Commercial debt recovery in Nigeria is becoming increasingly important as cross-border trade with African markets grows and more businesses extend credit terms to customers. For importers, wholesalers, manufacturers, and service providers, slow or unpaid invoices can quickly disrupt cash flow, delay shipments, and strain supplier relationships. Understanding how commercial debt recovery works in Nigeria – and how to manage it effectively – is therefore essential for any business trading with Nigerian counterparts.

Understanding commercial debt recovery in Nigeria

Commercial debt recovery in Nigeria refers to the processes and legal mechanisms used to collect unpaid invoices arising from business-to-business (B2B) transactions. These may include unpaid supply contracts, trade credit, distribution agreements, transport and logistics fees, or service retainers.

In practice, commercial debt recovery in Nigeria typically follows a staged approach:

• Internal follow-up by the creditor

• Formal demand letters

• Negotiation or repayment plans

• Use of local collection agents or lawyers

• Court action where necessary

For foreign suppliers or distributors, the main challenge is often distance and limited knowledge of Nigerian legal procedures and business culture. This is where having a reliable local partner becomes crucial.

Common causes of overdue debt in Nigerian trade

To handle commercial debt recovery in Nigeria effectively, it helps to understand why invoices become overdue in the first place. Typical causes include:

• Foreign exchange constraints – Delays in accessing foreign currency for international payments

• Cash-flow issues – Retailers or distributors struggling with their own slow-moving stock

• Contract ambiguity – Vague payment terms, unclear Incoterms, or poor documentation

• Disputes over quality or quantity – Issues in product specification, damage in transit, or partial deliveries

• Weak credit checks – Extending credit to customers without proper assessment

Addressing these root causes proactively – through clearer contracts, better credit control, and stronger logistics visibility – can reduce reliance on formal debt recovery later.

Key steps in commercial debt recovery in Nigeria

A structured process improves the chances of successful recovery without damaging long-term relationships.

1. Internal credit control and documentation

Effective commercial debt recovery in Nigeria starts long before a payment is overdue. Businesses should:

• Perform credit checks on new buyers

• Use clear contracts and local-law-compliant terms

• Keep detailed records of purchase orders, delivery notes, invoices, and correspondence

For companies importing into or exporting from Nigeria, working with a trading and logistics partner like Wigmore Trading can help ensure documentation, delivery evidence, and customs paperwork are properly managed – all essential in any later dispute.

2. Formal demand and negotiation

When an invoice becomes overdue, a clear and professional communication strategy is vital. This usually includes:

• Reminder notices and statements of account

• A formal letter of demand specifying the amount owed and deadline

• Offering structured repayment plans where appropriate

In many cases, commercial disputes in Nigeria can be resolved at this stage through negotiation, especially when a local representative understands how to engage with the debtor’s management and finance teams.

3. Using local recovery agents and legal support

If negotiation fails, creditors often appoint:

• Local collection agencies familiar with business practices and languages

• Nigerian law firms experienced in commercial litigation and debt recovery

These professionals can issue formal notices, initiate pre-action negotiations, and, if necessary, file claims in Nigerian courts. For international companies, coordinating this process directly can be complex. A trade specialist such as Wigmore Trading can help identify credible local partners and ensure they are aligned with your commercial and reputational priorities.

4. Litigation and enforcement

Court action is generally a last resort in commercial debt recovery in Nigeria due to time and cost. However, where the debt is large or the debtor is uncooperative, litigation may be necessary. Successful court judgments can be enforced through:

• Garnishee orders against bank accounts

• Writs of execution over assets

• Other court-approved enforcement measures

Well-prepared documentation and a clear chain of evidence from order to delivery greatly increase the chances of a positive outcome.

Risk management and prevention strategies

Prevention is more efficient than recovery. Businesses trading with Nigerian partners can strengthen their position by:

• Structuring payment terms wisely – Using deposits, letters of credit, or shorter credit periods for new customers

• Securing guarantees – Personal or corporate guarantees where appropriate

• Aligning logistics and finance – Ensuring proof of delivery, customs clearance, and warehouse receipts are easily accessible

• Monitoring accounts closely – Early intervention when payment patterns change

Working with a partner like Wigmore Trading, which is active in import/export, wholesale distribution, FMCG, and logistics across African markets, helps integrate these risk controls into your everyday operations – from sourcing and shipping to warehousing and final delivery.

How Wigmore Trading supports commercial debt recovery in Nigeria

While Wigmore Trading is not a law firm, it plays a practical role in reducing and managing bad debt risk for clients trading with Nigerian buyers and suppliers. This can include:

• Ensuring accurate and complete trade documentation

• Coordinating logistics and providing clear proof of delivery

• Helping structure contracts and trade terms that support enforceable payment obligations

• Connecting clients with reputable local legal and recovery partners when formal debt recovery is required

By combining on-the-ground logistics knowledge with commercial experience in African trade, Wigmore Trading helps businesses protect cash flow while maintaining sustainable relationships with Nigerian partners.

If your business is facing issues with late payments or unpaid invoices from Nigerian customers, or you want to design a stronger strategy for commercial debt recovery in Nigeria, Wigmore Trading can help. Contact Wigmore Trading today to streamline your sourcing, distribution, and risk management across Nigeria and wider African markets.