In the first half of 2023, Nigeria engaged in trade amounting to N24.79 trillion in goods and services with global partners, resulting in a N2.2 trillion trade surplus, as reported by the National Bureau of Statistics (NBS).
While these figures indicate a -12.68% decline compared to the N28.39 trillion traded in the same period of 2022, they also signify a significant +258% year-on-year (Y-o-Y) increase in trade surplus, highlighting a potential enhancement in Nigeria’s international net trade.
Total imports for H1 2023 amounted to N11 trillion, with total exports reaching N13.50 trillion, contributing N2.2 trillion to the country’s foreign exchange earnings.
The data reveals that crude oil remains Nigeria’s dominant export product for H1 2023, constituting approximately 79.50% of exports, while other oil products make up 10.57%, manufacturing 2.54%, and agriculture 4.15%.
This suggests that despite reduced crude oil production, oil still heavily influences the nation’s exports, indicating a lack of comparative advantage in non-oil products.
In contrast, Nigeria’s imports for H1 2023 predominantly comprised manufactured products at 47.99%, oil products at 33.17%, agriculture at 8.21%, and raw materials at 9.95%.
Analysts believe that due to substantial domestic productivity gaps, reliance on imported fuel is likely to continue undermining the country’s foreign exchange position.
A breakdown of trading partners reveals that Nigeria’s largest trading partners are Europe (46% of total exports) and Asia (25%), while intra-African trade accounts for a modest 19%.
Likewise, Nigeria’s primary sources of imports are Asia (42%) and Europe (38%), with other African nations contributing 15% to imports.
The relatively limited trade relations with other African countries in favor of India (Asia), the Netherlands (Europe), and the United States (America) may restrict Nigeria’s ability to maximize the benefits of the African Continental Free Trade Agreement (AfCFTA).
*Culled from Proshare
