Exporting to Nigeria

With a population of 195 million and a Gross Domestic Product (GDP) of £397 billion in 2018 (World Bank, 2019), Nigeria has the largest population and economy in Africa. In the year up to June 2019, the total trade in goods and services between the UK and Nigeria was worth £5.1 billion, an increase of 14.4% on the previous year (ONS, 2019).

Demand for UK goods

Nigeria is the second largest African market for UK goods (UN comtrade 2019). UK companies are well known and UK brands in high demand.

Total exports from the UK to Nigeria amounted to £2.7 billion in the year to June 2019, up 15.9% on the previous year (ONS, 2019). Sectors offering particular opportunities to UK companies include energy, infrastructure and agri-technology.

Diversification means opportunity

UK expertise in engineering, science and technology means UK companies are well positioned to partner with Nigeria, as the government emphasises economic diversification to reduce the country’s dependence on oil.

The goverment’s Economic Growth and Recovery Plan has outlined 60 initiatives. These are centred on agriculture, industrialisation, energy and social investment, creating more opportunities within increased public-private partnerships.

Expanding economy

The Nigerian economy grew by 1.9% in 2018, and is predicted to expand by 2.3% in 2019 (IMF, 2019). This should lead to increased spending power among the Nigerian population, which in turn should benefit UK exporters.

Ease of doing business

146th

out of 190 countries (World Bank, 2019)

Currency

Naira

Business languages

English

GDP per capita

$2,033

UK is $42,558, (IMF 2018)

Economic growth

1.9%

(IMF, 2018)

Time zone

GMT + 1

Opportunities for UK exporters

There are opportunities for UK companies across a broad range of industries, and particularly in the following sectors:

Doing business in Nigeria

Tax and customs

The UK and Nigeria have signed a double taxation agreement, ensuring the same income is not taxed in more than one country.

The Nigerian Customs Service can provide information on import entry, valuation, rules of origin, prohibited items and clearance procedures

VAT

The Nigerian federal government charges 5% VAT, while state governments impose an additional 5%.

If you’re registered for VAT, it may be possible to zero-rate the goods you export to Nigeria, provided certain conditions are met.

Import duties

You’ll need to pay excise duty on any alcohol, alcoholic drinks, energy products, electricity or tobacco products you send to Nigeria.

You are encouraged to use a reputable customs clearance agent familiar with the country’s customs clearance formalities.

Regulations

Nigeria has very similar business and legal practices to the UK, and there are many laws and acts that provide a framework for businesses to operate in. These are regulated by a number of agencies in the country, including:

  • Nigeria Immigration Service (NIS)
  • Nigerian Corporate Affairs Commission
  • Nigerian Customs Service
  • Nigerian Federal Inland Revenue Service (FIRS)
  • Nigerian Investment Promotion Commission
  • Standards Organisation of Nigeria (SON)

Protecting your business

Nigeria has implemented some protectionist measures, such as preference given to goods made in Nigeria and services for all oil and gas projects. There are a number of laws and regulatory bodies that specialise in different areas. It’s therefore strongly recommended that UK companies entering into agreements in Nigeria take legal advice.

Intellectual property

You must register your intellectual property (IP) in Nigeria to guard against potential infringement. The registration of patents and trademarks is the responsibility of the Nigerian Trademark Patents and Designs Registry. As this process can take months or even years, you should contact an IP lawyer if you need patent protection when exporting.

Payment terms

Be wary of accepting cheques or credit for transactions, especially if you have not worked with the contact before. You may want to talk to a specialist about finance, including how to get paid in Nigeria, or you can contact the Department for International Trade (DIT) team in Nigeria.

Risks

Unfortunately fraud is prevalent in Nigeria, and UK businesses should carry out due diligence before embarking on any deals. Contact the DIT team in Nigeria if you’re in any doubt about the trustworthiness of business contacts.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.