Report calls for stronger value chains, local processing and global branding of Nigerian products….
Nigeria is losing billions of dollars in potential economic value by exporting raw materials instead of processing, branding and marketing finished products, a new report by Rome Business School Nigeria has found.
The report, titled Rethinking ‘Made in Nigeria’: Value Chains, Global Positioning and Economic Identity Transformation, said weak domestic value chains are preventing Nigerian businesses from creating more jobs, earning foreign exchange and competing effectively in international markets.
It identified the shea industry as a clear example of the country’s limited value addition.
According to the report, Nigeria supplies about 40 per cent of the world’s raw shea nuts but accounts for only about one per cent of the global shea products market, estimated at $6.5 billion.
Much of the value is generated after the raw shea leaves Nigeria, where it is processed into cosmetics and other consumer products before being packaged and sold under international brands.
The report said a similar pattern exists across other commodities, including cocoa, leather and spices, with Nigerian producers largely supplying raw materials while foreign companies benefit from processing, branding and distribution.
The challenge, it noted, extends beyond agriculture to the petroleum sector, where Nigeria captures about 15 per cent of industry value, compared with more than 40 per cent in Brazil.
The findings come as the country seeks to reduce its dependence on crude oil and expand domestic production amid foreign exchange pressures and rising household costs.
Crude oil accounted for 74.98 per cent of Nigeria’s exports in the second quarter of 2024 and 65.44 per cent in the third quarter, according to figures cited in the report.
Manufacturing contributes only about nine per cent of gross domestic product, while factories operate at roughly 57 per cent of their installed capacity.
The report also highlighted significant losses in agriculture, estimating that more than 40 per cent of fresh agricultural produce is lost after harvest because of inadequate storage, poor roads and limited cold-chain infrastructure.
It said these challenges result in smallholder farmers losing more than 30 per cent of their income.
Micro, small and medium-sized enterprises make up 96.9 per cent of businesses in Nigeria and employ 87.9 per cent of the workforce, contributing 46.32 per cent of GDP.
However, the report said they account for just 6.21 per cent of exports, reflecting the difficulty many local businesses face in moving beyond the domestic market.
Founding President and Dean of Rome Business School Nigeria, Professor Antonio Ragusa, said Nigeria has the resources and entrepreneurial capacity needed to build a stronger manufacturing base but must do more to retain value from its commodities.
Ragusa called for a shift from commodity exports towards processing, innovation, branding and production that meets international standards.
He said the “Made in Nigeria” identity should be associated with quality, innovation, reliability and global competitiveness rather than being viewed mainly as a patriotic campaign.
The Head of Academics at Rome Business School Nigeria, Sam Igwe, said strengthening Nigeria’s national brand would require improvements in institutions, industrial infrastructure and supply chains.
He pointed to the global success of Afrobeats as evidence that Nigerian creativity can gain international recognition when properly developed and marketed.
The General Manager of Rome Business School Nigeria, Olakunle Asummo, said infrastructure, access to finance, certification, packaging and internationally recognised standards must be addressed to help Nigerian businesses compete globally.
The report also identified consumer confidence as a major obstacle, noting that many Nigerians prefer imported goods because they associate them with more consistent quality, better packaging, warranties and stronger consumer protection.
It recommended that future “Made in Nigeria” initiatives prioritise international certification, product design, premium packaging, authentic storytelling and stronger consumer protection.
The report concluded that Nigeria’s challenge is not a lack of resources or entrepreneurial talent, but weak connections between production, processing, logistics, branding and global distribution.
It said closing these gaps would enable Nigerian businesses to retain more value locally, expand exports, create better-paying jobs and reduce the economy’s dependence on raw commodity exports.
