Nigeria’s push to diversify its economy beyond oil is gaining momentum at the subnational level, with states dramatically increasing investments in trade promotion. However, a new report by BudgIT reveals that structural bottlenecks at the federal level are undermining these efforts raising concerns about policy misalignment and wasted potential.
According to the report, Nigerian states collectively ramped up trade promotion spending to ₦128 billion, signaling a growing commitment to boosting exports, supporting small businesses, and attracting foreign investment. Many states have invested in export processing zones, trade facilitation offices, and agricultural value chains aimed at integrating local producers into global markets.
Yet, despite these ambitious initiatives, exporters continue to face steep challenges. Chief among them are federal regulatory bottlenecks and high shipment costs, which significantly erode competitiveness. Lengthy customs procedures, inconsistent documentation requirements, and port congestion have made it difficult for businesses to move goods efficiently.
A key issue highlighted in the report is the disconnect between state-backed export hubs and centralized federal agencies. While states are building infrastructure and offering incentives, agencies responsible for trade regulation and customs clearance operate under separate frameworks that are often uncoordinated.
This lack of alignment creates friction for exporters, who must navigate multiple layers of bureaucracy. For instance, goods processed in state-supported export zones still face delays at ports due to clearance inefficiencies and overlapping mandates among federal authorities.
The report warns that without improved coordination, Nigeria risks undermining its own trade ambitions. “There is a growing mismatch between subnational investments and federal execution,” BudgIT noted, emphasizing the need for a unified trade strategy.
Experts argue that streamlining processes, digitizing customs operations, and fostering collaboration between state and federal institutions could significantly reduce costs and improve export performance.
As Nigeria seeks to expand its non-oil export base, the stakes are high. States are clearly willing to invest but unless systemic bottlenecks are addressed, the return on that investment may remain limited.
