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An average Nigeria Agro/food exporter is confronted with one problem to another in the course of carrying out the export business.
1. Mentorship:- This is the most serious challenge faced by Nigerian exporters. Export business (not until the recent time) is not popular as it was left in the hands of few smart investors, therefore most new entrants into the business lack the required knowledge as they only attend one or two days training. But mentorship is required so that the exporter can learn from the mentor who has accumulated experience in this business over years.
2. Government Regulatory Policies:- Another serious challenge being faced by Nigerian Agro/food exporters is the government policies and regulations which make it difficult to export some Nigerian products. Some of these products may require that the exporter obtain certificate or analysis report before they can be exported. Export goods, on this category are mainly food items. For instance, it is mandatory that all food items must be NAFDAC certified and health certificate is obtained. The cost and problems associated with these regulations are challenging to the exporters. If those regulations are streamlined and cost cut down reasonably, export business will be as easy as ABC.
3. Local Charges:- Exporters are made to pay too high local charges, the bulk of which goes to the hands of individuals and not government agencies due to bad policies and implementation. For instance, there are levies paid by the Agro/food exporters to local associations and at various designated points for trucks carrying containers.
4. Profit Consciousness:- Most Nigerian Agro/food exporters are too in a hurry to make profit in their export business transaction. As a result of this, they run into wrong hands from, sourcing to executing export process in their quest to reduce cost and make more profits. The prospective Agro/food exporter needs to be patient and with time good profit will come if the business is sustained.
5. Export Product Quality Control:- Due to the fact that most Nigerian Agro/food exporters did not go through practical export training they are not conscious of strict compliance to the quality of products as set out in the contract and therefore some of their consignments are not accepted or not paid for or are finally short-paid. In view of this, Agro/food exporters must ensure quality first as their watch word. It is not a do or die affair. Once a relationships must be preserved and that is what makes the business to continue and yield good prospects.
6. Export Season and Shipping Time Frame:- It is observed that most Agro/food exporters do not take cognizance of the season and the delivery period in the export contract. Agro/food export commodities are seasonal and are demanded by buyers in line with the seasons. This makes the buyer to spell out when shipping should commence, the total quantity expected and the entire duration of the contract. But along the line, it may happen for instance that rain starts on time, the seller has to inform the buyer of this development so as to either stop or continue the shipping. Sometimes, the information could come from buyer to the seller to stop further shipping because of either the season or other reasons to the best interest of both parties. Non compliance to this often results into products not being accepted by buyer or the goods are not entirely paid for or are short paid.
7. Export Product Source, Processing And Equipment:- Agro/food export products are sourced mostly in rural area where processing has to be done manually, in not too clean or hygiene environment. This creates very serious challenges to the Agro/food exporters that more days may be spent in order to ensure products are processed and packaged based on buyer's requirement. This often results in more expense, thus increasing cost of operations with the resultant effect on the level of profit and the return on investment. But where there is adequate processing equipment and enabling environment, exporting is the best placed to make more profits with less costs.
8. Finance:- Finance is another major challenge Agro/food exporters are facing where buyer requests for a minimum of 2x20" FCL per shipment, they end up shipping 1x20" FCL one in six months due to insufficient funds. Where funds are available the cost may be too high thereby eating almost the profit of the business. The truth is that Agro/food exporters should ensure they have a good mentor and a good source of finance that is less expensive and with convenient terms.