flour, Bitterleaf, Dried Ugu leaf:, Palmwine, Butter production. Coconut processing,Pepper,Tomato paste, Hibiscus flower, Yoghurt,Pap (Ogi), Ukazi leaf
Others are, Hot Chilli Pepper – Ground, Kolanut, Potato, Semolina, Ginger beer, Kilishi, Soybean, Groundnut, Okra, Cassava, Yam, Honey, Snail, Bitter Kola, Ofada rice, Catfish, Shrimps, Pounded Yam Flour, Poultry, Fruit juice, Cashew, Plantain Flour, Palm Oil
Product Sourcing: Every exporter is strongly advised for their best financial interest to select foodstuffs which they intend to export based on accessibility and availability.
Starting foodstuff business on a small scale: Company registration is optional since you are doing it on a small scale, which means you are sending the foodstuffs through an individual, the start up capital is between N150,000 to N200,000 an e-mail, a mobile phone and an account with a reputable bank here in Nigeria, however having a domiciliary account will be better, You don’t need previous experience in the field but you should have a “GOOD HEAD” for organizing. You can get support from an organization called Association of Micro-Entrepreneurs of Nigeria (AMEN) it will allow you to get NAFDAC number You can also make use of their factory site which will enable you operate the business successfully. You can package any of these products into Bottles or Small Nylon bag of 1kg and 2kg, you can penetrate the local market and Sell to busy office executives, professionals, high-net worth individual, and supermarkets. The NAFDAC number on your product will give your food product more credibility in African foodstuff market in US and UK when you are finally set for the international market.
Opportunity for small investors: As a small investor you can send this product through the NIPOST, or send it by air, NIPOST have a ready a made cartons that can take up to 30kg which is cost N40,593.00. Perishable products are no allowed through the NIPOST because it takes up to five to seven working days before the products get to the UK and US receptively. But you can send perishable items by air because it takes only 8hours to get there. It is important that you send the foodstuff to an individual because if you use a company address you may need to answer a lot of questions.
Prepare a massive mail campaign to every prospective buyer, write a letter introducing your companies, goods and quality specification, that you will package according to their requirements and don’t fail to quote the selling price and Payment terms acceptable.
How new entrants can get buyers: You can get buyers by advertising your product on line, you can have a websites where you will display your product. Make use of social site like facebook or twitter, you can also register with some trade sites like Alibaba, ,tradekey and so on. You can advertise your product as a free member. It will also give you a privilege to chart with foodstuff buyers abroad.
How to identify genuine buyers: You will receive mails from intending new buyers but you will need to ask them some relevance questions like their Company registration details, phone numbers, and office address, ask them if they have an office or a relative here in Nigeria that you can deal with, you will also need to ask them to give you the list of their customers here in Nigeria, this will allow you to know how genuine and reputable they are in the foodstuff importation industry .However you need to agree on a particular payment pattern.
How to deal with responses: A lot of response will be coming from some Nigerians and Africans that operates African shops in foreign Counties, because some of them are looking for foodstuffs distributors you may need to send free samples to some of them, while you make them chose the right packaging pattern for the product you are sending.
Opportunity for Nigerians who have friends and relatives in US and UK: You can send the foodstuff to friends and relatives in US and UK, they will help you sell the foodstuff and pay the money into your account in Nigeria. You don’t need to go through the rigorous of cross checking who is genuine or not, they know the terrain and they will help you sell directly to African foodstuff importers and African food stores abroad.
Nigeria will remain a mono-culture economy since it has failed to tap into the African Growth and Opportunity Act (AGOA) launched by the United States since year 2000.The concept of AGOA introduced by the Clinton administration was to encourage African countries to increase their exports in non-traditional products to the US, thus adding value to raw material from developing economies. Nigeria ranks only high in the energy-related products sector. The country has failed woefully in the foodstuff exportation category while a company like Ghana has support from their presidency that is why you will see some branded foodstuffs in African restaurant in UK and US “made in Ghana” and it will surprise you to discover that some of the raw materials are exporter from Nigeria to Ghana by the Nigerians Manufactures who has set up such company in Ghana. Nigerians small scale entrepreneurs who does not have enough funds to set up such businesses has decided to remain in the Country and send such foods through an individual making 100 to 400% return on investment.
AGOA is a window of export opportunities which can also serve as a catalyst towards achieving Nigeria’s vision 2020 in terms of foreign earnings, boosting production and capacity utilization and generating hundreds of thousands of gainful employments through foodstuff exportation. Foodstuff exportation business can generate employment if the federal Government can establish cold storage facilities and agricultural trade support infrastructure at designated points
Challenges being faced by Nigeria in foodstuff exportation sector includes, Stringent Sanitary and Phyto-Sanitary (SPS) requirements, High transportation cost and poor trade facilitation system, Difficulty in accessing finance and credit facilities by manufacturers and exporters, especially the SMEs, Lack of adequate training and modern equipment in processing value -added agricultural products, Unwillingness of our business people to take risks associated with foodstuff export business, Lack of basic information about doing business in the US market and most importantly Packaging and labeling. Nigerians who are ready to start this business should keep themselves informed few Nigerians who currently in foodstuff exportation sector cannot meet the demand of Millions of yearning Africans in US and UK. This is a special invitation to the Nigeria multibillion naira foodstuff exportation industry.
Tunji Afuwape CEO 21st Strategies
Small business and SME finance expert