Why Nigeria makes low profit from onion trade

The Nigerian Export Promotion Council (NEPC) has raised concerns over the low profits Nigeria earns from its onion trade, despite being one of the largest producers in Africa. With nearly two million tons of onions produced annually, Nigeria’s output remains significantly below its true potential, largely due to the high percentage of onions being sold […]

The Nigerian Export Promotion Council (NEPC) has raised concerns over the low profits Nigeria earns from its onion trade, despite being one of the largest producers in Africa.

With nearly two million tons of onions produced annually, Nigeria’s output remains significantly below its true potential, largely due to the high percentage of onions being sold in their raw form.

During a stakeholders’ interactive session on the development of an onion export strategy held in Gombe, the Executive Director of the NEPC, Ms. Nonye Ayeni, addressed the challenges facing the onion value chain in Nigeria.

Represented by Mustapha Umar Faruk, she highlighted that while states across the North East, North West, and North Central regions including Gombe, Sokoto, Kebbi, Zamfara, Katsina, Kano, Kaduna, Jigawa, Yobe, Borno, Bauchi, Taraba, Plateau and the FCT are engaged in onion cultivation, the country still struggles to maximize its potential due to inadequate processing and export strategies.

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Ms. Ayeni outlined that the onion value chain encompasses a broad spectrum of stakeholders, including farmers, processors, merchants and logistics providers. However, despite the potential to produce various value-added products such as onion paste, dehydrated onion flakes, onion powder, onion oil, onion vinegar, onion sauce, pickled onion, onion wine, and onion-based beverages, a staggering 99.9 per cent of Nigerian onions are traded in their raw form. This lack of value addition significantly reduces the profit margins and export earnings for the country.

The NEPC, through this programme, seeks to engage with critical stakeholders to develop a comprehensive Onion Export Strategy document. The aim is to tackle the existing bottlenecks that hinder formal exports, reduce onion production levels, and limit the nation’s export revenues. By doing so, Nigeria could enhance its competitive edge in the global onion market, which is increasingly being tapped by other nations.

Ms. Ayeni emphasised that as one of the top onion producers globally, Nigeria cannot afford to allow other countries dominate the market. She reaffirmed NEPC’s commitment to its “Double Your Export” initiative, which seeks to partner with relevant stakeholders to revamp the  onion sector for better export outcomes.

According to her, this initiative is critical to ensuring that Nigeria capitalises on its vast production capacity and secures a more prominent place in the global onion trade.

In his address, the Commissioner in the Ministry of Commerce, Trade, and Industry, Nasiru Aliyu, praised the NEPC for organising the event, especially at a time when there is growing awareness among farmers about the value and quantity of onions produced in Nigeria.

Represented by the Permanent Secretary, Babayo Hassan Abubakar, the Commissioner urged farmers to intensify their efforts in onion cultivation and not solely depend on government support, stressing the importance of individual and collective responsibility in achieving export success.

Sale Sadauki, the President of the Chamber of Commerce, also contributed to the discussion, pointing out the critical need for farmers to select high-quality seeds that can be stored for extended periods without damage.

He acknowledged NEPC’s efforts in providing improved seed varieties with multiple layers, which can withstand longer storage times and remain viable for export without significant loss.

Alhaji Sani Pantami, widely known as Sani Waya, the North East Chairman of Onion Producers, commended the NEPC for the knowledge imparted to farmers and other stakeholders on producing and packaging onions for the international market.

He reflected on the past challenges faced by producers who often suffered losses due to a lack of expertise in exporting their products. However, with the insights gained from the programme, he expressed confidence that the majority of producers are now better equipped to enhance their production processes, select high-quality seeds, and successfully navigate the export market.

As Nigeria continues to explore ways to boost its non-oil exports, the onion sector holds significant potential. With the right strategies, partnerships, and investments, the country could transform its onion trade from a low-profit venture into a thriving export industry that contributes meaningfully to the national economy.