June 15, 2021/Proshare

by FBNQuest Research

The latest report from the Nigeria Bureau of Statistics (NBS) in its series on foreign trade in goods, drawn primarily from the Nigeria Custom Service, shows the total value of trade as NGN9.76trn in Q1 ’21, +7% q/q and +14% y/y. Compared with Q4 ’20, the total export value decreased 9% to NGN2.9trn while import value rose 16% to NGN6.85trn – more than double that of exports. The net result was a deficit of NGN3.94trn (vs NGN2.7trn in the previous quarter) and represents the sixth consecutive trade deficit figure. 

Based on reports from the UN Conference on Trade and Development (UNCTAD), global trade has bounced back to pre-pandemic levels and rose 10% y/y in Q1 ’21, thanks to strong export performance of economies in East Asia. Early success in pandemic mitigation enabled markets in the region to bounce back faster and capitalise on rising global demand for COVID-19-related products such as face masks. However, while the value of goods traded in Q1 ’21 was higher than pre-pandemic levels, trade in services remains below average.

For Nigeria, the NBS notes that the majority of imports in Q1 ’21 originated from East Asia (China, especially), in line with the UNCTAD reports. The value of imported agricultural and manufactured goods as well as oil-related products rose by 18-19% q/q. 

As usual, crude oil accounted for the largest share (66%) of total exports in Q1. However, the value of crude oil exports declined by 23% q/q and 34% y/y.

Nigeria exported goods valued at NGN282bn to fellow members of the Economic Community of West African States (ECOWAS), compared with NGN145bn the previous quarter. This represented 63% of total exports within Africa. Meanwhile, imports from ECOWAS accounted for 11% of the value of total imports.

The African Continental Free Trade Area (AfCFTA) agreement is expected to contribute significantly towards the development of regional value chains. To maximise the benefits of the agreement, Nigeria’s manufacturing sector needs to be strengthened. Furthermore, local manufacturers need to significantly improve their service delivery and product standards if they are to be competitive in a burgeoning intra-continental marketplace.

Merchandise trade values (N’ trn)

Source: National Bureau of Statistics (NBS); FBNQuest Research