Gum Arabic Export

Description

Nigeria, like many African countries, exports crude gum arabic at low prices but re-imports processed gum at substantially higher prices to meet local manufacturing demand. This paradox offers huge investment potential for investors willing to process and sell, as just one or two companies are doing that in the country at the moment.

Any nation that requires economic development must look inwards to identify areas where it has a comparative advantage over other nations and seek to develop these areas.

Apart from hydrocarbon, Nigeria has comparative advantages in the Agricultural sector, where a variety of products are produced due to the favorable climatic conditions, good soil conditions, and the fact that over 70% of the entire landmass of the country is arable.

Nigeria has a comparative advantage in the production and export of gum arabic in Africa over its counterparts due to the large arable land available for production and conducive climatic conditions.

Presently, Nigeria is the second-largest producer and exporter of gum arabic in the world, and we here seek to expose the investment opportunity in the export of the product through this feasibility guide on the export of gum arabic.

Though the second leading exporting nation for Gum Arabic in the world, Nigeria is yet to take advantage of the vast opportunity that exists in the export and value addition of Gum Arabic.

Gum Arabic is used as a thickener, suspender, emulsifier, stabilizer, flavor carrier, binder, and encapsulating material, and there is a constant need for the product.

The return on investment on the export of Gum Arabic is estimated between 40%- 55%.