Nigeria’s first trading company to supercharge non-oil exports

The federal government is setting up a national joint project to encourage micro, small, and medium-sized enterprises (MSMEs) in Nigeria to join the export business under the African Continental Free Trade Area (AfCFTA).

The Federal Ministry of Industry, Trade and Investment partnered with the Nigeria Commodity Exchange, Afreximbank, and the Africa Trade and Distribution Company to set up Nigeria’s first National Export Trading Company.

It is described as a “structural intervention” developed to finance and enable exports of Nigerian commodities “efficiently and competitively at scale,” according to Jumoke Oduwole, Nigeria’s minister of trade who formally announced the project during the West Africa Economic Summit (WAES) held in Abuja, Nigeria.

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According to the minister, the trading company will solve longstanding issues in the export business by providing market intelligence, logistics, finance and aggregation services to support MSMEs in meeting global demand and attract investors.

The trading company will be an operating entity of ATDC, earlier set up by Afreximbank as a continental trading company mandated to streamline regional trade and transform Africa’s productive capacity under AfCFTA.

A successful execution of the project will increase non-oil exports by encouraging smallholder farmers, informal cross-border traders and even larger corporations to participate in international trade by addressing fundamental challenges to productivity, especially in the farms.

“Nigeria has over 38 million smallholder farmers, producing 90 percent of our food, yet many lose 30 to 50 percent of their output before it reaches a buyer. The National Export Trading Company will change that,” Oduwole said.

“By investing in aggregation, traceability, warehousing, and structured market access, it will create a pathway for farmers and MSMEs to access formal regional and global markets.”

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It wasn’t made clear how much the government plans to pump into the project, but the project is expected to “align capital with capacity, connect local projects to global institutions, and engineer the platforms that unlock inclusive, long-term growth.”

Apart from the company, the Ministry of Trade reiterated its gazetting of zero duties under Africa, recalling that it opened a new Air Cargo trade corridor with 13 eastern and southern African countries, equipped with a market intelligence toolkit for their products, in collaboration with Uganda Air and the UNDP.

“Since yesterday, we have tracked over $400 million worth of transactions that will advance into investor discussions, a strong signal of both the quality of preparation and the renewed momentum behind Nigeria’s investment facilitation strategy.”