Nigeria’s total foreign trade for the third quarter of 2020 rose to N8.4 trillion compared to N6.24 trillion recorded in the preceding quarter.
This represents a 34.15% increment in the total foreign trade of Africa’s largest economy.
This is contained in the recently released foreign trade report by the National Bureau of Statistics (NBS).
According to the report, total imports stood at N5.38 trillion in Q3 2020, representing a 33.77% increase compared to N4.02 trillion recorded in Q2 2020. It also increased by 38.02% compared to N3.89 trillion recorded in the corresponding period of 2019.
Total export (N2.99 trillion) was 34.85% higher in Q3 2020 than N2.22 trillion recorded in Q2 2020, but 43.41% less than in N5.29 trillion recorded in Q3 2019.
Analyst at Nairametrics indicated that the increase in import in the third quarter can be attributed to the relaxation of lockdown and travel restriction that was initially placed across the nation in the previous quarter.
Due to lower exports and higher imports, the trade balance recorded a deficit of N2.39 trillion during the third quarter. This also represents the widest merchandise trade deficit since 2017. When compared to the deficit of N1.8 trillion recorded in Q2, the current period deficit rose by 32.45%.
A cursory look at the data shows that, though crude oil exports increased by 56.04% compared to the previous quarter, non-crude oil exports dipped by 14.64% in the same period. Notably, crude oil exports stood at N2.42 trillion in the review period as against N1.55 trillion recorded in Q2 2020.
Also, non-crude oil exports stood at N568.2 billion in Q3 2020, a decline compared to N665.6 billion recorded in Q2 2020 and a further decline compared to N1.54 trillion recorded in the corresponding period of 2019 (Q3).
In the review period, Nigeria’s major export trading partners include; India, Spain, Netherlands, South Africa, Turkey, while import trading partners include; China, United States, Netherlands, India, and Belgium.
India accounted for 16.73% (N500.6 billion) of the total value of exported goods, followed by Spain with N328.5 billion (10.97%) and the Netherlands with N227.8 billion (7.61%). Others include South Africa with N203.9 billion (6.81%) and Turkey N150.01 billion (5.01%).
On the other hand, China accounted for 30.51% (N1.64 trillion) of Nigeria’s total import followed by the United States with N482.3 billion (8.96%). Netherlands, India, and Belgium made up the rest of the list with N443.5 billion (8.24%), N354.1 billion (6.58%), and N212.3 billion (3.95%).
Nigeria recorded a negative trade balance in Q3 2020, representing the fourth consecutive record of trade deficit, which will further dampen the country’s current account deficit as the demand for foreign currency exceeds the demand for our local currency hereby affecting our foreign exchange.
On November 11, 2020, Nigeria ratified its membership of the African Continental Free Trade Area (AfCFTA) due to kick start in January 2021.
This came after an initial reluctance of the largest economy in the region to join the bloc for fear of exposing local industries to dumping by countries outside Africa.
The ratification of Nigeria will further strengthen the AfCFTA agreement and boost intra-African trade.
The current report released by the NBS, showed that Nigeria imports N175.4 billion worth of goods from the African region in Q3 2020.
In the same period, Nigeria exports N442.3 billion worth of goods to the African region, the third largest destination of Nigeria’s export by region.
