Report: Nigeria’s Non-oil Export Underperformance Driven by Domestic Constraints Not External Tariff Barriers

• Laments lack of support for exporters
• Says to be competitive, country must shift from paying lip service to market access, match word with action

James Emejo in Abuja

A new study has established that contrary to assumptions, Nigeria’s non-oil export underperformance is primarily driven by domestic structural constraints rather than external tariff barriers.

Released yesterday in Abuja, the Market Access Study for the country’s non-oil export noted the ecosystem remained structurally constrained despite being moderately active.

The study which was conducted by Network of Practicing Non-Oil Exporters of Nigeria (NPNEN), with the support of the UK International Development and Nigeria Economic Stability and Transformation (NEST), pointed out that while official data revealed rising non-oil export values and expanding destination markets, there’s a highly skewed export structure dominated by micro-scale exporters, with a pronounced “missing middle” between low-value and high-value export performers.

It further noted that the country’s challenge was not market access in principle, but operational readiness and procedural capacity at the firm level, adding that without targeted interventions to close knowledge and compliance gaps, Nigeria risks underutilising available trade preferences.

The study noted that about two-thirds of surveyed exporters operate at export values below $50,000 while only a small minority exceeded $1 million, indicating limited graduation to a commercially sustainable export scale.

It stated that “This structural imbalance constrains Nigeria’s ability to translate policy commitments under the AfCFTA and the UK Developing Countries Trading Scheme (DCTS) into broad-based industrial competitiveness.”

The report added that the Comparative Constraint Index indicated that 62 per cent of export pressure originated from before-the-border bottlenecks, including logistics inefficiencies, regulatory fragmentation, documentation burdens, financing gaps, and export readiness challenges.

The study stated, “Although beyond-the-border constraints, such as freight costs, buyer requirements, and non-tariff measures, remain significant, they are secondary to domestic ecosystem weaknesses. This confirms that preferential market access alone is insufficient without complementary reforms that strengthen institutional coordination, supply capacity, and firm-level competitiveness.

“Under the UK DCTS specifically, the findings reveal a clear utilisation gap. While awareness of the scheme is moderate, confirmed usage remains low, and a substantial proportion of exporters are either unaware of their eligibility or lack an understanding of RoO requirements.

“This suggests that Nigeria’s challenge is not market access in principle, but operational readiness and procedural capacity at the firm level. Without targeted interventions to close knowledge and compliance gaps, Nigeria risks underutilising available trade preferences.”

Evidence further revealed that improving the non-oil export competitiveness under the UK Developing Countries Trading Scheme and the African Continental Free Trade Area required a shift from market access on paper to market access in practice.

It pointed out that while both frameworks present genuine opportunities for tariff relief, expanded market entry, and regional scale, utilisation remained constrained by domestic compliance gaps, weak institutional coordination, high logistics costs, limited finance, weak buyer linkages, and low practical awareness of how to operationalise preferences.

Among other recommendations, the study called for the establishment of a single export coordination platform for regulatory compliance; launch a national practical utilisation programme for DCTS and AfCFTA; reduction in export logistics costs and improve inland trade connectivity; creation of an export finance and risk-sharing package targeted at SMEs as well as build structured buyer-linkage and market-intelligence support.

It further called for strengthening value addition and scale-up support to address the missing middle.

Commenting on the report, National President, Network of Practicing Non-Oil Exporters of Nigeria (NPNEN), Hon. Ahmad Rabiu, said the report will significantly boost the growth of non-oil exports as findings reflected the real situation within Nigeria’s ease-of-doing-business environment.

He told THISDAY, “It has identified key challenges—barriers, if you like—and has also proposed practical solutions. Importantly, it recognises that institutions such as the Central Bank of Nigeria and other government agencies involved in exportation have been making efforts to facilitate seamless trade.

“However, many of the policies and decisions implemented in the past were not based on verified realities on the ground. These realities include infrastructure gaps, exporters’ capacity to comply with international standards, and institutional deficiencies in providing adequate support.”

He said, “Our goal is to secure buy-in from both regulators and exporters—buy-in that reflects an understanding of Nigeria’s unique operating environment and how best to navigate it.

I often cite Malaysia as an example. Nigeria was once ahead of Malaysia, but Malaysia succeeded because its policymakers and private sector agreed on a fundamental principle: think globally, but act locally. That means building strategies based on local realities—understanding the capabilities of your people and working from there.”

On his part, Executive Director, African International Trade and Commerce Research, Mr. Sand Mba, said, “There are multiple dimensions to the key findings in this report. It reveals the current status of Nigerian non-oil exporters, and the reality is that the majority of them are struggling.

“A key finding is that about 62 per cent of the businesses we engaged with identified their main challenges as occurring before reaching the border. These include issues with logistics, difficulties in meeting compliance requirements within Nigeria—not outside the country—and the prevalence of unofficial monetary demands. These are the major obstacles.

“However, most exporters are willing to comply and are eager to export, but they lack the necessary support. About 32 per cent indicated that they struggle to find buyers. There is no structured system in place to connect them with buyers. In many cases, it relies on informal networks—such as having a relative abroad who can help facilitate small exports, like a bag or two of cashew or other goods. Beyond that, there is no formal support system.

“Another important finding is that many exporters are unaware of existing trade agreements that Nigeria has entered into. For example, they are not familiar with the UK Developing Countries Trading Scheme, and they also lack awareness of the AfCFTA. While AfCFTA exists on paper, exporters do not know where to go to benefit from it or who to approach for guidance.”

Mba said, “Overall, the report highlights several critical gaps.

In terms of recommendations, there is a clear need for stronger collaboration. SMEs are not necessarily asking for training alone—they need practical support. There should be a central office or system that provides clear guidance on where to go, what to do, and how to navigate the export process. At the moment, such support structures are largely unavailable.

“Financial institutions also need to play a more active role. Banks cannot continue to expect export performance from businesses without providing the necessary financial backing. Access to finance is essential.

“The government, on its part, must ensure that policies are not just introduced but effectively implemented. There must also be clear metrics to measure impact and track progress.

Another issue identified is the “missing middle”- Most exporters are operating at very low levels—many do not generate export revenues above $50,000, with a significant number earning as little as $2,000 to $3,000. At that scale, it is difficult to grow or compete effectively.

“What this means is that businesses need more structured support and guidance to scale. At present, they are not doing enough—not necessarily due to lack of willingness, but due to lack of support—and this is a major reason for the challenges currently being experienced.”