Customs Considerations When Exporting to Nigeria

Mufaddal K.

articleImg

Manufacturers looking to export their products abroad need to consider various factors when evaluating export markets.  One of those factors is the customs clearance infrastructure and processes within a given country.  This article presents an overview of the time and cost it takes for a local partner to clear imported products through customs in Nigeria.  This overview, along with a regional comparison, should help you better qualify Nigeria as an export market for your products.



Country Overview


Nigeria is located within the Sub-Saharan Africa region.  It has a population of roughly 196 million people as of 2018.  49% of the population lives in urban areas.  The World Bank categorizes it as a lower middle income country with a GDP per capita (PPP) of USD $5900 per person.



Regional Comparison


The "World Bank's Doing Business project" publishes an evaluation of countries based on their efficiency of cross border trade.  When assessing import efficiency within a country it primarily reviews four factors:


1.  The time for border compliance (imports):  Compliance time associated with the country's customs regulations, inspections and handling that takes place at its port or border.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


2.  The cost of border compliance (imports):  Compliance cost associated with the country's customs regulations, inspections and handling that takes place at its port or border.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


3.  The time for document compliance (imports):  The time for obtaining documents, preparing documents, processing documents, presenting documents and submitting documents.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.


4.  The cost of document compliance (imports):  The cost for obtaining documents, preparing documents, processing documents, presenting documents and submitting documents.  Assumes a US$50,000 imported shipment of auto parts weighing 15 tons for calculation purposes.



When evaluating border compliance time and cost amongst major regional economies, Nigeria ranks 16th regionally in terms of border compliance time and 15th regionally in terms of border compliance cost.  A US$50,000 imported shipment of auto parts would take 284 hours to clear border customs and cost roughly US$1077.


Country    Border Compliance Time (Hours)    Border Compliance Cost (USD)   
Namibia 6 $145
Rwanda 86 $282
Mozambique 14 $354
Zambia 120 $380
Uganda 154 $412
Cote d'Ivoire 125 $456
Mali 98 $545
Mauritania 69 $580
South Africa 144 $657
Ethiopia 166 $738
Kenya 180 $833
Guinea 91 $909
Somalia 85 $952
Angola 96 $1030
Nigeria 284 $1077
Cameroon 271 $1407
Republic of Congo 397 $1581
Democratic Republic of Congo 588 $3039


When evaluating document compliance time and cost amongst major regional economies, Nigeria ranks 14th regionally in terms of document compliance time and 15th regionally in terms of document compliance cost.  A US$50,000 imported shipment of auto parts would take 173 hours in Nigeria to have documents prepared & cleared and would cost roughly US$564.


Country    Document Compliance Time (Hours)    Document Compliance Cost (USD)   
Namibia 3 $63
Mali 77 $90
Kenya 60 $115
Rwanda 48 $121
Mozambique 24 $171
Zambia 72 $175
Guinea 156 $180
South Africa 36 $213
Cote d'Ivoire 89 $267
Uganda 138 $296
Somalia 76 $300
Republic of Congo 208 $310
Mauritania 64 $400
Angola 180 $460
Nigeria 173 $564
Ethiopia 194 $750
Cameroon 163 $849
Democratic Republic of Congo 216 $875


Differences Between Major Cities in Nigeria


The World Bank analyzed two major cities in Nigeria as part of their analysis.  As seen below, the time and cost for both border compliance and document compliance is the same for Kano vs. Lagos.


Major City Border Compliance Time (Hours) Border Compliance Cost (USD) Document Compliance Time (Hours) Document Compliance Cost (USD)
Kano 284 $1077 173 $564
Lagos 284 $1077 173 $564


Detail for Border Compliance Time and Cost


Border compliance time and cost are calculated as a function of three driving factors: the time/cost related to working with customs authorities, the time/cost related to working with other agencies and finally border handling time/cost.  Border compliance time and cost for both cities are driven by all three factors.


Kano Overview:


Detail Type    Time (Hours)    Cost (USD)   
Working with Custom Authorities 178 $400
Working with Other Agencies 24 $150
Border Handling 106 $527


Lagos Overview:


Detail Type    Time (Hours)    Cost (USD)   
Working with Custom Authorities 178 $400
Working with Other Agencies 24 $150
Border Handling 106 $527


Detail of Document Compliance Time and Cost


Document compliance time and cost is a function of the various documents required by the country when importing goods.  For Nigeria, the documents required when importing goods from abroad include a Bill of lading, Cargo Release Order, Combined Certificate of Value and Origin (CCVO), Commercial invoice, Exit Gate, e-Form "M" (valid for foreign exchange), Letter of Credit, Manufacturer's certificate of production or SONCAP, Packing list, Payment receipt of customs fees and duties, Pre-Arrival Assessment Report (PAAR), Single Goods Declaration (SGD), Terminal handling receipts, Product Certificate 1 (Unregistered Status) and SOLAS certificate.



Transportation Costs


Another factor that influences import trade efficiency is transportation costs.  For Kano, the port where goods would most likely land would be Apapa port.  When calculating transportation cost for the US$50,000 auto parts shipment, the World Bank calculates that the shipment would need to be transported 1002 km with an average travel time of 100 hours.  This brings the delivery transportation cost for the shipment to roughly US$1650.



For Lagos, the transportation cost is lower.  The World Bank calculates that the US$50,000 auto parts shipment, that would most likely also come through Apapa port, would need to be transported 11 km with an average travel time of 5 hours.  This brings the delivery transportation cost for the shipment to roughly US$436.



Infrastructure Digitization


Greater use of technology within the customs clearance process helps improve efficiency and lower time and cost associated with customs clearance.  Today many countries use digital systems to streamline the customs clearance process.  Many of these customs systems are known as EDI or Electronic Data Interchange systems.  More recently however, there has been a push to develop even more integrated customs clearance systems known as SW or single window systems.  These systems provide greater integration within a given country and between multiple countries when managing customs clearance.



Nigeria does have an EDI system known as Nigeria Integrated Customs Information System (NICIS).  It is also developing a SW system known as National Single Window.  More information about this system can be found at https://www.trade.gov.ng/login.do.