Getting your business name registered can be expensive most especially when you are using a third party agent. In this article am going to show you ways How To Register A Business Name In Nigeria Online by yourself.
Before we drive in they are many reasons why you should register your business name with the Corporate Affairs Commission (CAC) of Nigeria. Except being recognized as a legal entity, you have so many other benefits which I would unfold below:
Benefits Of Registering Your Business Name in Nigeria with CAC
They are lot of benefit on why you should register your business name in Nigeria with CAC, below are the following reason why you should:
1. Your Business would be recognized as a legal entity
What this means is that whatever causes your business may have done you would not be affected by it. This simply means if any industrial accident occurs leading to property damage or lost, you would not be held accountable for it as the business owner even if a petition is been sent.
But for business owners who have not registered their business name, would be greatly affected by any problem that arises during their business days.
2. Have access to loan Services
Registering your business name with the CAC gives you the opportunity to obtain loans from banks and also receive government loans.
Without Registering your business name financial institutions may not grant you loans or government grants so in other to benefits from these loans you need proof of business ownership which is obtained from registering your business name with CAC whereby you would be given a certificate of ownership.
3. Can Open Corporate Bank Account
Getting your business name registered to give you the opportunity to open a corporate bank account. As some customers may not feel alright paying to your personal bank account.
Using a corporate bank account increases your business credibility. This helps you to open a separate bank account with your business name which is registered.
If your business name is not registered you can’t open a corporate bank account which limits your business.
4. Access to Online Payment Integration
When you are selling services or products online that require buyers to make a deposit using an online payment system such as Paystack. You are mostly required to submit your business certification of incorporation which is obtained after registering your business name to enjoy the full benefits which if you don’t have you may not enjoy the services fully or have some limitations.
5. Social Media Business Account Verification
Verifying your business account on Facebook or any other social media requires you to submit your business certification of incorporation obtained by registering your name. This verification can help you gain strong social credibility and help keep your business account separate from other business accounts that have little difference with your business name.
In Facebook or Twitter for instance you would receive a blue thick mark after verifying your business profile which one of the requirements is to submit your business certification of incorporation.
People often trust businesses on social media which have a blue tick mark as it shows they have gone into a long process of getting their business verified.
6. Winning Government Contracts
Getting your business name registered gives you the opportunity to win and bid for government contracts.
This is a number one requirement before securing any Government Contracts. Playing deaf ears to this could make your business ineligible to bid or win Government Contracts.
So what are you waiting for grab the opportunity Now and follow this step by step guide on How To Register A Business Name In Nigeria By Yourself.
They are many benefits you can get from registering your business name with CAC. So let drive into the step by step guide on how to register a business name in Nigeria online by yourself.
How Much to Register a Business Name in Nigeria
The cost of registering a business name in Nigeria varies and depends if you are using third parties such as agents or lawyers. This can make you spend more money than the official price of Registering your business in Nigeria.
If you can register your business name by yourself it would be easier for you to determine the price. Which you would be guided step by step on how to register a business name online in Nigeria by yourself without any added fees or pay extra fees.
The Corporate affairs commission of Nigeria has official prices of registering your business name on their official website.
Price for the application forms
The price for the application form is ₦500.00.
They are there (3) form obtainable to register your business and company in CAC these includes:
- Form application for company registration
- Form application for business name registration
- Form application for incorporated trustee registration
The form needed to register your business name is the Form application for company registration and the Form application for company registration. Others go for big businesses. As a new business, all you need to pay Is ₦10,000.00 you can pay more if the need arises.
Requirements To Register Your Business Name In Nigeria
In 2020 the Company Allied and Matters Act (CAMA) where amend and a lot of requirements have been developed to register a business today in Nigeria which is:
- In other to register a business you must be at least 18 years except if you have 2 olders shareholders in the business.
- You must propose at least two names for the business name registration.
- Your business objective must be started and must have one.
- Business Names that are already registered can’t be registered again and also business names related to government agencies would not be registered.
- The type of business you want to register must be stated it could be a private limited company, private unlimited company or a company limited by guarantee.
- The company must have a verified physical location address.
- If your business has a partner the share capital of each of the partners must be started.
- To register your business name you must have identification such as a voters card, driver license or international passport to register your Business.
- In the old Company, Allied and Matters Act before any business must register the minimum partner was 2 persons. But the current Company Allied and Matters Act have made it possible for a single individual to Register his or her business. This is to encourage Small business owners around the country so that their business can grow.
How To Register A Business Name In Nigeria online By Yourself
Steps on how to register a business name in Nigeria online by yourself online
You can register your business online using the CAC official website which I would carefully guide you on.
And this gives you the advantage to avoid travelling to a nearby CAC office to register your business while you can do it at the comfort of your home.
The CAC has laughed a website where you can easily register your business online instead of visiting the CAC office for registration. Below are the steps to take:
1. Name Your Business
Naming is an important step to take towards registering your business, you should have a business name that represents your business. The CAC law allows you to create 2 minimum names for your business in which one would be chosen. This is done so if the other name is taken you can go with the other name.
When naming your business it is important you choose wisely if you are consulting naming services like
or think wisely if you are naming your business by yourself.
It is important your business name meet the niche business you are Registering this would also help you in Branding and marketing.
For example, if you look at the concept from these brands, Opay, Shoprite, Paystack you’ll observe that these brand names represent what their business is all about.
So you should consider naming your business according to your niches.
This would make your business name search engine friendly and recognisable.
2. Verify your Chosen Business Name
Verifying if your business is unique and not used elsewhere would help make your business name unique and help you get smooth registration on the CAC website.
To check your desired business name availability you can search the business name you have chosen on the CAC search Portal to see if your Chosen Business Name has been taken or not.
How To Check Your Business Name availability On The CACC Public Search Portal
To check your business name availability on the CACC public Search Portal type in your desired name for your business.
Which will state if the business is available or not.
If your business is not available and used by another company the information of the company would show. Which means that you can’t use the same because two different business can’t use the same name.
If your business name has been taken it has best to look for another name that is not taken and proceed to the next step.
3. Create an account on the CAC website
After clicking on the signup link you would be presented with a form to fill. which would request your personal information, which must fill to proceed to the next step.
Take note the email address you provided would be used to send a confirmation mail to you. So ensure you fill in the correct details to avoid any issue with registration.
Once you have successfully confirmed your registration through the email sent to your email address. You would be pointed with a successful congratulation message from there you can then proceed to the next step.
4. Reverse your Business Name
To reserve your business name select the reservation option on the dashboard through the menu bar.
Once the menu has load click on the New name reservation option.
After clicking on the new page you would be redirected to a page where you will be given instructions to fill such as:
- Choosing your business name and the type of your business.
- Listing your business objectives.
- Listing your presenter details.
- Reviewing your application.
- Making the payment.
- Choosing your business name and the type of your business
For choosing your business “Name and Type”, check the image below and fill the form.
Make sure you read the instructions above the form before filling the form.
Once you have filled the form you can proceed to the next step Listing your business objectives.
Listing your business objectives
You are required to list your business objectives. On the list select the option that is most suitable for your business.
After that, you will be given a box where you will type short details describing your business.
Furthermore, you can now proceed to the next step.
List your presenter Details
The presenter details contain the information of the business owner or owners.
Ensure you cross-check the presenter details you have filled in.
Reviewing your application
This displays all the information you have filled in so far in respect to your application, including your:
If you found any mistake you easily change it by selecting the tab where the information is and correct the mistake.
So if your information has been corrected or mistake you can now proceed to the next step and make payment.
The price for reservation of a business name is ₦500.
To make the payment, you are expected to use the Remita payment option by selecting the Remita button below.
After this, you’ll be redirected to the payment page of Remita automatically to make your payment.
After you had made the payment successfully, the application for your business name or company name reservation would be submitted for approval.
Take note after summiting your application you have 60days periods to reserve your business if not you would have to start again.
Generate Your Payment Receipt
After you have successfully completed the payment you are required to print out the receipt. This can be done by clicking on the print option on the website. If you have a printer connected you can easily print out the receipt if not you can just take a screenshot of the receipt and take it to a nearby printer and print it.
Take note after you have summited your application for verification. It can take some time to be verified. While waiting you don’t have any other thing to do order than to keep checking if your application is verified.
5. Generate Your Availability Code For Your Business
The availability code is the code that’s used to register your business name. The code is generated by the CAC along with your name approval for your business sent in your email.
All you have to do is to ensure you have received the email and take note of the code and the business name.
6. Registration of your Company
To register your company you need to login into the website of the CAC and select company registration which is found on the menu bar.
You can follow these steps for an easy guide:
Select here or https://pre.cac.gov.ng/login so that you can log in to your CAC account.
Once you have a login to your account, select the “Company Registration” option.
Once you have arrived on the next page you will find the “You have no company registration” option, Select it and Register a company using your availability code.
Input your business availability code in the form where the new company registration is stated.
A result would be shown which will contain your business name and personal information.
You will be needed to fill in this section as the same as registering your business name.
- Your Presenter details
- Your Business details
- Nature of your business
- Required Documents
- Reviewing your application
- Make Payment
Just as you did on the business name Registration you are required to pay with Remita, you also need to generate and print your receipt after making a successful payment.
10,000 naira would be a charge for Registering your business name.
Get your Business Certification
Once you have summited your application you will have to keep checking the CAC website to see if your application has been approved.
When approved an email would be sent to you on where to collect your documents.
This location would be the CAC beach where you chose when registering your company.
Hope this article has helped you on How To Register A Business Name In Nigeria online By Yourself, note that you don’t need to pay extra fees when you are not using third parties follow the step on How To Register A Business Name In Nigeria online By Yourself carefully and your business name registration would be done.
Also, read How to send money abroad 6 easy ways
Nigeria: Federal Govt Sets Up 14-Man Committee to Manage Petroleum Products Supply, Distribution
In a move to find lasting solution to the disruptions in the supply and distribution of petroleum products in the country, President Muhammadu Buhari has approved the constitution of a 14-man Steering Committee on Petroleum Products Supply and Distribution management, which he will personally chair, the ministry of petroleum resources announced yesterday.
The Steering Committee, which has minister of state for Petroleum Resource, Chief Timipre Sylva as alternate chairman is expected to among other things to ensure transparent and efficient supply and distribution of petroleum products across the country.
Other terms of reference are to ensure national strategic stock management, visibility on the NNPC Limited refineries rehabilitation programme and ensure end-end tracking of petroleum products, especial PMS to ascertain daily national consumption and eliminate smuggling.
To further ensure sanity in the supply and distribution across the value chain, Sylva has directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure strict compliance with the government approved ex-depot and retail prices for PMS.
The minister has further directed the NMDPRA to ensure that NNPC Limited, which is the supplier of last resort meets the domestic supply obligation of PMS and other petroleum products in the country.
He further directed that the interests of the ordinary Nigerian is protected from price exploitation on other deregulated products such as AGO and DPK and LPG.
The federal government will not allow misguided elements to bring untold hardship upon the citizenry and attempt to discredit government’s efforts in consolidating the gains made thus far in the oil and gas sector of the economy.
Other members of the committee are minister of Finance, permanent secretary, Ministry of Petroleum Resources, National Economic Adviser to the President, director-general, Department of State Services (DSS), comptroller-general, Nigerian Customs Service (NCS), chairman, Economic and Financial Crimes Commission Member (EFCC), and commandant-general, Nigerian Security and Civil Defence Corps (NSCDC)
Others who made up the Steering Committee are Authority chief executive, Nigerian Midstream and Member Downstream Petroleum Regulatory Authority (NMDPRA), governor, Central Bank of Nigeria (CBN), group chief executive officer, NNPC Limited, Special Advisor (Special Duties) to the HMSPR while the Technical Advisor (Midstream) to the HMSPR will serve as Secretary.
Nigeria: Inside the Multi-Million-Dollar Business Dispute Between Emefiele and ‘Brother-in-Law’
John Omoile, who is demanding $36 million in damages, accuses Mr Emefiele of breach of contract, fraudulent inducement, negligent representation and fraud.
The governor of Nigeria’s central bank, Godwin Emefiele, is embroiled in a multi-million-dollar legal battle that has torn apart a once close family relationship. The legal tussle is separate from the troubles he faces over the handling of his job.
Mr Emefiele recently sneaked out and back to the country to avert the possibility of arrest by the State Security Service (SSS) who accuse him of financing terrorism.
He faces growing criticisms over the policies of the Central Bank of Nigeria (CBN) often blamed for some of the nation’s economic woes and the scarcity of newly introduced currency notes just days before the deadline it set for phasing out the old notes.
As all of these happen, Mr Emefiele quietly grapples with a long-running feud which climaxed in a $36 million suit filed against him by a brother-in-law, John Omoile, in faraway Texas, the United States of America, in 2021.
The legal duel between Mr Emefiele and Mr Omoile is still on at the US District Court in the Northern Texas District.
Mr Omoile is demanding $36 million in damages for the losses he allegedly suffered as a result of the CBN governor’s alleged breach of contract, fraudulent inducement, negligent representation and fraud in course of their business partnerships.
Apart from tearing apart a familial relationship, the feud has defied the larger family’s interventions, recorded a violation of a settlement agreement, and pitted lawyers engaged by both sides in the US against themselves.
The case has passed through at least five Texas law firms apart from the Nigerian lawyers keeping watch over the Nigerian end of the battle on behalf of the warring parties.
With the case just starting in court for the third time, Mr Omoile has indicated it will cost him $200,000 in attorney’s fees.
Mr Emefiele, too, has complained to the court that it will be extraordinarily burdensome for him to defend himself in the US, where he does not reside.
He has urged the court to dismiss the suit and hold that Nigeria is the appropriate jurisdiction to pursue the case, for reasons including the fact that the settlement agreement which covered all the issues between him and Mr Omoile was signed in Nigeria in 2014.
Background: Emefiele Vs Omoile
Mr Emefiele’s wife, Margaret, and John Omoile, a dual citizen of Nigeria and the US, are cousins raised in their teenage years by an aunt in Agbor, Delta State, South-south Nigeria, according to documents filed in court.
The bond between them was so strong that they regarded each other as siblings. When Margaret got married to Mr Emefiele, the CBN governor had no difficulty regarding Mr Omoile as his brother-in-law.
Court documents described in compelling detail the rosy past of their family relationship.
Mr Emefiele visited and stayed with Mr Omoile’s family in Texas, US, during some of his vacations. He described how he lavished Mr Omoile with gifts, money, and business opportunities over the years.
Also remembering their once affectionate family relationship, Mr Omoile said of how they “shared homes, spent holidays and family gatherings together, have been close family friends, and as detailed below, became business partners/joint venturers.”
Mr Omoile, on different occasions, helped the Emefieles to buy houses in his neighbourhood in Coppell, Texas.
Drawing from the familial bond, mutual trust and goodwill they had built in each other for decades, their rapport flourished and grew into a business partnership in 2004.
They sent funds to each other for personal investments and joint ventures in Nigeria and in the US.
But in the unsavoury turn of events, the previously trusted relatives now accuse each other of fraud, greed, deception, and extortion. The CBN governor, who vehemently denied wrongdoing, said the suit currently “is simply another attempt to extort $36 million” from him.
Zenith Bank stock investments
In 2004, Mr Omoile said he paid Mr Emefiele $50,000 for the purchase of an Initial Public Offering (IPO) investment in Zenith Bank in Nigeria, where Mr Emefiele was then an official.
In 2007, Mr Omoile received 200,000 additional shares from Mr Emefiele as a gift.
Mr Emefiele became the managing director of Zenith Bank in 2010 and the governor of the CBN in 2014.
Mr Omoile said he often raised questions but has yet to get an answer about the wide range of issues, including dividends issued, but not paid, the prices at which certain stock shares were supposedly acquired for him, “and the prices at which Defendant Emefiele actually acquired the shares.”
He accused Mr Emefile of continuing to “use his position as former Managing Director and current Governor of the Bank of Nigeria to actively prevent Plaintiff Omoile from getting a full and accurate accounting for his shares.”
Mr Emefiele and a contentious oil and gas partnership
In a related development, Mr Omoile recalled that in 2007, he, Mr Emefiele and one Pius Oyibo signed a tripartite agreement in Coppell, Texas, to form an oil and gas company on 7 December 2007. The proposed firm, called Noka Energy Nigeria Limited, was to buy, sell and transport petroleum products in Nigeria.
Mr Omoile recalled that he made several trips and several contacts on behalf of the partnership to Houston, the Caribbean, and Nigeria to meet with oil and gas executives.
He recalled Mr Emefiele’s investment into the venture to include $200,000 sent to him for the purchase of 10 truck heads from LKQ in Houston for the partnership.
He said he bought the truck heads, the number not specified, and shipped them to Nigeria, for the business.
He said he would later discover that Mr Emefiele did not incorporate Noka Energy Nigeria Limited as agreed, but instead formed Dummies Oil and Gas for himself.
Real estate business
In 2006, while the other business discussions between them were going on, they formed a partnership called Rosewood Malcom LLC which would buy, sell and develop real estate properties in the US.
The business plan, according to Mr Omoile, included him taking mortgages in his name for the benefit of the joint venture.
He said profit and loss were to be shared equally between the partners, but that that was not the case eventually.
He said once the joint venture started, profits were shared, however, losses were left for him to bear.
According to him, the venture acquired a property at 7026 W. 43rd Street, Houston Texas, for $141,000.
He also said he took a personal mortgage in his name for $167,000 from Wachovia Bank.
He recalled that as the properties’ market value crashed during the US economic meltdown between 2008 and 2009, he continued to be responsible for the substantial financial burden of mortgage servicing without any help or assistance from Mr Emefiele.
He added that he purchased a property in 2008 in Coppell with $360,000 sent by Mr Emefiele.
But he said he was bearing the tax liabilities on the properties from his personal business accounts. According to him, the total personal loss he incurred for the real estate partnership and out-of-pocket expenses meant to be paid by Mr Emefiele was at least $500,000.
Mr Emefiele offers defence
Mr Emefiele has yet to formally file a defence to the suit, but his side of the story can be gleaned from the troves of documents he attached as exhibits to his preliminary court filings.
In a letter dated 17 January 2022, Mr Emefiele’s lawyer, Nitor Egbarin, denied the allegations raised in previous ‘legal demand’ letters which Mr Omoile’s lawyer, Donald Kaiser Jr, sent directly to the CBN governor.
In the strongly-worded letter, Mr Egbarin said his client was not involved in the management of Mr Omoile’s Zenith Bank’s shares and could not have blocked access to the records of the investments.
He said the fact that Mr Omoile used the CBN governor’s business address as his contact address for receiving his brokerage account statement “is not a proof that my client had legal responsibility for managing John’s money in the brokerage account.”
He said his client is no longer the Managing director of Zenith Bank and is not Mr Omoile’s stockbroker.
“Your legal demand must be directed at John to provide you with his Zenith Bank accounts which he opened in Agbor and in Lagos. Proceeds from John’s brokerage account are deposited into John’s bank accounts in Lagos and in Agbor,” the letter read in part.
Also denying his client’s alleged breach of financial obligation to their real estate venture, Mr Egbarin went down memory lane, highlighting Mr Emefiele’s investments in the venture and financial assistance he had rendered to Mr Omoile.
He recalled that in 2006, Mr Omoile took out $200,000, using a pre-signed cheque, from Mr Emefiele’s bank account, and never accounted for the money meant to be used for estate development in Houston.
He said instead of using the money to develop the Houston property, Mr Omoile and his wife, on 17 January 2007, took out a $167,650 construction mortgage with Wachovia Mortgage.
He also recalled Mr Emefiele sent another $40,000 to Mr Omoile in 2009 for the purchase of a second real estate property on the plot next to the first property in Houston.
Tired of the frustrations from the investments, Mr Emefiele, according to his lawyer, decided to stop providing financial support to Mr Omoile in 2012.
But, the lawyer said, with a settlement agreement the brothers-in-law singed on 26 April 2014, Mr Emefiele agreed to relinquish all his rights in the two properties in Houston to Mr Omoile valued at over $207,650.
He said Mr Emefiele also paid off the Wachovia Mortgage balance of about $155,000.
He said the CBN governor also sent $250,000 requested by Mr Omoile to clear unpaid income tax in 2020.
He said, from 2006 to 2020, Mr Omoile had received at least $645,000 in cash in financial support from Mr Emefiele.
But he did not address the issue of the failed oil and gas business plan.
‘No more free food’
Mr Egbarin’s letter went beyond defending his client. It was an unsparing frenzied personal attack on Mr Omoile and his lawyer.
The letter describes Mr Emefiele as “a wealthy banker” and former chief executive officer of “the largest bank in Nigeria and West Africa” who has been “a generous donor, benefactor and breadwinner” to Mr Omoile over the years.
The CBN governor, according to the letter, “took care of John (Mr Omoile) as one would do of a brother-in-law,” providing “financial support to John and his wife and his children over the years.”
In a rather demeaning manner highlighting how much the relationship between the in-laws has soured, Mr Egbarin said his client was no longer prepared to continue to feed Mr Omoile. “You should advise John that my client does not wish to continue to feed him. John should pursue other means to make a living rather than continue to shakedown my client for more financial support.”
Turning on Mr Kaiser, Mr Egbarin accused him of incompetence and of having little understanding of the area of law he was handling for Mr Omoile.
He also accused the lawyer of making false claims about Mr Emefiele and of unethical practice by bypassing him to write directly to the CBN governor.
He said Mr Emefiele, on becoming the CBN governor, became a target for a lawsuit in Nigeria engaged by Mr Omoile for “harassment demanding monies for matters that had been settled in the 2014 Settlement Agreement.”
He said the letters of demand sent severally to Mr Emefiele to account for Mr Omoile’s shares is “an attempt to shakedown/extort my client for money.”
He ended the letter with a devastating salvo to Mr Omoile. “Finally, there is still nothing more my client will do for John. The gravy train has come to a stop.”
Members of the larger family called a series of peace meetings attended by the brothers-in-law to settle their disputes.
The meetings were held in Nigeria. Some of the meetings were also held via Zoom.
They finally reached an agreement in 2014.
With the hope of getting “relief from the mounting debts” resulting from the real estate losses since 2007, Mr Omile said, he signed the agreement with Mr Emefiele on 26 April 2014.
But both sides have accused each other of violating the agreements.
The family also again called a series of Zoom meetings to resolve the disputes in April 2020.
But in what would be the last straw, according to Mr Omoile, Mr Emefiele declared through his wife, Margaret, who represented him at one of the Zoom meetings, that there was never an intention to form and operate a joint oil and gas firm.
Mr Omoile said he realised then that he had been “induced with false statements and promises” to enter into a partnership with Mr Emefiele. He also said he realised that Mr Emefiele “never intended to follow through with his past promises”.
Unending Legal battle: Emefiele Vs Omoile
With settlement talks over, Mr Omoile took the decision to sue Mr Emefiele after the Zoom meetings in 2020.
In July 2021, he hired a Texas attorney, Kenneth Onyenah, who filed the suit claiming economic and actual damages against Mr Emefiele for the losses he allegedly incurred as a result of the CBN governor’s alleged failure to fulfil his financial obligations to him and their joint ventures.
He filed the suit at the US District Court of the Northern District of Texas.
But shortly after the filing, the lawyer withdrew the suit.
Mr Omoile said the lawyer withdrew the suit without prior communication or his authority in August 2021.
He added that the lawyer took the step after he was threatened by Mr Emefiele’s lawyer, Mr Egbarin. But Mr Egbarin said the lawyer withdrew the case after realising it had no merit.
Later in 2021, Mr Omoile hired Donald Kaiser Jr. to reopen the case.
On 12 May 2022, Mr Kaiser refiled the suit at the 68th Judicial District Court in Dallas County, Texas.
But following Mr Emefiele’s objection, the suit was removed from the state court “on the basis of diversity jurisdiction” to a federal court, the US District Court of the Northern District of Texas.
A new lawyer named Ewomazino Magbegor is now representing Mr Emefiele following the refiling of the case.
Mr Magbebor is the second lawyer known on record to have defended the CBN governor in the matter in the US. From Mr Egbarin’s letter, the plaintiff, Mr Omoile, has engaged at least three lawyers in respect of the case.
Mr Emefiele’s new lawyer, in November 2022, filed an application to challenge the service of the suit on the CBN governor through substituted means. He also sought the dismissal of the suit on the grounds that the court lacked jurisdiction on the matter.
The court’s decision on the application will determine the future of the case.
Advertising Market Leaders Give 5 Marketing Musts for 2023
Learn from your experiencesPerhaps the final word goes to Soyoung Kang, chief marketing officer at beauty brand eos. As marketers start to think about the trends that will define their 2023, she urged them to also remember the lessons of the last few years. “As we try to understand how to navigate this macroeconomic climate, it’s really important for us as marketers to continue to push forward,” she said. “We have to stay agile. We’ve built all of these muscles during the pandemic where we needed to be able to shift investments as circumstances changed. It’s time to exercise those muscles again.”
How to Start a Cocoa Business in Nigeria and Make Money From It
People born between the ’60s and ’80s would definitely know the value of cocoa production in Nigeria. Cocoa is a crop Nigeria once banked on as its major exported cash crops before the oil boom. Nigeria was the biggest exporter of cocoa in Africa and one of the biggest in the world. Then Crude Oil came and poor agricultural management set in, costing the Nigerian economy badly and allowing Nigerian to lose the prestigious spot to a fellow African country, Cote d’Ivoire, who is now the largest cocoa producer in the world, followed by Indonesia.
When cocoa production and export are concerned, Nigeria only lives in past glory and if care is not taken, Nigeria might end up losing all it has gained from the export of what is touted as some farmers as the ‘Wealth Seed.’ The demand for Cocoa now is significantly higher than what the demand was, back then. When the agricultural spotlight is focused on Nigeria, foreign countries can vividly see the potentials in Nigeria and would quickly act fast in taking advantage of it, while Nigerians sit on a goldmine and yet they can’t see it but only look forward to foreign aid and investments.
Anyone looking to delve into Cocoa production business in Nigeria is in for a bit of a fortune if he really knows his onions. For a long time, Cocoa has been and would for a really long time still be one of the fastest-selling agricultural products in both the international market and the local market. As stated earlier, there is a high prospect for cocoa business to thrive in the country. This is because it is in high demand all over the world as it is used in the manufacture of different things such as candy bars, chocolate, cocoa powder as well as drinks and several others. Cocoa farming and beans extraction are labour intensive and the beans are fragile. This pushes many people from the business, especially in a country like Nigeria where there are deficiencies of preservative facilities.
Although Cocoa is not the easiest of crops to manage, once a potential merchant can sacrifice the time and the effort to have it planted, groomed and nurtured to its full maturity, he can keep getting attractive returns on it for a time as long as decades. Truth be told, cocoa production in Nigeria is one very under-exploited and under-utilised sector and Nigeria still needs as many farmers in the cocoa production section as possible, since demand continues to outweigh supply. There are still thousands of acres of fertile lands that can still be used for the planting and cultivation of cocoa. Just like any other business, a potential Cocoa merchant must have a well-designed business plan that will guide the cocoa business. This means that he must first sit down and work out things involved in the cocoa business and have a road map on how to go about it.
Delving into Cocoa Farming and Production
Starting the cocoa farming and production business in Nigeria isn’t as hard as it seems, especially if one can endeavour to gather the right information and knowledge about the business. Armed with the right knowledge on cocoa farming, botany, industrial value and demand chain, a potential cocoa merchant can be able to utilise and exploit the huge profits associated with the business, and with time he might soon become a big player in the cocoa production business.
It is also worthy to note that the returns on cocoa business start small but grows on bigger and bigger with time and the right amount of effort.
The first major step in delving into Cocoa Farming and production is Financial Planning
Anyone who has an interests in cocoa cultivation must first work out the different costs. Different costs are involved and fundraising for the business is also important. Furthermore, research has shown that cocoa can grow together with other cash crops like Coconut and Cashew so combining the production strategies is a good way to maximise profits.
Capital also plays a large role in the kick-off of this business. A potential merchant has to decide if he would be going into Cocoa cultivation large scale or small scale. This decision would influence the amount of capital he would be investing in the business. This is why a good Business plan goes a long way in determining the success rate of the cocoa cultivation business.
Other things needed are:
- Piece of Land: If the merchant wants to see through his business from start to finish, he would unavoidably need an area of land to start his cocoa business, but it all depends on what he can afford. For a small scale business, he doesn’t necessarily have to get farmland, as he can simply buy fresh cocoa seeds from farmers who’ll sell it at a much lesser price.
- Storage and Drying Space: The merchant would inevitably need to have a store or warehouse, secure enough to give his business (the cocoa seeds) the required safekeeping it needs. His business is his cocoa seeds, as he has no business with the pods. Also, the store needs to have enough space outdoors for him to spread his seeds. Cocoa seeds need to be dried in the sun for it to be usable. The drying period normally takes a period of two weeks.
- Relevant Equipment: The merchant would need equipment like the scale for weighing the bags, normal sacks and heavy-duty sacks, for conveying the seeds from one place to another, and a wide water-proof material that can be used in drying the seeds in open air.
- Cocoa Seeds: There goes the tiny but most integral part of the business. The cocoa seeds can either be bought from cocoa farmers or harvested if the merchant already has access to a cocoa farm, an option which is advisable later in his business when you have the money.
Cocoa is a crop that cannot do well in all kinds of soil. This means that before a potential merchant commences the business, he must test the soil to determine the type of yield he would be able to attain during harvest season.
Crop protection and nutrient management are also important in this kind of business. Cocoa is known to grow well in some parts of Nigeria, especially the western part of Nigeria. One can consider acquiring land in any of these places to grow cocoa.
The Type of Cocoa Variety to Invest in
Another aspect a prospective merchant will pay attention to is the best variety to plant. This is that the reason soil test will help him discover the types of cocoa species that are compatible with a particular soil or environment.
There are at least three varieties on the market and they include the Trinitario, Forastero, as well as the Criollo. Apart from that, there are also some improved varieties, which can be gotten from other parts of the world, and these can do well in Nigeria.
Method of Propagation
When it comes to Cocoa cultivation, there are two options available to the merchant, which include the Vegetative and Seed propagation. A lot of people prefer Seed propagation because it seems to grow faster than the Vegetative propagation. Germinations starts within a week of propagation and moreover, a greater percentage of it can germinate (at least ninety per cent or more of the seed). The survival rate is higher in seed than in vegetative propagation.
Also, this stage is where the main business starts. A Cocoa merchant can also engage in mass production of cocoa after the seeds have germinated, he can transplant them using a perforated polythene bag. He can also sell some of the seedlings. Other merchants who deal in Cocoa seedlings will like to buy it.
On the other hand, many large-scale producers prefer the Vegetative option than the seedling option. Vegetation is grown through such methods like grafting, root cuttings, as well as stem budding and so on. In Nigeria, many cocoa farmers prefer the budding option.
When it comes to planting, the merchant has to be careful the way he plants it to ensure that it survives. If after testing the soil and he discovers that it is not that fertile, there are still other alternatives. He would have to dig a pit of about 50 by 50 by 50 centimetres. This advice is very important if he resides in the lateritic zones where the soil is known to be low fertile.
After digging the holes, he must make a soil combination of organic manure and topsoil and fill the pit with it. This is to enhance the survival rate. Those in fertile areas have nothing to worry about.
It is always recommended to plant it on a soil surface. The cocoa root grows well in surfaces irrespective of the depth.
There are a few must-dos that attract a bumper cocoa harvest, time and resources are of the essence when taking care of the cocoa. Once the planting is finished, the next thing to do is to mulch the basins using organic manure.
Shoots emerging from the lower portions must be removed. This is to ensure healthy development and growth of the shoot. The planting can last three to four years, but the process always has to be weed-free.
Fertilisation and Manure
The essence of the soil test is to determine soil fertility. This can equally assist in determining the right type of manure to apply. In Nigeria, NPK fertilizers are popular and this can be applied in two equal splits.
The dose to apply depends on the yield wanted. For species that yield up to sixty pods yearly, the dose must be doubled.
In addition to that, the merchant can administer dolomite to each plant yearly. This can start from the third year of the cocoa plantation. The best method to administer fertilizer to the cocoa crops is to mix fertilizer with soil in a basin and administer it to the plant.
The cocoa plant requires pruning and it grows in tiers. If properly managed, the plant can produce five fan branches. It is better if the growth is restricted just to one-tier. Because of that, there is the need for constant pruning.
Irrigation is necessary if there is no adequate rainfall distribution. Naturally, it grows well under well water. Supplemental irrigation is a necessity if the merchant stay in areas where there is no adequate water supply. Water is necessary because it helps cocoa plants to grow very well and makes the yield better.
Cocoa like other cash crops needs to be protected from diseases, pests, and vagaries of nature. The most important thing is to protect them from those harmful insects and pests around. There must be an adequate arrangement for chemical spraying and other ways of protecting it.
This is the time to yield the benefits of labour. It takes about one hundred and seventy days for the cocoa to be ready for harvesting. After harvesting the pods, the merchant can store it for four days. This facilitates fermentation. Furthermore, it makes superior quality cocoa beans possible. The pods should not be overripe before harvesting.
There are two harvesting seasons in a year; light and heavy harvest.
After harvesting, it is time for fermentation. With a good cocoa processing unit, the merchant is sure of producing different varieties of cocoa beans.
Marketing and Export
The target markets are food and beverage companies, soap making industries, chocolate producing companies etc. A ton of cocoa seeds is sold between $2195 – $3130 in the International market. Locally cocoa has a standard price of 50kg selling for ₦55,000.
There are a variety of ways that cocoa is exported from Nigeria. In some cases, one or even two middlemen are involved between the Nigerian farmers and cocoa exporters. The Nigerian trade begins with farmers working to harvest cocoa beans from the local crop. The following are ways in which cocoa beans are exported from Nigeria:
- Farmers to Small Buyers – Small buyers visit individual clients (farms) to purchase a share of the cocoa crop. In this method, small buyers may sell the crop directly to exporters, but more commonly the small buyers sell the cocoa to wholesale buyers who make the final sell to exporters.
- Farmers to Co-operatives – Farmer co-ops combine cocoa from several farms to sell to different agencies. The co-op purchases cocoa directly from farmers, and in some cases, sells it to exporters directly. In other cases, the co-op may also export the product directly.
Nearly half of all Cocoa in Nigeria is exported to the Netherlands (45%). Germany and Malaysia are ranked second and third in cocoa imports from Nigeria, importing 22% and 6.2% of Nigeria’s cocoa output, respectively. Other top importers of Nigerian cocoa include Spain, Italy, Belgium-Luxembourg, and China.
Nigerian cocoa and cocoa beans are usually exported in the raw or unprocessed form to chocolate processing plants in these countries. The cocoa is typically exported to confectionary companies to make chocolate bars and other chocolate products, such as candy, cakes, and chocolate beverages.
List of Cocoa Exporters in Nigeria
The International Cocoa Organization (ICCO) based in Ivory Coast maintains a directory of farmers, exporters, and other professionals related to the cocoa industry. Although Nigeria was a member in 2010, the country is not listed among the organisation’s members in 2018.
Cocoa Exporters in Nigeria
The list of cocoa exporters in Nigeria include:
- FTN Cocoa Processors Plc
- Ideal Risku Global Limited
- Saro Agro-Allied
- Tosmega Cocoa Nigeria Limited
- Akeen and Kamoru Nigeria Ltd
- Berveek Limited
- Cocoa Products (Ile Oluji) Ltd
- Remedy Crown Investment
- Shinwillcrown Cocoa Producing Company
The list of cocoa bean exporters of bulk and wholesale cocoa beans from Nigeria include:
- Agro traders Ltd
- Crystal Green Ltd
- Gbemtan Investment Ltd
- Olatunde International Ltd
- Agebelere Cocoa Farm
- Okon & Sons Integrated Services Ltd
- Ose Global Bizness Links Nig. Ltd.
- Terry Cocoa Merchant
- Yinka Akintilo Enterprises Ltd
Cocoa Production in Nigeria: Feasibility Study
The feasibility study included in this guide is for a medium cocoa production business, from the start to the sale of 500 bags of cocoa. The Capital covers from store set-up, land acquisition, seed purchase, production, and marketing.
The selling price of cocoa is the same almost everywhere. Each bag (A standard of 50 Kg) is being sold for about ₦55,000.
For a start, all the materials needed (Renting a store depends on location, purchase of needed equipment, planting and tendering, and so on, is approximately ₦3,500,000)
If the merchant starts harvesting after 18 months, (he can start harvesting as soon as that if he had planted the early-maturing, high-yielding and disease-resistant cocoa beans seed to boost his farm’s production in a short period of time).
₦55,000 X 500 = ₦27,500,000
(Return on Investment) ROI = ₦27,500,000 – ₦3,500,000 After 18 months of cultivation, the gain is a staggering ₦24,000,000; which isn’t bad at all especially since selling cocoa beans seed doesn’t take much marketing.
Issues Affecting Cocoa Export in Nigeria
Before you engage in the cocoa trade in Nigeria, it’s important to consider how to overcome common challenges affecting the cocoa trade and cocoa exporters in Africa. These concerns include everything from adequate production to transportation. Educating yourself on these issues may not eliminate the concern, but can help you determine a plan of action before engaging in trade.
- Roads and Transport – More than 30,000 tons of cocoa were found delayed in transit in the capital city of Lagos while en route to ports for export. Specifically, traffic, craters, and floods are to blame for the delay. This delay put strain on local businesses and some even sought loans to cover expenses while waiting for exports to be shipped and paid by buyers.
- Delays in cocoa production – For many years, Nigeria ranked fourth behind Ivory Coast, Ghana, and Indonesia in cocoa production, but a recent drop in production has lowered Nigeria’s position in the cocoa production chain to fifth, tied with Cameroon. Lack of support for farmers, including access to cocoa seedlings, price risk management, and pest control training are just a few factors that have led to a decrease in cocoa production. Many small farms harvest most cocoa in Nigeria throughout the southern region.
- Lack of farmers – Several news reports outline both the lack of younger farmers and the lack of interest of younger farmers in cocoa farming. This lack of interest has led to a decrease in the number of cocoa farmers. While there have been calls to stimulate the cocoa economy, the Nigerian cocoa production efforts faces significant challenges to its growth if enough young farmers don’t participate in the cocoa trade.
COCOA PRODUCTION: RISKS INVOLVED
- Managing a cocoa farm takes time, effort, patience and energy.
- Constant guard and protective measure against rodents and infectious parasites.
- Setting up a cocoa production plant is very capital intensive.
COCOA PRODUCTION: ADVANTAGES
- Cocoa sells faster than almost every other agricultural produce.
- The merchant would inadvertently be contributing to the nations GDP.
- A lot of beverage companies rely on cocoa for production, making it very profitable.
- As a young person, you can leave the circle of the unemployed.
- The ROI from cocoa and production is very attractive and is enough compensation for the merchant’s time, energy and money.
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