By Isaac Mission
Nigeria is losing billions of dollars in potential economic value because it continues to export large volumes of raw materials instead of processing, branding and marketing finished products, according to a report by Rome Business School Nigeria.
The report, titled Rethinking ‘Made in Nigeria’: Value Chains, Global Positioning and Economic Identity Transformation, identified weak domestic value chains as a major obstacle to job creation, foreign exchange earnings and the global competitiveness of Nigerian businesses.
The shea industry was cited as a clear example of the country’s value-addition gap. Nigeria reportedly 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.
According to the report, much of the economic value generated from Nigerian shea is captured outside the country after the raw material is exported and transformed into cosmetics and other finished consumer products.
Similar challenges affect Nigeria’s cocoa, leather, spices and other agricultural commodities, with local producers largely supplying raw materials while businesses abroad benefit from processing, packaging, branding and distribution.
The report said the problem is also evident in the petroleum sector, where Nigeria retains an estimated 15 per cent of industry value compared with more than 40 per cent in Brazil.
The findings come at a time when Nigeria is seeking to diversify its economy away from crude oil and expand domestic production amid foreign exchange pressures and declining household purchasing power.
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 referenced in the report.
Manufacturing contributes approximately nine per cent of Nigeria’s Gross Domestic Product, while factories reportedly operate at about 57 per cent of installed capacity.
Agriculture also faces significant losses. The report estimated that more than 40 per cent of fresh agricultural produce is lost after harvest due to inadequate storage, poor transportation networks and weak cold-chain infrastructure. It added that smallholder farmers consequently lose 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 about 87.9 per cent of the workforce, while contributing 46.32 per cent of GDP. However, they account for only 6.21 per cent of exports, highlighting the difficulty faced by local businesses in accessing international markets.
The Founding President and Dean of Rome Business School Nigeria, Professor Antonio Ragusa, said Nigeria possesses the natural resources and entrepreneurial capacity needed to develop a stronger manufacturing sector.
He said the country must move beyond the export of commodities and prioritise processing, innovation, branding and production that meets international standards.
According to Ragusa, the concept of “Made in Nigeria” should increasingly be associated with quality, innovation, reliability and global competitiveness rather than being viewed solely as a patriotic campaign.
The Head of Academics at Rome Business School Nigeria, Sam Igwe, also called for stronger institutions, industrial infrastructure and supply chains to help Nigerian products gain greater international recognition.
Igwe pointed to Afrobeats as evidence of Nigeria’s ability to build globally recognised brands and argued that similar strategies could be applied to locally manufactured products.
The General Manager of Rome Business School Nigeria, Olakunle Asummo, identified infrastructure, access to finance, certification, packaging and compliance with internationally recognised standards as some of the major issues that policymakers and manufacturers must address.
The report further identified consumer confidence as a major challenge for local brands.
It noted that many Nigerian consumers prefer imported products because of perceptions of more consistent quality, better packaging, warranties and stronger consumer protection, rather than simply because they reject locally made goods.
To address the challenge, the report recommended that future “Made in Nigeria” initiatives focus on international certification, product design, premium packaging, authentic brand storytelling and stronger consumer protection.
The report concluded that Nigeria’s fundamental challenge is not a shortage of resources or entrepreneurial talent, but the weak connection between production and the systems required to transform products into globally competitive brands.
It argued that strengthening processing, logistics, branding and international distribution could help Nigerian businesses retain more value within the country, increase exports, create better-paying jobs and reduce dependence on raw commodity exports.
