March 17, 2022/CSL Research

Based on data released by the National Bureau of Statistics, Nigeria’s foreign trade deficit

widened to a record N1.94 trillion in 2021 as imports exceeded the value of the country’s  exports. The reported trade deficit was 986% higher than a deficit of N178.3bn recorded in  2020 as Africa’s biggest economy continues to grapple with low oil production and higher  import bills. Total imports of N20.8trn were 64.1% higher in 2021 than the N12.7trn value recorded in 2020 while total exports of 18.9trn were 50.99% higher in 2021 than the  N12.5trn recorded in 2020.

On the import side, mineral fuels accounted for the highest value of imports, making up  31.0% of the value of total imports into the country and up by 123.1% compared to 2020.  The increase in mineral fuels imports must have fed off the increase in the price of PMS as  crude oil prices increased in 2021 compared with 2020. This was followed by machinery and transport equipment, which accounted for 27.5% of the total value of imports and was up by 37.7% in 2021 when compared with 2020. An increase in transport and machinery equipment points to the continuous growth in activity in the general economy post the emergence of covid-19 in 2020 as all imported goods showed significant growth in 2021 compared with 2020. In the fourth quarter of 2021, the top eight countries where imports came from were China, Belgium, India, Netherlands, United States, Norway, Ukraine and France.

The y/y growth in value of exports in 2021 was driven by growth in exports of solid mineral, raw material goods exports and agricultural exports. Crude oil exports continued to account for the highest value of exports, accounting for 76.2% of total exports. However, low production continues to undermine gains from high crude oil prices. Major export trade partners were India, Spain, France, Netherlands and Indonesia. We had expected the current account deficit to narrow in 2022 when compared with 2021. We projected imports to grow by 30.0%, supported by improving domestic consumption and continued FX liquidity supply by CBN while we expected exports to grow by 24%. Current realities, however, may imply a much higher import bill as mineral fuel imports continue to rise with the increase in crude oil prices and gains remain capped on the export side with limited production of crude oil.

Click here to read full PDF copy of report