NIGERIA’S FOREIGN TRADE DROPS TO N8.3 TRILLION, DOWN BY 18% IN Q1 2020
Nigeria’s total foreign trade (import and export) rose marginally by 0.8% year on year, when compared to N8.24 trillion recorded in the corresponding quarter of 2019. Nigeria’s total foreign trade (import and export) dropped by 18% in Q1 2020, from N10.12 trillion in the fourth quarter (Q4) 2019 to N8.3 trillion at the end of Q1 2020. This was disclosed in the latest foreign trade report released by the National Bureau of Statistics (NBS).
According to the report, the year-on-year total foreign trade increased by 0.8%, from N8.23 trillion in Q1 2019 to N8.3 trillion in Q1 2020, reflecting the early effects of disruption caused by Covid-19 pandemic.
As at the end Q1 2020, Nigeria’s total foreign trade balance remained in the negative region. In Q1 2019, total import for the period stood at N4.22 trillion while total export was N4.08 trillion indicating a negative trade balance of N138.99 billion. The value of total imports decreased by 21.08% in Q1, 2020 compared to the value recorded in Q4 2019 but was 13.99% higher when compared with Q1, 2019.
Also, the value of imported agricultural goods increased by 12.02% in Q1 2020 compared to Q4 2019 and 10.62% more than Q1 2019. The value of Agricultural goods exports grew 85.36% in Q1, 2020 compared to Q4, 2019 manufactured goods exports decreased by 12.72% in value in Q1, 2020 compared to Q4 2019
Nigeria’s export downturn
A closer look into the data shows that Nigeria recorded its lowest export value in eight quarters since it recorded a total of N3.91 trillion in Q4 2017. A case which has clearly affected the value of crude oil exports and non-crude oil simultaneously.
According to the report, crude oil export (N2.94 trillion) dipped by 18.9% in Q1 2020 compared to N3.63 trillion recorded in Q4 2019 and sloped to its lowest in 11 quarters since Q2 2017 when the total crude oil export was estimated at N2.43 trillion, while non-crude oil export (N1.14 trillion) reduced marginally by 0.27% as against N1.14 trillion recorded in the preceding quarter Q4 2019.
It is worth noting that value of exported agricultural goods stood at N126.35 billion in Q1 2020, indicating 85.36% increase compared to N68.16 billion recorded in Q4 2019. The majorly traded agricultural products include; sesame seeds, good fermented cocoa beans, superior quality raw cocoa beans, natural cocoa butter, cashew nuts, ginger etc.
Top trade destinations
In Q1 2020, Nigeria exported goods majorly to India, Spain, Netherlands, South Africa and Cameroon while our major Import sources include China, Netherlands, United States, India and Belgium. India accounted for 15.61% (N637.53 billion) of the total value of exported goods by region, followed by Spain which accounted for 9.87% (N402.93 billion) of our total exports between January and March 2020.
Top Nigeria’s export nations
India – 15.61%
Spain – 9.87%
Netherlands – 9.72%
South Africa – 7.82%
Cameroon – 7.82%
Meanwhile, Nigeria’s export to ECOWAS member states between January and March 2020, was estimated at N296.29 billion, representing 30.29% of the total export to Africa while Other regions of the continent accounted for 69.71% (N681.92 billion) to the total export.
In the same vein, Nigeria imported goods valued at N1.11 trillion from China, accounting for 26.28% of the total value of exported items in the first quarter of 2020. The Netherlands followed, having accounted for 11.14% (470.11 billion) of the total export.
Imports from African countries stood at N118.95 billion in Q1 2020, representing 2.82% of Nigeria’s total import between January and March 2020.
Top Nigeria’s import nations
China – 26.28%
Netherlands – 11.14%
USA – 10.45%
India – 7.92%
Belgium – 6.11%
Implication for Nigeria’s economy
The latest report shows that Nigeria has maintained its negative trade balance from Q4 2019, which indicates that we are exporting more than we are importing, consequently affecting the country’s foreign reserve. A decline in the export of manufactured goods is an indication of the country’s low industrial and manufacturing industry.
Despite the increase in Agricultural export, there was also a recorded increase in the import value as well, which directly contradicts the essence of border closure as a measure of discouraging importation. It is expected that the Q2 2020 report will give a full reflection of the effect of COVID-19 and lockdown procedures on Nigeria’s trade balance. Note that during the lockdown, ban was placed on international travel by most countries which would affect our export capacity. Also, medical supplies and ventilators used in isolation centers in Nigeria are were not manufactured in Nigeria, consequently affecting the country’s trade balance.