Cross-border trade plays a vital role in Nigeria’s economic growth, especially with the increasing integration of technology. However, persistent and often overlooked supply chain challenges continue to undermine this progress. These challenges hinder the adoption of transformative technologies—such as agentic artificial intelligence—that could significantly boost efficiency and innovation, particularly in the marketplace ecosystem.

1. Overemphasis on Consumer Goods and the Undervaluation of Value-Added Products
Nigeria’s export strategy remains heavily skewed toward consumer goods, sidelining the immense potential of value-added products. To understand this imbalance, it is essential to distinguish among three core product types in trade:

• Consumer goods are finished items ready for immediate use—like biscuits, garri, and soaps.

• Value-added goods result from processing raw materials to increase their economic value—such as cassava flour, cocoa derivatives, or shea butter.

• Capital goods are tools and machinery used to produce both consumer and value-added goods.

Countries like China, which heavily invest in capital goods, can mass-produce consumer goods efficiently and at scale. Nigeria, on the other hand, lacks such industrial capacity. Even with opportunities such as the UK’s recent tariff-free access for over 3,000 Nigerian products, the impact remains minimal. This is because SMEs often lack the equipment, financing, or regulatory compliance—such as steam sterilisation equipment costing over ₦90 million—to meet international standards, especially in regions like Europe.

So, why the overwhelming focus on consumer goods? It stems from structural limitations—insufficient machinery, lack of scale, and fragmented markets—all of which make it difficult to maximise the economic benefits of non-oil exports.

2. Untapped Trade Blocs: Agreements on Paper, Not in Practice
Trade blocs offer Nigeria valuable pathways to global markets. Yet, they remain significantly underutilised. Consider the African Growth and Opportunity Act (AGOA), which provides duty-free access for eligible African countries to export to the United States. Despite its enactment in 2000 and extension through 2025, only a handful of Nigerian non-oil exporters have leveraged this platform in recent years.

Similarly, the African Continental Free Trade Area (AfCFTA)—Africa’s most ambitious trade agreement—promises to eliminate tariffs on 90% of goods and boost intra-African trade. Although most African nations, including Nigeria, have signed on, the agreement remains largely unimplemented in practice.

Take, for instance, a hypothetical trade route between Nigeria and Rwanda. Since Rwanda is landlocked, goods must be transported via seaports in Kenya or Tanzania and then overland to Rwanda. This multimodal setup significantly increases costs, transit time, and risk. What’s worse, many shipping lines prioritise intercontinental routes over intra-African ones. As a result, shipments from Lagos to Kigali may route through Europe or the Middle East—making the concept of “free trade” nearly irrelevant in practice.

3. Infrastructure Gaps: Payment Systems and Warehousing Woes
A well-functioning supply chain depends on efficient infrastructure, especially for sourcing, inventory, payments, and logistics. Unfortunately, Nigeria faces persistent bottlenecks in these areas—particularly in cross-border payments and warehousing.

Cross-border payments are critical for marketplace vendors who expect timely, foreign-currency payouts. Previously, platforms like Mercury offered solutions by enabling Nigerian businesses to open US accounts, integrate with global gateways like Stripe, and transfer funds home. But when Mercury restricted Nigerian users, a major gap emerged. Thankfully, platforms like Raenest are now filling this void, offering reliable payout systems from US accounts directly to Nigerian vendors—although long-term stability remains to be seen.

Warehousing presents a different kind of challenge. Global marketplaces often require vendors to subscribe and store inventory in destination countries, similar to Amazon’s Fulfillment by Amazon (FBA) model. However, Nigeria lacks a strong subscription culture, and most vendors are unwilling to pay recurring fees in foreign currencies without guaranteed sales. This stalls fulfilment efforts and complicates last-mile delivery abroad—limiting scalability for Nigerian marketplaces.

4. The Larger Implication: Missed Opportunities in Global Trade
The cumulative effect of these challenges is staggering. Despite the size of its economy, Nigeria is not among the top 50 exporters to the United States, the world’s largest consumer market. In 2024, Nigeria’s non-oil exports totaled only around $5 billion—a fraction compared to Mexico’s $500 billion and China’s $400 billion in exports.

Mexico benefits from robust infrastructure and strategic trade partnerships, such as the North American Free Trade Agreement (NAFTA). China, backed by extensive machinery and strong state support, dominates international markets with ease. Both countries have leveraged technology and scale to outperform competitors and deepen global trade relationships. Nigeria, meanwhile, remains stuck in low-volume, low-margin trade.

A Path Forward: Strategic Solutions for Long-Term Growth
Despite these challenges, Nigeria has the potential to reverse course—if it adopts targeted, scalable strategies.

a. Encourage SME Consortia for Scale

SMEs should be incentivised to form consortia to pool resources, meet bulk supply demands, and access shared logistics and financial infrastructure. This approach not only aggregates supply but also enhances bargaining power in international markets.

b. Build More Processing and Production Hubs

Establishing regional production hubs equipped with the necessary machinery can help improve product quality and consistency. These hubs must align with international safety and regulatory standards, allowing Nigerian products to compete globally.

c. Prioritise Value-Added Exports

While consumer goods are easier to produce, value-added goods offer greater long-term potential. They face fewer regulatory barriers, serve more diverse applications, and allow Nigerian exporters to differentiate themselves in competitive markets.

Conclusion: Redefining Nigeria’s Role in Global Trade
Nigeria’s export challenges are real, but they are not insurmountable. Addressing these foundational issues—imbalanced product focus, underused trade agreements, and infrastructure gaps—will unlock immense opportunities.

Now is the time for a strategic shift: we must rethink how we trade, how we build, and how we innovate. If Nigeria truly wants to move from the margins of global commerce to the center, it must invest in the systems, structures, and partnerships that power global supply chains.

Only then can we begin to realise our true potential—not just as a trading nation, but as a key player in the global economy.