Nigeria to Ramp Up Commodities Exports to Boost Economy: Here are the Best Ones to Trade

Nigeria has always had rich and abundant resources. The reason local goods have not been acceptable in the international market was not because of any defect of the goods themselves but because of a lack of commodity standardisation.

The government, however, is currently taking steps to change that. While its main focus is on the nation’s agricultural sector, its efforts encompass the commodities market as a whole—as of now, the Securities and Exchange Commission has licensed five exchanges, approved the trading and framework for operations of different instruments, and is collaborating with stakeholders like CBN and NAICOM.

You, too, can profit from these initiatives that are creating favourable market conditions for commodities trading. The key lies in choosing the best commodities to trade. The following is an overview of the best ones to consider.

Crude oil

This natural resource is extremely significant in Nigeria’s economy. It’s the nation’s primary source of revenue, totalling $340 billion (₦256 trillion) in exports since the 1970s. It’s also currently the major source of energy for households, with most families using petrol or diesel-powered generators to power their homes and appliances. It is also the foundation of the many raw materials that different sectors use to create their products. If you want to trade a commodity that has undeniable importance and underpins several industries, choose this one.

That said, it must be noted that Nigeria is currently facing economic challenges regarding crude oil theft. Large volumes of the material are continuously being stolen, leading to the economy losing out. The oil industry also faces stagnant liquidity issues, supply chain disruptions, and the prospect of eventually being overhauled in favour of other energy means. At present, however, the government is still investing in the commodity—its Bonga South-West Aparo Oil Project with Shell, for example, is set to run for 20 years. Crude oil is still very lucrative to trade.

Natural gas

Nigeria has vast stores of natural gas, holding around 206.5 trillion cubic feet of energy. It is one of the most popular and valuable trading commodities—not just in Nigeria but across the globe. This is because of natural gas’ frequent price movements, which offer profitable opportunities to traders, and its sensitivity to global events like climate change mitigation efforts.

In fact, President Tinubu has already expressed his intention to shift Nigeria to a gas-powered economy. He plans to leverage natural gas’ domestic utilisation, process it as an international export, and turn it into the transition fuel in his mission to fundamentally restructure Nigeria’s economy for expansive growth and sustainability. While natural gas’ full potential hasn’t yet been reached, it’s an excellent commodity to trade with and looks to increase in value over time.

Gold

This versatile metal has many uses. It’s a great material for electronic components, jewellery, and coins. As an investment, it’s very good at keeping its value and is often used as a hedge against inflation.

Nigeria has substantial untapped solid mineral deposits that include gold. Until now, these stores have mostly benefited artisanal and small-scale miners rather than the broader economy. That may now change with the new focus on commodity trading. Dukia Gold, a company that transacts with this precious metal, is already listed on the Lagos Futures and Commodities Exchange, enabling it to create fungible products and diversified financial instruments that act as the exchange’s underlying asset. Similar projects with gold may follow suit, including ones supported by the government, and you may want to align yourself with the burgeoning trend and trade with this commodity.

Cocoa beans

Cocoa beans are valuable as a good in itself or as an essential ingredient to create the ever-in-demand chocolate. They’re also difficult to grow—if circumstances aren’t ideal, the average tree can produce as little as 3 pounds of beans a year or less. They thrive in warm and humid climates, making Nigeria a perfect environment for plantations. In fact, Nigeria is considered the fifth-largest producer of cocoa beans in the world. You can take advantage of that once you start trading with this prized commodity.

The commodities market in Nigeria is poised for growth and expansion. Set yourself up for trading success by choosing the best commodities to transact with.