Despite Nigeria’s access to preferential trade under the African Continental Free Trade Area (AfCFTA) and the United Kingdom’s Developing Countries Trading Scheme (DCTS), structural and systemic constraints continue to limit the growth of the country’s non-oil export sector.
According to a new report by the Network of Practicing Non-Oil Exporters of Nigeria (NPNEN), domestic supply-side weaknesses and external compliance requirements are holding back consistent participation and scale, even as trade frameworks present strategic opportunities.
Supply-side bottlenecks and standard compliance
The Market Access Study for Nigeria’s Non-Oil Exports, launched on Tuesday in Abuja, highlights that the extent to which these trade preferences translate into sustainable progress depends on Nigeria’s ability to address structural issues. Essential requirements include expanding processing capacity, upgrading quality infrastructure, strengthening standards compliance, and improving logistics.
“The theory is very different from the practical,” the report noted, reflecting exporters’ frustrations with navigating complex regulations, logistics bottlenecks, and limited access to finance.
The study identifies two categories of constraints: “before-the-border” challenges, including high domestic trade costs, poor infrastructure, and fragmented regulatory processes; and “beyond-the-border” challenges, such as compliance with foreign technical standards and sanitary and phytosanitary measures.
According to the report, 66 per cent of surveyed exporters recorded export values below US$50,000, while no firms fell within the US$50,001–US$1 million range. Micro and small firms dominate the low-value band, with only medium and large enterprises—those with more than 50 employees—reaching higher export thresholds.
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This reflects a structural exclusion from scale, limiting Nigeria’s ability to build a predictable and competitive non-oil export base. Furthermore, exporters rely heavily on informal networks; 53 per cent engage directly with foreign buyers through personal contacts, while only 9 per cent use e-commerce platforms.
Funding remains a critical bottleneck. Only 4 per cent of Nigeria’s approximately 40 million MSMEs access formal loans, leaving most exporters dependent on high-cost informal finance that is often mismatched to export cycles.
The report, funded under the Nigeria Economic Stability and Transformation (NEST) Programme by the UK Foreign, Commonwealth & Development Office (FCDO), warns that implementation gaps remain within the AfCFTA. Although the agreement aims to eliminate tariffs on approximately 90 per cent of tariff lines, divergent national standards and inconsistent customs practices create regulatory fragmentation.
Intra-African trade still accounts for only approximately 15 per cent of Africa’s total trade, compared with more than 60 per cent in Europe. Nigerian exporters frequently encounter varying documentation requirements and inspection procedures across ECOWAS and broader African markets, eroding the seamless trade environment envisaged under the AfCFTA.