Trade conducted between Nigeria and other countries hit N170.265 trn from 2018 to 2022 (5 years), analysis of reports from the National Bureau of Statistics (NBS) has shown.
Daily Trust reports that during the period, total exports were N89.5trn while imports were N80.6trn. This made Nigeria record an N8.9trn surplus of the balance of trade during the period.
When broken down, the analysis indicated that in 2018, Nigeria’s total trade was N31.67trn, from this, the total import was N13.1trn with export valued at N18.5trn, and the balance of trade was N5.3trn.
In 2019, the total trade was 36.1trn with import gulping N16.9trn while export was N19.1trn and balance of trade was recorded at N2.2trn.
For 2020, the total trade was N25.2trn out of which N12.7trn goods were imported and N12.5trn was exported with a trade balance of -N178.2bn.
Trade recorded for 2021 was 39.7trn with importation recorded at 20trn while export was 18.9trn, -N1.9trn balance of trade was recorded.
The figure for 2022, which was from January to September, showed that total trade was N37.4trn. With October to December yet to be published, it is safe to say 2022 would have the highest trade recorded. This is just as goods imported were valued at N17trn and exported goods valued at N20.4trn while the trade balance was N3.4trn.
Analysis showed that crude oil exported during the period was valued at N69.8trn with non-crude oil export worth 19.7trn and non-oil export valued at N9.1trn.
Similarly, a sectorial breakdown indicates that Nigeria’s most exported product was crude oil fetching the country N69.8trn, then other forms of oil worth N10.5trn, manufactured goods N5.1trn, agricultural products N1.8trn, raw materials N1.6trn, energy N233.2bn and solid mineral N221.7bn.
Further analysis on importation by region showed that Asia is Nigeria’s top trading partner with goods worth N37.8trn; this is followed by Europe with N30trn, Americas with N9.1trn, Africa with N3.1trn and Oceania, N533bn.
Importation by country saw China (N19.7trn) as the top destination for goods entering into the country. This was followed by the Netherlands (N7.6trn); India (N7trn), the United States (6trn), Germany (N2.1trn) and France (N1.8trn).
On the other hand, Europe was the biggest destination for Nigeria’s products, importing goods worth N37trn. This was followed by Asia, importing N28.4trn worth of goods; then Africa N12.7trn goods, America N10.6trn and Oceania N739.9trn.
Also, India topped on the export destination of Nigerian goods with goods worth N13.8trn, followed by the Netherlands (N7.9trn), Spain (N10trn), France (N5.3trn) and the United States (N4.6trn).
Importation of motor spirit, also called fuel, was N12.4trn during the period with a breakdown showing N2.9trn of the product was imported in 2018, N1.7trn in 2019, N2trn in 2020, N4.5trn in 2021 and N1.1trn in 2022.
This shows that the country imported more than double of products in 2021 when compared to other years under review.
Speaking on the rise of Nigeria’s foreign trade, a financial expert, Paul Alaje said the real money to be used to measure international trade is the US dollars, as the naira will not give the true value or picture.
He said Nigeria’s volume of trade might in a real sense be reducing because the naira has been devalued over the years.
“On the other hand, what can also make the volume of trade increase is COVID is going down. As COVID restrictions relax, consumption in Nigeria is increasing as we have it in the rest of the world. So that will aid our further importation of commodities for domestic use.”
He added that another factor is that the trade of 2023 increasing can be connected to the federal government being able to stop oil theft around the third to the fourth quarter, thus, what to be exported would increase since the economy is highly dependent on crude.
“What gives us a significant part of our foreign earnings remains crude oil. If we do not have crude oil, what comes in from other parameters for our foreign reserves to grow is going to be a major challenge. This is why it is very difficult for the CBN to defend the naira when we are not exporting enough. Crude oil is still the bedrock and that is why the ministry of trades and investment must wake up to their responsibility.”
He pointed out that conversation on trade in the country should not be limited to SMEs, stating that the country needs to attract viable investment where people want to bring significant investment that can help shore up foreign reserves.
He noted that without crude, Nigeria is not contributing any substantial product to global trade and most of the money gotten from crude is used to buy PMS and gas “so, we are not really feeling better, the impact.”
On his part, Prof. Jonathan Aremu stated that the low trade with Nigeria and other African countries is due to manufacturing companies sourcing their intermediate and raw materials from outside Africa.
He said the finished goods consumed in the country are also bought from Europe, America, Asia and China.
He, therefore, said the Africa Continental Free Trade Area (AfCFTA) would help to stop this by substituting such products with those that can be produced in Africa while using a differential tariff.
“That is to say that import duty will be removed on products within Africa so that we can trade freely among ourselves, which is the basis for AfCFTA. This has worked perfectly well in Europe as about 60 per cent of trade there is among themselves, North America free trade area comprising Mexico, Canada and the United States, they trade approximately 40 per cent. Southeast Asia had about 36 per cent but in Africa, we don’t have up to 15 per cent among ourselves.”
When asked why Nigeria’s crude oil is not making it to the African market, he said it is very unfortunate that the country mines oil with less or no value as such products do not command very good prices in international trade.
He maintained that the AfCFTA is expected to enable Nigeria to get some input from other African countries in terms of intermediate products that can be used to process the oil.
“Already, some African countries are processing oil, so nothing stops Nigeria from ensuring that we equally have an increasing refinery that can be used to refine our crude oil. Selling primary products alone in global trade is not a good development. That is why Africa, on the whole, accounted for only 3 per cent of global trade because most of our commodities are primary products.”