June 30, 2022/CSL Research
The recently released Foreign Trade data by the Nigerian Bureau of Statistics for Q1 2022 showed that Nigeria’s total trade stood at N13trn, up 65.41% y/y over N7.86trn recorded in Q1 2021 and up 11% q/q compared with N11.71trn recorded in Q4 2021. Total Exports amounted to N7.10trn of which Re-exports stood at N115.8bn, while total imports stood at N5.90trn. The data further showed that total exports increased by 23.13% when compared with Q4 of 2021 (N5.77 trillion) and by 137.88% compared with the value recorded in Q12021 (N2.98 trillion). On the other hand, total imports increased by 21.04% compared to the value recorded in Q1 2021 (N4.86trn) but decreased by 0.67% compared to the value recorded in Q4 2021 (N5.94 trillion).
As usual, crude oil dominated the export earnings with a total value of N5.62trn representing 79.16% of total exports, followed by ‘Natural gas liquefied’ worth N655.94 billion accounting for 9.24%, and ‘Urea, whether or not in aqueous solution’ accounting for 2.93% (N208.39bn) of total exports. The top ten export destinations in the first quarter of 2022 were India with a share of 16.57%, followed by Spain (9.54%), Netherlands (9.30%), Indonesia (6.68%), the United States (5.25%), Italy (5.16%), France (4.77%), Gibraltar (4.27%), Saudi Arabia (3.88%) and Canada (3.68%), altogether, the top ten countries accounted for 69.11% (N4.91 trillion) of the total value of exports (N7.1 trillion). On the other hand, China, The Netherlands, Belgium, India, the United States, Norway, France, South Korea, United Kingdom, and Brazil were the top ten countries of origin of imports to Nigeria. The values of imports from the top ten countries amounted to N4.36trn,representing 58.34% of the total value of imports.
We note that the trade values were partly influenced by the 9.47% official devaluation from N380/US$ in Q1 2021 to N416/US$ in Q1 2022. However, export earnings from manufactured goods in the review period remained low at N219.08bn, accounting for only 3% of total export earnings (N7.10 trillion). This buttresses our concern that the recent “Race to USD200 Billion in FX Repatriation (RT200 FX)” Programme, introduced by the Central Bank of Nigeria may fail to achieve its aim if efforts are not made to solve the structural problems limiting production as the policy is specifically targeted at manufactured (finished and semi-finished) goods). Meanwhile, the external reserve is up to US$38.84bn as of June 28, 2022. We believe the reduction in imports may be connected to the build in external reserve level.
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