Nigeria recently reported a ₦6.94 trillion trade surplus for Q2 2024, a positive sign for exports.
However, Pol Eco Analytics is warning that this surplus doesn’t guarantee broader economic improvement.
High unemployment and living costs still challenge the country’s economic growth.
In Q2 2024, Nigeria reported a ₦6.94 trillion trade surplus, which appeared promising.
In fact, the National Bureau of Statistics (NBS) released the report, showing that the country’s exports exceeded its imports.
However, despite the positive numbers, the economic reality remained complicated.
Pol Eco Analytics, a Nigerian think tank, quickly stepped in with a call for caution.
In a statement, Adefolarin A. Olamilekan, a Senior Researcher and Policy Analyst, explained that a trade surplus was promising.
However, it does not automatically mean the economy is improving for everyone, he emphasised.
“A surplus shows we are exporting more than we are importing,” he said.
“But it doesn’t solve the issues of high living costs or make doing business easier.”
The NBS report revealed that Nigeria’s total trade for Q2 2024 reached ₦31.89 trillion.
This was a slight drop of 3.76% from Q1, but a significant jump of 150.39% compared to the same period in 2023.
Exports alone accounted for ₦19.42 trillion, which made up 60.89% of total trade.
Exports rose by 1.31% compared to Q1 2024 and by a massive 201.76% compared to Q2 2023.
However, the overall situation wasn’t as simple as it seemed.
The Trade Surplus: A Sign of Resilience, But Not Enough
Pol Eco Analytics acknowledged the ₦6.94 trillion trade surplus as a sign that Nigeria’s economy had some resilience.
Read Also; Nigeria Records ₦3.5trn Trade Surplus In 9 Months -NBS
However, they stressed that a trade surplus doesn’t guarantee overall economic health.
Similarly, a trade deficit doesn’t always mean economic weakness.
Adefolarin urged Nigerian policymakers to focus on creating better fiscal and monetary policies to stabilise prices.
He also advised them to avoid the risks of imbalanced budgets.
Also, he emphasised the importance of smart investments from any financial gains, whether from surpluses or deficits.
The broader economic picture wasn’t as rosy.
Nigeria’s real GDP growth was only around 2.6%, unemployment was at a worrying 37%, and 38.8% of the population was living in poverty.
Despite the positive trade numbers, the country is facing a serious cost of living crisis.
As a result, Pol Eco Analytics called for urgent government action.
They want President Tinubu and his team to invest in sectors that could make Nigeria more export-oriented.
Diversifying the economy beyond oil and gas was crucial to achieving long-term growth.
Also, the NBS report highlights the importance of crude oil exports, which made up ₦14.56 trillion (74.98%) of total exports.
Non-crude oil exports amounted to ₦4.86 trillion, while non-oil products contributed ₦1.94 trillion, or just 10.01% of total exports.
Key export partners during Q2 2024 included Spain, the U.S., France, India, and the Netherlands.
On the import side, China was Nigeria’s top trading partner, followed by Belgium, India, the U.S., and the Netherlands.
