Increased crude oil sales have pushed Nigeria’s foreign trade by 47.07 per cent year-on-year to N25.84tn in the first half of 2022, according to foreign trade data from the Nigerian Bureau of Statistics.
In the first half of 2021, total foreign trade was N17.57tn, with crude exports at N6.12tn. Total imports for the first half of 2021 was N9.57tn and export was N8.01tn with a trade deficit of N1.56tn.
In the first half of 2022, foreign trade totaled N25.84tn, with crude exports at N11.53tn. Total imports for the period were put at N11.34tn, exports were put at N14.51tn, and the trade surplus was N3.17tn.
Commenting on foreign trade for the second quarter of 2022, the NBS said, “Nigeria’s total merchandise trade stood at N12.84tn in the second quarter of 2022, indicating a marginal decrease of 1.23 per cent over the value recorded in the first quarter of 2022 and 32.22 per cent higher when compared to the value recorded in the second quarter of 2021.
“The export trade in the quarter under review stood at N7.41tn showing a rise of 4.31 per cent over the value recorded in the preceding quarter and also increased by 47.55 per cent over the corresponding period of the preceding year. Furthermore, the share of exports in total trade stood at 57.68 per cent in Q2, 2022.
“On the other hand, total imports were valued at N5.41tn in Q2, 2022 indicating a decrease of 7.89 per cent over the value recorded in the preceding quarter. However, the value increased by 15.83 per cent over what was recorded in the corresponding period of 2021. Imports value in the second quarter of 2022 accounted for 42.32 per cent of total trade. The balance of trade in the period under review stood at N1.97tn.
“The value of exports trade in the second quarter of 2022 was dominated by crude oil exports valued at N5.91tn which accounted for 79.77 per cent of total exports while non-crude oil exports value stood at N1.49tn or 20.23 per cent of total exports of which non-oil products contributed N675.08bn representing 9.11 per cent of total exports.”
The statistics body revealed that the top five nations the nation reexported to were Cote d’Ivoire, Democratic Republic of Congo, Ghana, Cameroun, and Turkey. The top five export destinations for the quarter of 2022 were India, Spain, The Netherlands, the United States of America, and Indonesia.
In the quarter, Nigeria imported mostly from China, Belgium, India, The Netherlands, and the United States of America with motor spirit ordinary, gas oil, and durum wheat being the most imported commodities.
Maritime accounts for the majority of commodities exported and imported. Apapa ports is the major port in the nation, accounting for majority of exports and imports. Tin can Island and Port Harcourt ports are the other ports goods leave and come in through.
Data from NBS suggests an increase in crude oil earnings. But increasing subsidy payments, reduced oil production, oil smuggling, and debt servicing are eroding the benefits of higher oil prices with the nation battling with a foreign exchange crisis.
Commenting on the trade surplus, a professor of Economics at the University of Uyo, Prof Akpan Ekpo, said, “A Trade surplus means that your exports exceed your import. And crude exports are what dominate, and the demand for foreign exchange is more than the supply.
“It doesn’t mean that if you have a trade surplus, you will have enough reserves for your citizens. We export more of crude oil but the money coming in is not enough to meet the demand for foreign exchange, this is what we are witnessing. Also, the backlog demand for foreign exchange is also there. It doesn’t mean when you have a trade surplus, you will have a lot of foreign reserves. You need to produce and export non-oil goods to earn more foreign exchange.
On how the nation can improve the components of its exports, the Managing Director/Chief Executive Officer, Cowry Asset Management Limited, Mr Johnson Chukwu, explained that changing the structure of the economy would not happen over time, and might take a decade.
He stated that the nation needs to shift from an extractive industry-controlled economy by improving supporting infrastructure to upscale the production of manufacturing activities.