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Nigeria’s total foreign trade drops to N6.24 trillion in Q2 2020, export plunges by 52%

Total import for the period stood at N4.02 trillion while total export was N2.22 trillion.

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Nigeria's foreign trade drops to N6.24 trillion, trade balance hits N1.8 trillion deficit in Q2 2020, Nigeria's current account worsens

Nigeria’s total foreign trade (import and export) drops by 27.46% year on year in Q2 2020, when compared to N8.61 trillion recorded in the corresponding quarter (Q2) of 2019. This is according to the latest foreign trade report, released by the National Bureau of Statistics.

According to the report, Nigeria’s total export during the quarter nosedived by 51.7% to stand at N2.22 trillion, a significant fall when compared to N4.59 trillion recorded in Q2 2019 and N4.08 trillion recorded in the previous quarter.

The report also showed that Nigeria’s total foreign trade recorded a decrease of 27.3% when compared to N8.59 trillion recorded in previous quarter (Q1 2020). A decline, which is a reflection of the disruptions caused by the COVID-19 pandemic.

READ: Dangote Cement posts N126.41 billion profit in H1 2020

Key Highlights

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  • The value of total trade fell sharply by 27.30% in Q2 2020 compared to Q1, 2020 and 27.46% compared to Q2 2019
  • The value of total imports dropped by 10.69% in Q2 2020 against the level recorded in Q1 2020 but increased by 0.39% year-on-year
  • Imported Agricultural goods rose in value by 59.01% in Q2 2020 compared to Q1 2020 and 66.28% compared to the corresponding quarter in 2019.
  • Total exports dipped by 45.64% when compared to Q1 2020 and 51.73% as against N4.6 trillion recorded in Q2 2019.
  • Agricultural goods export also dropped 38.2% in Q2,2020 compared to Q1, 2020 but rose 6.3% year-on-year.

READ: UPDATED: Nigeria received $1.29 billion capital inflows in Q2 2020, down by 78.6%

 

Export plunges further as trade balance hits N1.8 trillion deficit

Nigeria has recorded a third consecutive decline in the value of total export during the quarter, declined by 45.64% and 51.73% compared to N4.08 trillion recorded in Q1 2020 and N4.59 trillion recorded in Q2 2019 respectively.

  • Crude oil exports accounted for 70% (N1.55 trillion) of the total value of exports in Q2 2020.
  • Also, Crude oil exports decreased in value by 47.2% in Q2 2020 compared to Q1 2020 and 60.5% year-on-year.
  • Further checks by Nairametrics, shows that the latest crude oil export is the lowest recorded in the past four years. The last time a lower value was recorded was in Q2 2016 (N1.49 trillion).
  • In Q2 2020, a third streak of negative trade balance was recorded, stood at (N1.8 trillion).
  • Manufactured goods export decreased in value by 42.8% in Q2 2020 against the level recorded in Q1 2020 but increased 139.6% compared with the corresponding quarter in 2019.
  • Analysis of export by Region revealed that Nigeria exported most products to Europe (N976.5billion or 44%), followed by Asia (N734.1billion or 33.08%), Africa (N401.4billion or 18.1%), America (N105.8billion or 4.8%) and Oceania (N1.7billion or 0.08%).
  • Within Africa, goods worth N149.3billion were exported to ECOWAS member states.
  • All regions recorded declines in the value of exported goods during the quarter, although China and Japan each recorded increased export activity.

READ ALSO: Nigerian Banks issue N3.3 trillion in new loans in June 2020

How it affects Nigeria’s economy

The latest report gives a full reflection of the disruptions caused by the COVID-19 pandemic and how travel and movement restrictions placed by various countries of the world has affected Nigeria’s international trade.

  • The decline in crude oil exports will affect Nigeria’s revenue as the Nigeria is still largely an oil-dependent economy.
  • Meanwhile, the report reveals that Nigeria is importing more than it is exporting, giving that the federal government closed land borders in 2019 in order to discourage importation. Although, a further plunge in trade balance puts the policy under serious scrutiny.
  • It should be noted that the significant decline in most activities is attributed to the lockdown procedures put in place by the government and restrictions placed on international travel by most countries.

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Economy & Politics

Godwin Obaseki wins Edo State governorship election

Incumbent governor, Godwin Obaseki emerged winner in the Edo State gubernatorial election.

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Oil theft gulped $1.35 billion in first six months - Obaseki 

Independent National Electoral Commission(INEC) has declared Godwin Obaseki the winner of the Edo State gubernatorial election today.

Mr. Obaseki will return as the Governor of the state for a second term.

The results were declared by INEC on Sunday afternoon after the results were counted from all LGA’s on Saturday.

Obaseki had 307,955 votes, which was enough to be declared a clear winner over Ize-Iyamu’s 223,619 votes.

Obaseki took to his Twitter handle to thank the people of Edo State for their votes. He stated,

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“Words fail me in saluting our teeming supporters who displayed immense courage in the face of threats, intimidation and brutalization. The collective will of Edo people made it possible for us to triumph over godfatherism. Congratulations to all Edo people. This is our victory!”

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Around the World

WTO: Okonjo-Iweala still in contention as 3 candidates depart race for DG

Okonjo-Iweala and the remaining 4 other candidates hope to succeed the current DG, Mr Roberto Azevêdo.

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Ngozi Okonjo Iweala, World Bank, Davos, World Economic Forum, WTO accepts nomination of Okonjo-Iweala as DG despite opposition from Egypt

Three candidates running for the post of the Director-General of the World Trade Organisation have fallen out of the race after failing to secure enough votes in the first rounds of voting, leaving only 5 candidates left, including Nigeria’s Ngozi Okonjo-Iweala.

This was disclosed by Bloomberg on Thursday, before the meeting on Friday. The Candidates that are out of the race are Jesus Seade (Mexico), Tudor Ulianovschi (Moldova), and Hamid Mamdouh (Egypt). The candidates were not able to secure the support needed for the first round of 3 rounds of voting.

READ: China’s Covid-19 vaccine may be ready for general public in November 2020

Dr. Ngozi Okonjo Iweal joins 4 other candidates for the next round of voting. The candidates are; Liam Fox (UK), Amina Chawahir Mohamed Jibril (Kenya), Yoo Myung-hee ( South Korea), and Mohammad Maziad Al-Tuwaijri ( Saudi Arabia).

Ngozi Okonjo-Iweala disclosed last month some of her plans for the Organization if made President. Nairametrics reported she noted that part of her vision is to build a trade institution where there is greater trust among its members. She also stressed that the WTO, at this critical time, is needed to ensure that trade and global markets remain open.

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READ: Soybean Futures reach 2-year high, following U.S sales to China 

On healing the rift between the US and China, Okonjo-Iweala admitted that it is going to be challenging and not be easy. She said:

Well, this is not going to be easy, if it was easy, it could have been done a long time since. So it would be very challenging but it is not an impossible job. It is very clear that both the US and China have been helped and benefitted from the multilateral trading system in the past. Hundreds of millions have been lifted out of poverty. They have experienced shared prosperity in the economies and their countries.’

She added she would listen to both countries to find out what really are the issues causing distrust among them. She said that she will not want to be involved in the larger political problems, but will rather separate the trade issues and focus on them and build this trust.

READ: Amaechi pleads with NASS to halt questioning of loan agreement with China

You need to begin to find areas where there can be confidence-building and trade. Building trust is not talking about it, you have to have areas where both can work together and agree and we have a golden opportunity in the fisheries subsidies negotiations that are going on now because the US is a party to it, China is a party, the EU, all other members,’’ she said.

Okonjo-Iweala and the 4 other candidates will present themselves to the members of the global trade body for the later stages of voting in the hopes of securing the highest number of votes to succeed the current DG, Mr. Roberto Azevêdo.

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Economy & Politics

FG to establish a new anti-corruption agency

Malami disclosed that the new anti-corruption agency would be called Proceeds of Crime Recovery and Management Agency.

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FG to establish a new anti-corruption agency, P&ID, FG, malami, $9bn fine is a scam - Federal Government , UPDATED: P&ID operations shut down, assets forfeited by court order

The Federal Government has approved the establishment of a new anti-corruption agency that will have the responsibility of properly managing and coordinating all assets seized domestically or returned from abroad, following anti-corruption probes.

The disclosure was made by the Attorney General and Minister for Justice, Abubakar Malami, while briefing state house correspondents after the Federal Executive Council (FEC) meeting on Wednesday, September 16, 2020.

Malami explained that the recovered assets had been scattered across several agencies and that better coordination would encourage international/overall coordination in recovering more looted assets.

Nigeria has repatriated well over $300 million of looted funds this year alone and seized about $40 million worth of jewellery belonging to the former Minister for Petroleum, Diezani Allison-Madueke. This is in addition to the seized ill-gotten properties and real estate.

(READ MORE: Nigeria Customs Service to distribute N3.2 billion worth of food items)

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The Attorney General said that this new initiative would create a one-stop-shop for managing seized assets in an open and accountable way. He called the plan the next level of transparency and said the agency could also give the Ministry of Finance, Budget, and National Planning a budget for recovered assets.

He disclosed that the new anti-corruption agency, which would be called Proceeds of Crime Recovery and Management Agency, is to be saddled with the responsibility of managing the assets that constitute the proceeds of crime in the country. He said that the FEC had approved the transmission of a bill, ‘Proceeds of Crime Recovery and Management Agency Bill,’ to the National Assembly.

READ: OmiseGO, fastest growing altcoin, up 49% in past 24 hours

Malami noted that setting up an agency like this had become quite imperative in a bid to consolidate on the gains achieved so far in the government’s war against corruption.

The fight against corruption in the country has not been an easy one, as even a US senator, Chuck Grassley, earlier this year, raised concerns about the return of money due to worries over whether there were proper safeguards to prevent further misappropriation or relooting of those recovered funds.

READ: Exclusive: Best bank in Nigeria judging by the numbers 

The Economic and Financial Crime Commission (EFCC), which currently has the responsibility of managing its recovered or seized assets, has been bedevilled by a lot of controversies recently, following the accusation and subsequent suspension of its Ag. Chairman, Ibrahim Magu.

This follows the Minister of Justice’s accusation of the agency for diversion of funds that had been recovered during corruption investigations.

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