Nigeria is losing billions of dollars in potential economic value by exporting raw materials instead of processing, branding and marketing finished products, according to a report by Rome Business School Nigeria.

The report, titled Rethinking ‘Made in Nigeria’: Value Chains, Global Positioning and Economic Identity Transformation, said the country’s weak value chains are limiting the ability of local businesses to create jobs, earn foreign exchange and compete in international markets.

Nigeria’s shea industry illustrates the gap. The country 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, valued at about $6.5bn, according to the report.

Much of the value is created after the raw materials leave Nigeria, where they are processed into cosmetics and other consumer products, packaged and sold under international brands.

The same pattern extends to cocoa, leather, spices and other agricultural commodities, with Nigerian producers supplying raw materials while foreign businesses capture more of the value through processing, branding and distribution.

The report said the problem extends beyond agriculture. In the petroleum industry, Nigeria retains about 15 per cent of the sector’s value, compared with more than 40 per cent in Brazil, highlighting the economic cost of limited domestic value addition.

The findings come as Nigeria seeks to reduce its dependence on crude oil and strengthen domestic production amid pressure on foreign exchange and household incomes.

Crude oil accounted for 74.98 per cent of Nigeria’s exports in the second quarter of 2024 and 65.44 per cent in the third quarter, according to data cited in the report. Manufacturing, meanwhile, contributes about nine per cent of gross domestic product, while factories operate at about 57 per cent of installed capacity.

The report also highlighted weaknesses in agriculture, estimating that more than 40 per cent of fresh agricultural produce is lost after harvest because of inadequate storage, poor roads and weak cold-chain infrastructure. Smallholder farmers consequently lose more than 30 per cent of their income, it said.

Micro, small and medium-sized enterprises account for 96.9 per cent of businesses in Nigeria, employ 87.9 per cent of the workforce and contribute 46.32 per cent of GDP, according to the report. Yet they account for only 6.21 per cent of exports, underscoring the difficulty local businesses face in moving beyond domestic markets.

Founding president and dean of Rome Business School Nigeria, Professor Antonio Ragusa, said the country has the resources and entrepreneurial talent required to build a stronger manufacturing base but needs to capture more value from what it produces.

Nigeria must move beyond exporting commodities and focus on processing, innovation, branding and production that can meet international standards, Ragusa said.

He argued that “Made in Nigeria” should become associated with quality, innovation, reliability and international competitiveness rather than being treated primarily as a patriotic campaign.

Head of academics at Rome Business School Nigeria, Sam Igwe, said Nigeria could build a stronger national brand by improving institutions, industrial infrastructure and supply chains.

He cited Afrobeats as an example of how Nigerian creativity has developed global recognition and said similar efforts were needed to improve the international appeal of Nigerian products.

General manager of Rome Business School Nigeria, Olakunle Asummo, said policymakers and manufacturers need to address infrastructure, financing, certification, packaging and internationally recognised standards if Nigerian businesses are to compete more effectively abroad.

The report said consumer confidence is another barrier to the growth of local brands. Nigerians often choose imported products because they associate them with more consistent quality, better packaging, warranties and stronger consumer protection, rather than simply because they reject domestic products.

It recommended that future “Made in Nigeria” initiatives focus on five areas: international certification, product design, premium packaging, authentic storytelling and stronger consumer protection.

The report’s central argument is that Nigeria’s challenge is not a shortage of resources or entrepreneurs but the inability to connect production with processing, logistics, branding and global distribution.

Closing those gaps could allow Nigerian businesses to retain more value domestically, expand exports and create higher-paying jobs, while reducing the economy’s dependence on raw commodity exports.