Nigeria is losing significant economic value, jobs and opportunities by exporting raw materials instead of processing, branding and marketing finished products, a new report by Rome Business School Nigeria (RBSN) has found.
The report, titled: ‘Rethinking ‘Made in Nigeria’: Value chains, global positioning and economic identity transformation,’ said Nigeria’s persistent failure to build globally competitive industries was not due to a lack of entrepreneurial talent or natural resources, but weaknesses across its value chains, industrial infrastructure, branding and production systems.
It said the country must move beyond encouraging Nigerians to patronise locally made products and instead develop a globally competitive ‘Made in Nigeria’ brand built around quality, innovation, trust and international standards. According to the report, Nigeria supplies about 40 per cent of the world’s raw shea nuts but captures only about one per cent of the global shea products market, estimated at $6.5 billion.
It said the bulk of the value is created outside Nigeria, where raw shea is processed into cosmetics and other premium products and sold under international brands.
The report said a similar pattern exists in cocoa, leather, spices and other agricultural commodities, with Nigeria producing raw materials while other countries undertake processing, branding and marketing and consequently capture higher returns.
It also found that only about 15 per cent of the value generated from Nigeria’s petroleum industry is retained domestically, compared with more than 40 per cent in Brazil.
The report said the low level of domestic value retention was contributing to unemployment, import dependence, high production costs and weak industrial capacity.
It noted that businesses in Nigeria are forced to contend with poor roads, unreliable electricity and high logistics costs, which increase the cost of locally manufactured goods and undermine their competitiveness.
The report further estimated that more than 40 per cent of fresh agricultural produce is lost after harvest due to inadequate storage, poor roads and weak cold-chain systems, resulting in smallholder farmers losing more than 30 per cent of their income.
It also highlighted the weak export performance of Micro, Small and Medium Enterprises (MSMEs), which account for 96.9 per cent of businesses, employ 87.9 per cent of the workforce and contribute 46.32 per cent of Nigeria’s Gross Domestic Product.
Despite their economic dominance, the report said MSMEs account for only 6.21 per cent of exports, indicating that most businesses remain focused on survival rather than developing globally competitive products.
Nigeria’s dependence on crude oil also remains a major concern, with crude accounting for 74.98 per cent of exports in the second quarter of 2024 and 65.44 per cent in the third quarter, according to the report.
It added that manufacturing contributes about nine per cent of GDP, while factories operate at approximately 57 per cent of installed capacity.
Speaking on the findings, the Founding President and Dean of RBSN, Prof. Antonio Ragusa, said Nigeria had the resources and human capital required to become a manufacturing powerhouse but must shift from exporting commodities to creating value through processing, innovation, branding and competitive production.
Ragusa said ‘Made in Nigeria’ should be repositioned from a patriotic slogan to a mark associated with quality, innovation, trust and international competitiveness.
The Head of Academics at RBSN, Sam Igwe, said Nigeria had the capacity to develop a strong national brand capable of increasing the global appeal of its products, similar to the international influence achieved by Afrobeats.
He called for stronger institutions, modern industrial infrastructure and efficient supply chains capable of producing goods that meet international standards, while urging greater investment in national branding.
The General Manager of RBSN, Olakunle Asummo, described the findings as a wake-up call to policymakers, investors and manufacturers.
He said Nigeria’s entrepreneurial capacity would only translate into sustainable economic growth if businesses had access to reliable infrastructure, quality certification, modern packaging, financing and globally recognised standards.
The report also identified consumer trust as a major obstacle to the growth of locally made products, noting that many consumers choose imported goods because of concerns about consistency, quality assurance, packaging, warranties and consumer protection.
It recommended that future ‘Made in Nigeria’ initiatives focus on five areas: international certification, world-class product design, premium packaging, authentic storytelling and strong consumer protection.
The report said strengthening these areas would enable Nigerian products to compete more effectively in international markets, create jobs, reduce poverty and support sustainable economic growth.