Economy | Nigeria Economy

A Return to Trade Surplus in 2022

Mar 14, 2023   •   by   •   Source: FBNQuest   •   eye-icon 126 views
The most recent report on foreign trade in goods from the National Bureau of Statistics (NBS) shows that the total value of Nigeria’s merchandise trade declined by -5% q/q to NGN11.7trn in Q4 ’22. The decline in merchandise trade value was due to a -16% q/q reduction in the value of imports to NGN5.4trn. In contrast, the value of exports increased by 7% q/q to NGN6.4trn. Consequently, the trade balance showed a net surplus of NGN997bn. The NBS series is compiled from data provided by the Nigerian Customs Service (NCS) and other government agencies.


The Q4 ’22 trade position implies a total merchandise trade of NGN52.4trn in 2022, representing a y/y increase of 32%.


A breakdown shows total imports and exports of NGN25.6trn and NGN26.8trn, up 23% and 42% y/y respectively, and a trade surplus of NGN1.2trn.


In line with historical trends, crude oil exports accounted for 79% of export value in 2022. If we include the export of other oil-related products, the combined share rises to c.90.5%.


Export receipts from crude oil increased 46% y/y to NGN21.1trn, thanks to higher crude oil prices which averaged around USD105/ barrel in 2022 compared with USD71/ barrel in 2021.


As such, non-oil related exports accounted for NGN2.5trn or 9.5% of total export receipts.


Combined raw materials accounted for the largest share of non-oil related exports at 3.8%. Manufactured goods and agriculture products were second and third respectively at 2.9% and 2.2% of total.


In terms of import composition, fuels, and lubricants accounted for the largest share (39%) of imports by value at NGN10.0trn, representing a 58% y/y increase.  


Other top products on the import list include industrial supplies and import of capital goods and equipment which accounted for c. 20.7% and 15.9% of total imports.


A consistent read across from the foreign trade data is the lack of diversification of Nigeria’s external trade position, particularly in terms of exports.


To achieve proper export diversification, Nigeria must strengthen its manufacturing sector by improving key critical infrastructure required for industrialisation with the goal of lowering production costs and improving product quality to minimum global standards.


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