As Nigerians are seriously feeling the effects of the poorly planned and introduced cashless and Naira redesign policy of the Central Bank of Nigeria, it has been revealed that the country made significant gains from foreign trade.
The National Bureau of Statistics (NBS) revealed that improvements in foreign trade in 2022 yielded a foreign trade surplus of 162%
In spite of the weak value of the Naira, export earnings outweighed import bills by ₦1.2 trillion.
According to data obtained from the NBS, minerals export was the major item that pushed Nigeria’s goods trade surplus to ₦1.2 trillion in 2022 as export bills (₦26.8 trillion) outweighed import earnings (₦25.6 trillion) for the first time since the pre-COVID year (₦2.23 trillion in 2019).
NBS noted that the surplus in 2022 represents an improvement of over 162% compared to the 2021 goods trade deficit of ₦1.94 trillion.
Merchandise Trade
The positive trade balance was recorded during the period despite the weaker naira (9.09% y/y to ₦461.50 in 2022), weaker demand for export commodities, the effects of Russia’s invasion of Ukraine in 2022, which translated to weaker trade flows among nations, and the continued high costs of imports as companies became hard hit.
From the NBS report, Nigeria’s total merchandise trade in 2022 accelerated to ₦52.4 trillion from ₦39.75 trillion in 2021
Also, Nigeria’s total export value surged 42% to ₦26.8 trillion from ₦18.91 trillion in 2021.
The increase in total exports was higher than the total import value, which stood at ₦25.59 trillion (23% up from ₦20.84 trillion in 2021).
However, total trade declined by 4.52% in the fourth quarter to ₦11.72 trillion, relative to ₦12.27 trillion, as reported in the third quarter of 2022. As a result, the value of total exports exceeded the value of imports in the quarter.
An analysis of the data filed shows that Nigeria exported mainly ‘mineral products’ which amounted to ₦5.7 trillion or 89.11% of the total export value.
This was followed by “vehicles, aircraft, and parts thereof; vessels, among others,” which were valued at ₦199.29 billion or 3.13% of the value of total exports, and “products of the chemical and allied industries,” worth ₦169.27 billion or 2.66% of the value of total exports.
Dominated By Crude Oil Exports
Meanwhile, export value during the quarter was dominated by crude oil exports (₦4.9 trillion), which accounted for 77% of total exports.
Non-crude oil exports stood at ₦1.5 trillion or 22.76% of total exports, of which non-oil products contributed ₦732.24 billion, representing 11.51% of total exports.
For the import values, which declined 15.5% in the fourth quarter (Q4) to ₦5.4 trillion, there were mineral fuels (₦1.9 trillion)
There were also imported machinery and transport equipment (₦1.3 trillion), chemicals, and related products (₦694.68 billion).
According to the NBS, the value of imported manufactured goods in the quarter under review stood at ₦2.5 trillion, a decrease of 14.11 percent as compared to the value recorded in Q3, 2022 (₦2.9 trillion).
This value also declined by -18.43% when compared to the value recorded in Q4 of 2021 (₦3 trillion).
Meanwhile, the value of other oil product imports in the fourth quarter of 2022 stood at ₦1.9 trillion. That indicates a decline of 18.18% from the value recorded in Q3, 2022 (₦2.3 trillion).
However, that is an increase of 10.40% compared to the value recorded in the corresponding quarter of 2021 (₦1.7 trillion).
Major Trading Partner
Nigeria’s major trading partners in the review period were China and Belgium, while exports went to Spain and the Netherlands.
The two major agricultural products traded were superior-quality cocoa beans and sesame seeds.
“We note that Nigeria’s trade balance can be further improved through policies aimed at export promotion, especially for non-oil exports.
“This can be achieved if the Federal Government creates an enabling business environment to improve trade and exports, just as seen in the recent rise in the trade balance,” the analysts stated in a note to client.
The analysts added that the pressure on the Nair was as a result of the devaluation, rising inflationary levels, and the headwinds faced by the global trade in 2022.
The headwinds came as a result of slowing economies and supply chain congestion globally.
All of these have brought about the shrinkage recorded in the total trade balance for Nigeria.