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How Over $100 Billion Dollar Halal Market Can Grow the Nigerian Economy

With an estimated valuation of 6.3 trillion dollars, the halal market is one of the global markets with the greatest rate of growth. According to experts, the worldwide halal sector is growing at an impressive rate and might expand by 20% a year. Additionally, despite the COVID-19 epidemic, the global sales of halal goods and services in 2020–2021 were $2 trillion each. The Nigerian Economy will continue to benefit from this growing sector.

The global Halal market and the Nigerian economy encompass food, cosmetics, pharmaceuticals, supply chain management, media and creativity, and fashion to cater to the demands of both Muslims and non-Muslims. The Arabic word “halal,” which in Islam means “lawful or permissible,” refers to all aspects of daily life, not just food and drink. Globally, the superior quality of Halal food and other items draws in a diverse range of customers.  Individuals of any faith, gender, ethnicity, country, race, or age are welcome to consume “Halal” food and adopt a “Halal” lifestyle.

However, offering Halal certified products allows Muslim consumers to be confident that the products they use are in alignment with their culture and beliefs. The term “Halal” within the Food & Beverage Industry, it basically denotes anything permissible to consume.  If it is used in reference to animal meat, then it means any animal which has been slaughtered in accordance with the Shariah method is Halal (lawful) to consume. Obviously, Nestle, Unilever, and Cadbury leading international conglomerates are at the forefront of Halal enterprise, as European and American conglomerates represent seven out of the ten world players in the global Halal market. The global Halal economy is recording remarkable growth and may grow 20% annually according to the global Islamic report 2022. The report indicated that the global sales of Halal products or services for 2020-2021 were $2trn each despite the COVID-19 pandemic.

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The Nigerian Halal Market   

The Standards Organization of Nigeria (SON), a government agency responsible for setting and enforcing standards for products and services in the country,  in 2023 revealed that the Nigerian economy would gain from the Halal products industry. According to the SON, the sector is valued at trillions of US dollars. The growth was expected to move from 107 billion dollars in 2022 to 180 billion dollars by 2027 in the Western African nation. The market is expected to grow at an annual growth rate of 10.7 per cent, the 2023 Halal Markets report said.

Similarly, the Nigeria Halal Economy Report 2023 also indicates that incremental export and import substitution alone can boost the country’s GDP by US$1.49 billion. Nigeria’s exports currently represent only 5.7% of Africa’s US$4.2 billion halal product exports to OIC countries. Correspondingly, as of 2023, some analysts indicated that the Halal market is capable of boosting the Nigeria market by 1.6 billion dollars annually within four years through incremental growth. Observers say, “If Nigeria increases its share of exports to the OIC from 2% to 6% (mid-scenario) in the next four years, its exports to the OIC will increase from US$240 million to US$788 million, boosting Nigeria’s GDP by US$548 million.”

This shows significant opportunities for businesses and investments capitalize on the growing demand for Halal products in the Nigerian economy. Also, it has the potential for job creation and economy growth, especially in agriculture, food processing, the film industry, and logistics.

What is important?

Halal Products are consumable foods allowed into the country after necessary certification. The Halal certificate is a certification that certifies that products and services aimed towards the world’s 1.8 billion Muslims exceed all quality standards and are hence fit for consumption. The Halal certification is a procedure that assures the characteristics and quality of the items while also allowing them to use the Halal symbol.

In Nigeria, much of the Halal foods are eaten by the Hausas, Fulanis, and Yoruba Muslims. The Halal Nigerian Restaurants cuisines appeared to have played a significant effect on African cuisines as well as the cuisines of several other Muslim nations in Africa, even affecting European cuisines. Also, in order to check if a product is halal, you can simply look for halal certification labels on the packaging, consult a trusted source or local religious authority that can help you verify the product’s ingredients and comply with Islamic dietary laws. Halal certification is mentioned on the labels of certain food products like dairy products, sugar bakery products, salty ready-to-eat savouries and edible oils etc

The Halal Certification Authority (HCA) is the authorized certification and quality assurance body that develop Halal product standards and accreditation process and procedures for Halal product certification in the country. The faith-based products certification body, is the brain behind the halal logo found on some product. The organization states that: “Having carried out audit operations for well over 6 years, HCA is at the forefront of scrutinising the quality and safety of products, in accordance with the dictates of the shari’ah.” This clarifies the influences of the Islamic Regulatory Body in the Nigerian Halal Products Industry. As evidence of this assertion, it was found that the HCA has certified Golden Sugar Co., Nasco Foods, Rom Oil Mills, Golden Pasta & Noodles, Greensprings Foods Limited, Domino’s Pizza, Honeywell Flour Mills, and Rite Foods Limited.

The Nigeria Halal Economy Report 2023 recommends that simplifying trade regulations, enhancing production competitiveness, increasing consumer awareness, and fostering partnerships are some strategies that can help Nigeria develop and grow its halal segment of the Nigerian economy. Adding that some key products Nigeria should prioritize for exports include cocoa preparations, meat and edible meat offal, sugar and confectionery, live animals, and medicaments.

Meanwhile, the universal concept of the Halal economy is not only for Muslims but also for other faiths. Nigerians need to take advantage of the huge opportunities created by the emerging halal industry; hence the government should create the right regulation and the enabling environment for entrepreneurs, organisations, associations and accreditation bodies to support the entire value chain.

In addition, the essence of investment is to ensure that wealth is not depleted but preserved, so the economy is aimed at simplifying trade regulations and fostering trade relationships. As investment in Halal market can help to enhance the country’s global reputation and attract more foreign investment.

Furthermore, experts encourage manufacturers, farmers, suppliers, entrepreneurs, exporters, and banks to invest in the Halal industry, as Halal food symbolizes cleanliness, richness, integrity, and safety. Similarly, the market would help inspire individual investment to grow, simplify faith, lead to regulations as well as increase consumer awareness.

Analysts note that becoming a top halal exporter through targeting high-value OIC countries and prioritizing halal product segments. Government and local companies expose the halal market opportunity to international investors. Invest in the adoption of technologies to improve agricultural yield, reduce losses, and improve traceability. Increase regional exports through intra-Africa trade deals, where Nigeria should adopt a leading role.

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