Importation is a key sector of the Nigerian Economy
One of the defining features of wealth in the world today is global trade. And as the world slowly changes into a small village of connected people, several people have embraced importation businesses to further deepening international trades between the different nations of the world. While the coronavirus pandemic has changed the nature of business in the world, countries have reopened for business and are showing great promise in investment areas.
Nigeria is one such country where importation is prominent and recently, we released a list of reasons why the time is right to import into the country. Nigeria is a secular country with one of the top industrial ports in Africa located in Lagos, arguably the economic heartbeat of West Africa. The large population of over 200 million people provides a ready market and any investor worth his salt knows that Nigeria is the nerve center for penetrating the African market.
According to trading economics, 43% of total imports in Nigeria come from Asia, about 34% come from Europe, another 15% come in from America while 7% are from other parts of Africa. The import scene in Nigeria is vast and diverse ranging from industrial products to consumer goods, food, and capital goods.
In order to begin import services in Nigeria, you would need to meet certain requirements and register formally with the relevant Nigerian government department. A key breakdown of this is in three phases which involves:
a). That you have to register with the tax authority (the Federal Inland Revenue Service) and also open a prescribed bank account in Nigeria
b). That you obtain adequate certification from the Central Bank of Nigeria which allows the government to monitor, regulate, and keep track of import activities in the country as well as facilitate import duty payments.
c). After this, the next process for imports would involve customs clearance procedures. You can check here to find out more about how to register as an importer in Nigeria.
The Nigerian Customs Service is directly in charge of all things relating to imports and exports in the nation and their job description include but are not limited to: regulation, revenue generation, accountability, and anti-smuggling measures, you may have to follow their page in order to keep track of their activities especially in areas of prohibited goods. It also pays to bear in mind that the condition of export countries also require certain documentation and requirements as regards the destination of goods to be imported/exported.
In 2019, Nigeria imported over $47.4 billion worth of goods which was 40% higher than in 2015 and about 29% higher than in 2018. This upward trend shows that in order to cope with the large population and rising demand importation is critical to the Nigerian market. Some of the most valuable products in high demand include machinery, steel, electronic gadgets/equipment, fuels, and lubricants among others. You can find more information on this here.
Usually, the rate of Value Added Tax (VAT) on goods and services is 5% and this also includes imported goods. However, certain goods are exempted from tax, some of the goods within this category are:
- Imported goods/items for humanitarian or aid projects.
- Commercial aircraft parts, spare parts, and machinery imported for solid mineral sectors.
- Diplomatic bags (items imported/purchased by representatives of a foreign government) etc.
After you sort out the journey of obtaining a license for importation the next big issue is going to be distribution and logistics. The first thing you need to know is that Nigeria is a heterogeneous nation and several regions situated based on geographical locations. If you or your brand have a widespread network in Nigeria, you can directly move your goods with little or no problems but if you do not have a large presence in Nigeria you can consider opting for third-party distribution networks, brands like Alliance experts offer professional services in this regard.
Finally, all the key indicators notwithstanding it are necessary to make sure you take out time to understand the business scene in Nigeria. It is highly recommended that you take note of government policies and market trends in the industry so that you can stay on top of the game when it comes to the import and export industry.
