Trade Deficit Worsened as Nigeria Spends More on Imports
Nigeria’s total imports from the fourth quarter strongly outpaced the nation’s entire exports value despite the push for a favourable balance of trade, and payments amidst foreign currencies scarcity.
In the fourth quarter of 2021, Nigeria’s total merchandise trade stood at ₦11,707.20 billion, the National Bureau of Statistics (NBS) said in the latest trade report.
Value of imports rise more than 64% between 2020 and 2021 while the value of exports inched up about 51% in the same period, driven by crude oil. The total trade deficit however expanded to about N2 trillion, according to data.
The surge represents 11.79% over the level recorded in the third quarter of 2021 but was 74.71% higher when compared to the value recorded in the fourth quarter of 2020.
The Bureau noted that export trade in the fourth quarter of 2021 printed at ₦5,766.62 billion indicating an increase of 12.27% over the preceding quarter and the value in 2021 also grew by 80.52% over the corresponding period of the previous year.
It was noted in the report that the share of exports in total trade stood at 49.26% in Q4, 2021. On the other hand, total imports stood at ₦5,940.58 billion in Q4, 2021 indicating an increase of 11.33% over the preceding quarter and 69.41% over the corresponding period of 2020.
Imports’ value in the fourth quarter of 2021 accounted for 50.74% of total trade. The balance of trade in the period under review stood at (₦173.96 billion), this shows a deficit trade with an improvement of 12.72% over the preceding quarter, according to NBS.
In 2021, the value of total trade stood at ₦39,751.75 billion which is 57.60% higher than the value recorded in 2020.
However, the value of total imports in 2021 stood at ₦20,843.96 billion which is 64.11% higher than the value recorded in 2020, while total exports were valued at ₦18,907.79 billion showing an increase of 50.99% than the value recorded in 2020.
Overall in 2021, merchandise trade recorded a deficit of deficit (₦1,936.18) billion. Export in the fourth quarter 2021 was still oil-dependent.
Crude oil exports recorded N4,269.36 billion and it remained the major product in total exports (74.04%), while non-crude oil was valued at N1,497.26 billion or 25.96% of total exports of which Non-oil products contributed N810.88 billion representing 14.06% of total exports during the quarter under review.
During the fourth quarter of 2021, total imports were valued at ₦5,940.58 billion accounting for 50.74% of total trade.
The import value rose by 11.33% in Q4, 2021 compared to Q3, 2021 and 69.41% compared to Q4, 2020. On an annual basis, the value of imports rose to ₦20,843.96 billion in 2021, which was 64.11% and 22.90% higher than in 2020 and 2019 respectively.
The value of Mineral fuels was ₦1,700.13 billion (28.62% of total imports) while imported Machinery & transport equipment stood at ₦1.639.66 billion (or 27.60% of total imports) and Food & live animals recorded ₦798.51billion (or 13.44% of total imports) and On an annual basis, total imports were valued at ₦20,843.96 billion in 2021.
In the fourth quarter, Nigeria imported goods mainly from Asia, valued at ₦2,743.76 billion or 46.19% of total imports.
This was followed by Europe at ₦ 2,422.41 billion or 40.78%, America at ₦ 571.70billion or 9.62%, Africa at ₦161.47 billion or 2.72% and Oceania at ₦41.24 billion or 0.69%. Imports from ECOWAS countries accounted for ₦35.76 billion, or 0.6% of the value of total imports.
Similarly, Asia also accounted for the largest imports to Nigeria, representing 46.47% of total imports, valued at ₦9,687.08 billion in 2021. This was followed by Europe with imports valued at ₦8,357.96 billion or 40.10% of total imports, and America, with ₦2100.70 billion or 10.08% of total imports.
By country of origin, imported goods originated mainly from China and were valued at ₦ 1,652.65 billion, representing 27.82% of total imports.
This was followed by Belgium valued at ₦613.27 billion or 10.32% of total imports, India (₦430.38 billion or 7.24% of total imports), The Netherlands (₦416.52 billion, or 7.01% of total imports) and the United States (₦340.36billion or 5.73% of total imports).
In Q4, 2021, the value of total export stood at ₦5,766.62 billion, accounting for 49.26% of total trade. The export value rose in Q4 2021 by 12.27% against the level recorded in Q3, 2021 and by 80.52% when compared to Q4, 2020.
Exports by section revealed that Nigeria exported mainly mineral products, which amounted to ₦4,989.94billion, or 86.53% of total export value followed by ‘’Vehicles, Aircraft and parts’’, which was valued at ₦288.16 billion (or 5.0% of the value of total exports) and ‘’Products of the chemical and allied industries’’ worth ₦ 227.69 billion (or 3.95% of the value of total exports).
Export trade by region in Q4 2021 shows that Nigeria exported most products to Europe with goods valued at ₦2,408.39 billion or 41.76% of total exports, Asia (₦1,875.56 billion, or 32.52% of total exports) and Africa was ₦773.83 billion or 13.42% of total exports of which ₦250.52 billion worth of goods were exported to ECOWAS countries and exports to America amounted to (₦702.74 billion, or 12.19% of total exports).
Export trade to trading partners shows that India remained the top export destination for Nigeria during the quarter under review.
The top five export destinations were India, Spain, France, The Netherlands and Indonesia with goods valued at ₦ 874.86 billion or 15.17%, ₦789.23 billion or 13.69%, ₦485.35 billion or 8.42%, ₦425.85 billion or 7.38%, and ₦ 288.10 billion or 5.0% of export trade respectively.
These five countries collectively accounted for 49.65% of the value of total exports in Q4, 2021.
Agricultural Goods Sector
The value of total trade in agricultural goods in Q4, 2021 stood at ₦799.87 billion representing 6.83% of total trade in Q4, 2021. Export of Agricultural goods was valued at ₦132.71 billion or 2.30% of total exports in Q4, 2021.
When compared to the value recorded in Q3, 2021 (₦79.41 billion) and Q4, 2020 (₦55.78 billion), agricultural exports increased by 67.12% and by 137.93% respectively.
During the quarter, most agricultural products were exported to Europe (valued at ₦68.20 billion) and Asia (valued at ₦55.74 billion).
Export of agricultural products was dominated by Good fermented cocoa beans (valued at ₦58.22 billion) Sesamum seeds, whether or not broken’’ (valued at ₦40.72 billion) and Superior quality raw cocoa beans (₦14.62 billion).
By direction of trade, “Good fermented cocoa beans” worth ₦25.21 billion was exported to The Netherlands and ₦10.71 billion to Germany.
Furthermore, sesamum seeds worth ₦18.52 billion and ₦6.47 billion were exported to China and Japan respectively followed by Superior quality raw cocoa beans worth ₦8.78 billion was exported to The Netherlands and ₦4.05 billion to Germany.
On the other hand, total imports of agricultural goods imported in Q4, 2021 stood at ₦667.16 billion. This shows an increase of 38.35% over the previous quarter when compared to the value recorded in Q3, 2021 (₦482.21 billion).
Import of Agricultural goods was valued at ₦667.16 billion or 11.23% of total imports in Q4, 2021. When compared to the valued recorded in Q3, 2021 (₦482.21billion) and Q4, 2020 (₦305.32 billion), agricultural exports increased by 35.03% and by 118.51% respectively.
The major agriculture goods imported in Q4, 2021 included Durum wheat (not in seeds) were from the United Arab Emirates (₦174.80billion) and Lithuania (₦57.21 billion).
This was followed by Crude palm oil from China valued at ₦20.28 billion and from Malaysia (₦16.49 billion) and “Palm Olein” worth ₦31.43 billion was imported from Malaysia.
Solid Minerals Sector
The value of total trade in solid minerals in Q4, 2021 stood at ₦43.37 billion representing 0.37% of total trade in Q4, 2021. Solid minerals exports in Q4, 2021 stood at ₦13.56 billion, a decrease of 25.95% compared to Q3, 2021 but an increase by 201.41% when compared to the corresponding quarter of 2020.
The major exported solid mineral was “Other excluding White cement’’ to Niger, valued at N3.62 billion followed by “Zinc ores and Concentrates” worth ₦2.66 billion to China.
With regards to imports, ‘’Gypsum anhydrite‘’ was imported from Spain worth ₦7.95 billion and from Turkey valued at ₦2.6 billion.
Other products imported under this category were ‘’Plasters of Calcined Gypsum’’ from Turkey (₦2.21 billion) and China (₦1.03 billion), as well as “Other, including crude salt” (₦2.80 billion) from Brazil.
Manufactured Goods Sector
The value of manufactured goods traded in Q4, 2021 stood at ₦3,396.14 billion representing 29.01% of total trade. Of this, the export component accounted for ₦395.48 billion.
The major export goods in this category were “Floating or submersible drilling platform” exported to Namibia and Cameroon in values worth ₦264.54 billion and ₦0.79 billion respectively.
This was followed by “Aluminum alloys, unwrought” valued at ₦8.21 billion and ₦8.16 billion to Japan and China respectively and “Cigarettes containing tobacco” exported to Niger and Nauru valued at ₦4.29 billion and ₦2.61 billion respectively.
By region, manufactured goods were exported to Africa, Asia and Europe, valued at N302.04billion, N49.71 billion and ₦31.57 billion respectively. READ: Oil Export Drives 80% of FX Inflow as Nigeria Records Deficit in Q2
In terms of imports in the fourth quarter of 2021, manufactured goods were mainly imported were ‘’ Rolled iron/steel, width>=600mm, other Painted, varnished or coated with plastics’’ from China worth N88.23 billion.
Used Vehicles, with diesel or semi-diesel engine, of cylinder capacity,>2500cc’’ from United States, Italy and Canada valued at ₦70.48 billion, ₦3.59 billion and ₦2.05 billion respectively.
Machines 4 the reception, conversion & transmission or regeneration of voice, images were also imported from China (₦59.19 billion) and Sweden (₦2.55 billion).
Other goods imported in this category were ‘’Imported motorcycles and cycles, imported CKD by established manufacturers >50cc<=250cc’’ from India (₦39.92 billion) and Other instruments, appliances and machines for measuring or checking from China (₦54.61 billion).
Raw Material Goods Sector
The value of total trade of raw material stood at ₦792.33 billion in the fourth quarter of 2021 of which imports were valued at ₦543.87 billion while exports stood at ₦248.45 billion.
During the quarter, Urea whether or not in an aqueous solution was exported to Brazil at a value of ₦183.04 billion.
This was followed by Ammonium sulphate to Brazil valued at ₦14.09 billion and Technically specified natural rubber, in primary forms or in plates’’ exported to Spain valued at ₦1.08 billion.
In terms of imports, Cane sugar worth ₦85.31 billion was imported from Brazil this was followed by ‘’Milk preparations containing vegetable fats /oils, powdered/granular, packings => 25 kg imported from Ireland and Germany valued at ₦13.63 billion and ₦12.46 billion respectively.
Other products imported under this category was Mixtures of odoriferous substance imported from Ireland and Swaziland valued at ₦7.06 billion and ₦5.53 billion respectively.
Trade by Mode of Transport In the review quarter, the majority of commodities exported out of Nigeria were by the sea.
Maritime transport accounted for ₦5,733.86 billion or 99.43% of total exports. Road transport accounted for ₦6.02 billion or 0.10% while Air transport recorded ₦6.09 billion or 0.11%.
Similarly, maritime transport accounted for ₦5,638.90 billion or 94.92% of the value of total imports while Air transport accounted for goods valued at ₦263.17 billion or 4.43% of the value of total imports.
Trade by Custom Ports and Post
In Q4, 2021, the bulk of exports transactions were carried through Apapa Port with goods valued at ₦5,163.59 billion or 89.54% of total exports.
This was followed by Port Harcourt which recorded ₦398.14 billion or 4.6% of total export. In terms of imports, Apapa Port also recorded the highest transactions valued at ₦3,537.93 billion or 59.56% of total imports.
This was followed by Tin Can Island which accounted for goods valued at ₦774.18 billion or 13.03% while Port-Harcourt handled ₦457.07 billion or 7.69% of total imports.
