- 1.6m bags of onions traded informally per year
Onome Amuge
Nigeria’s agricultural sector boasts a quiet giant in onion production. Ranked as the seventh-largest producer globally and the second-largest in Africa, the most populous African nation produces approximately two million metric tonnes of onion, a fact affirmed by the National Onion Producers, Processors and Marketers Association of Nigeria (NOPPMAN).
The crop is grown mainly in the northern states of Kano, Sokoto, Jigawa, Plateau, Bauchi, and Kebbi. These regions, blessed with a conducive dry season and expanding irrigation infrastructure, provide fertile ground for onion cultivation, with Sokoto emerging as the largest producing state, due to its particularly favourable climate.
Onion is globally renowned as a culinary cornerstone where it stands as one of the most consumed vegetables. It forms an indispensable ingredient in various dishes, from the most traditional local stews to continental delicacies.
Beyond its culinary appeal, the crop offers an array of health benefits. As highlighted by medical information websites like Healthline.com, onions are not only a rich source of essential vitamins such as C and B6, alongside potassium, manganese, and fibre, but they also harbour potent antioxidants and anti-inflammatory compounds. Emerging research suggests these natural components may play a crucial role in reducing triglycerides and lowering cholesterol levels, thereby potentially mitigating the risk of cardiovascular diseases, fueling a consistent demand for onions across Nigeria.
The global onion market reflects this widespread demand, with EastFruit, a prominent information and analytics platform for the vegetable and horticulture sectors, identifying onions as one of the most actively traded vegetables worldwide.
Also, data from the Observatory of Economic Complexity (OEC), a leading data visualisation tool for international trade, reveals that the global trade in onions reached $8.75 billion in 2023, representing an 18.1 per cent increase from the $7.4 billion recorded in 2022, indicating a strong and sustained upward trend. According to the OEC, the global onion trade has expanded at an annualised rate of 8.22 per cent over the past five years, reflecting its growing commercial importance on the world stage.
However, beneath Nigeria’s significant production statistics, a largely undocumented informal cross-border trade is seen to have severely underrepresented the nation’s true export capacity and potential economic impact.
The Nigeria Export Promotion Council (NEPC) has brought this hidden economic activity into focus recently, revealing that an estimated 1.6 million bags of Nigerian onions are traded informally with neighbouring countries annually. These transactions, it stated, bypass official export channels and, consequently, are entirely absent from Nigeria’s formal trade statistics, creating a distorted picture of the sector’s contribution to the national economy.
Nonye Ayeni, the executive director/CEO of the NEPC, citing data from NOPPMAN, spoke on the scale and scope of this informal trade network.
According to Ayeni, Nigerian onions flow across the nation’s porous land borders into markets in Ghana, Côte d’Ivoire, Benin Republic, Cameroon, Congo, and Niger Republic. Despite the considerable volumes involved, these transactions remain unrecorded in official trade data.
“Existing trade data primarily capture activities within the formal sector, offering limited visibility into informal export trade transactions, despite their significant volume and economic impact,” Ayeni stated.
She pointed out that while Nigeria’s formal export records for 2024 indicate 7.291 million metric tonnes of non-oil products valued at $5.456 billion, this figure completely excludes the substantial contributions emanating from the informal trade segment, effectively masking a significant portion of the nation’s trade activity.
Ayeni emphasised that this informal trade is far from a negligible sideline. Instead, it constitutes a vital and integral part of Nigeria’s trade reality, providing essential livelihoods for countless individuals, strengthening regional supply chains, and contributing meaningfully, albeit invisibly in official statistics, to the national economy.
“Informal export trade represents millions of dollars in goods and services that have remained largely outside our official records,” she asserted.
Ayeni noted that the failure to accurately account for the factual onion trade volume not only understates the true economic contribution of the onion sector but also hinders the formulation of effective trade policies, potentially limiting access to financing, infrastructure development, and other crucial support mechanisms for the actors involved.
NEPC, NBS in partnership to capture export data
In a decisive move to address the data gap in the onion market, the NEPC and the National Bureau of Statistics (NBS) recently entered into a partnership, formalised through the signing of a Memorandum of Understanding (MoU). The collaborative effort aims to establish a systematic framework for capturing comprehensive data on informal cross-border trade activities across Nigeria.
Speaking at the MoU signing ceremony in Abuja, Ayeni hailed the partnership as a strategic turning point in Nigeria’s ongoing efforts to strengthen its non-oil exports by formally acknowledging and recording the significant value of trade within the informal sector.
According to both organisations, the agreement is specifically designed to create the necessary infrastructure and methodologies for accurately capturing data from Nigeria’s extensive informal cross-border trade sector, a segment that has long remained statistically opaque.
Ayeni described the MoU as a targeted intervention strategically designed to rectify the existing imbalance by ensuring the capture of the full spectrum of Nigeria’s export activity, including the vital informal trade flows that are essential for bringing about inclusive economic growth.
She argued that by bringing this previously unrecorded trade into the statistical purview, policymakers will gain a more accurate understanding of the nation’s economic dynamism, enabling them to formulate more effective and targeted interventions to support and potentially formalise these crucial economic activities.
Echoing the importance of the collaboration, Adeyemi Adeniran, the statistician general of the federation, described the partnership as a critical response to one of the most pressing gaps in Nigeria’s trade data architecture.
He explained further that the signing of the MoU demonstrates the strong spirit of collaboration required to tackle the persistent challenge of capturing and integrating data from informal trade and trade in services into the national statistical system.
Adeniran cautioned that the continued failure to account for informal trade data undermines the integrity of key macroeconomic indicators and weakens the very foundation upon which evidence-based policymaking rests.
“Traditional trade statistics have focused on formal, large-scale transactions while overlooking the vibrancy of informal trade routes. This must be corrected if we are to align our economic statistics with reality,” he asserted.
Adeniran further discussed the significant role of informal trade within the broader Sub-Saharan African context, noting that it accounts for about 20 to 40 per cent of intra-African commerce. He added that given its extensive land borders and well-established regional trading networks, Nigeria plays a central role in this informal trade landscape.
The collaboration between the NEPC and the NBS, according to Adeniran, presents a timely and crucial opportunity to build essential institutional capacity, develop more sophisticated and effective data strategies, and provide support for the gradual formalisation of the informal sector.
He noted that the accurate capture of this previously undocumented trade data would not only enhance the reliability and comprehensiveness of Nigeria’s economic statistics but also facilitate the formulation of more effective food security policies, enable more accurate monitoring of regional integration initiatives, and allow for the provision of targeted support to the numerous small businesses that often form the backbone of these informal trade networks.
“This initiative will position Nigeria as a regional leader in trade statistics. It will help us identify new economic opportunities and foster inclusive economic growth by bringing visibility to previously undocumented trade,” he added.
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