Key Highlights
- Total trade value was ₦6.57 trillion
- Total trade value fell by 8.9% from Q1 2018 but grew by 14.56% year on year.
- Total import value stood at ₦2.11 trillion.
- Import grew by 16.34% from Q1 2018 and 19.95% year on year.
- Total exports stood at ₦4.46 trillion.
- Exports declined by 4.89% from last quarter but grew by 43.83% year on year.
- Trade balance was in surplus of ₦2.3 trillion and increased by 8.36% from Q1 2018.
The National Bureau of Statistics (NBS) has released the Foreign Trade in Goods Statistics for the second quarter of 2018. The report reveals Nigeria’s total foreign trade was ₦6,569.98 billion for the second quarter of 2018 compared to ₦7,211.61 billion for the first quarter of the year 2018.
Total Imports
Total trade imports for the second quarter of 2018 was ₦2,106.7 billion, compare to ₦2,518.26 billion for Q1 2018 and ₦2,631.65 billion in the second quarter of 2017. It shows Nigeria’s total imports declined by 16.34% on a quarter on quarter basis and equally fell by 19.95% year on year.
- The value of imported agricultural goods in the Q2 2018 (₦224.52 billion) increased by 21.7% from Q1 2018 (₦184.49 billion) but fell by 3.14% from Q2 2017 (₦196.0 billion), while that of raw materials in Q2 2018 (₦284.81 billion) grew by 1.93% compared to Q1 2018 (₦279.41 billion) and by 9.89% compared to Q1 2017 (₦231.80 billion).
- Meanwhile, solid minerals imports (₦17.29 billion) increased by 37.0% on a quarter-to-quarter basis (₦12.62 billion) but decreased by 91% on a year-to-year basis (₦193.16 billion).
Total Exports
Total trade exports for Q2 2018 was 4,463.3 billion, compares to ₦4,692.86 billion for the first quarter of the 2018 and ₦3,102.14 billion in Q2 2017. The figures show Nigeria’s total exports fell by 16.34% on a quarter-on-quarter basis and equally dropped by 19.95% year on year.
- However, the export value for Agricultural goods in Q2 2018 (₦85.90 billion) was 17.3% higher than the value in Q1 2018 (₦73.24 billion) and 127.3% higher than the value recorded in Q2 2017 (₦37.79 billion) while raw material exports value decreased by 2.98% in Q2 2018 (₦31.72 billion) compared to Q1 2018 (₦32.70 billion) but increased by 19.7% when compared to Q2 2017 (₦26.50 billion).
- Solid Minerals exports value in Q2 2018 (₦19.93billion) recorded a 25.98% quarter on quarter decline (₦26.92 billion) and a 19.7% year on year decline rate compared to Q2 2017 (₦21.02billion).
- The value of Crude Oil exports recorded during the period under review (₦3,728 billion) was 4.2% higher than the value in Q1 2018 (₦3,579 billion) and 53.7% more than the value in Q2 2017 (₦2,425 billion).
- Other oil products exports in Q2 2018 (N516.32 billion) also grew steadily in the second quarter of 2018, with a 3.6% decline from Q1 2018 (535.68 billion) and a 0.8% growth from the value recorded in Q2 2017 (N512.41 billion).
Crude Oil still dominates as economy struggles
The NBS report indicates that Crude Oil is still the life wire of Nigeria’s trade sector, contributing 67.9% of the total trade in the second quarter of 2018 with a value of ₦3.73 trillion. With Crude Oil accounting for 83.54% of Nigeria’s total exports in Q2 2018, it is a clear indication that the Federal Government’s efforts to diversify the economy is not yielding the needed results. The share of Non-oil exports contribution to the total exports (₦218.42 billion) fell to 4.9% from 12.3% in the previous quarter.
Another source of concern in the report is the Manufacturing exports that shrank during the period under review. All these are ominous signs that the economy is still struggling.
India takes over
India surprisingly overcame Netherlands to become Nigeria’s leading export trading partner in the second quarter of 2018 with 16.9% share of her total export trade, though India’s total share fell from 18.2% in Q1 2018. The Netherlands dropped to the second position with a share of 10.25%. Spain was the third destination for Nigeria’s exports in Q1 2018 with a share of 8.3%, while South Africa jumped to the fourth position with 8.06%. The United States could only share 6.82% of Nigeria’s export in the quarter under review.
China maintains import lead
Meanwhile, China retained her position as Nigeria’s leading import partner with a share of 25.28% of her total imports in Q2 2018. Netherlands, Belgium, India and the United States followed with 8.59%, 8.11%, 6.88%, and 6.72% respectively.
Why it matters
- The decrease in exports means a reduction in the foreign exchange revenue for Nigeria. Nigeria’s external reserves have been on a free fall in the past few months and recently dropped below $47 billion for the first time in 4 months. This can be directly traced to the decline in exports value in Q2 2018.
- If the drop in export revenue persists in this third quarter of 2018, Nigeria may find it difficult executing part of the 2018 budget in Q3 and Q4 2018, since the budget is premised on an expected revenue of N7.2 trillion. Government may need to result to additional borrowing, in order to carry out some of their expenditures.
- Since Cashew nuts have become Nigeria’s biggest non-oil export product, it will translate to more income for Nigerian farmers who grow the cash crop companies that trade in Cashew.
- Solid Minerals exports declined by 25.98% quarter on quarter, this will also translate to lesser revenue for petroleum distillation companies who obtain Naphthalene from their distillation and other companies that export zinc ore, cement.
- Increase agricultural exports and others will lead to an increase in tariff generation for appropriate Government agencies.
- Since oil and gas exports, which contributed over 86% of the total exports grew in Q1 2018, it will lead to increase in foreign exchange earnings for Nigeria and more income for oil and gas companies.
