Nigeria’s total foreign trade for the fourth quarter (Q4) of 2020 rose to N9.12 trillion, representing an increase of 8.88% compared to N8.38 trillion recorded in the previous quarter.
This is according to the foreign trade report, recently released by the National Bureau of Statistics (NBS).
According to the report, total imports stood at N5.93 trillion, 10.1% increase compared to N5.38 trillion recorded in Q3 2020, while total export rose by 6.72% from N2.99 trillion to N3.19 trillion.
Also, Nigeria’s trade balance plunged further by 14.3% from a N2.39 trillion deficit recorded in the third quarter of 2020 to N2.73 trillion deficit in Q4 2020.
- Energy goods imported increased by 236.20% in Q4 2020 compared to Q3 2020 but dropped by 24.1% when compared to Q4 2019.
- The value of other oil products imported in Q4 2020 increased by 17.40% compared to Q3 2020 but was 3.23% less than recorded in Q4 2019.
- Agricultural products imported increased by 5.75% in Q4 2020 than Q3 2020 and was 128.17% higher compared with the corresponding quarter of 2019.
- Raw materials exported in Q4 2020 rose by 317.6% than recorded in Q3 2020 and was 122% higher than the value exported in Q4 2019.
- Exported energy goods increased by 13.3% in Q4 2020 compared to Q3 2020, but declined 15.5% when compared to the value exported in the corresponding quarter in 2019.
- The value of crude oil exported increased by 4% in Q4 2020 compared to Q3 2020 but decreased by 30.5% compared to Q4 2019.
Although Nigeria’s total foreign trade in Q4 2020 was the highest in 2020, the economy reached another highest trade deficit in Q4 2020 (-N2. 73 trillion) since it came out of recession due to the faster growth in its imports than exports.
A further look at the data shows that crude oil exports, which contribute the highest to total exports increased by 3.98% between Q3 2020 and Q4 2020 while the non-crude oil exports and non-oil exports rose by 18.37% and 12.14% respectively.
Top trade destinations
In Q4 2020, Nigeria’s major export trading partners were India, Spain, South Africa, Netherlands, and United States; while the major import trading partners during the period were China, India, United States, Netherlands, and Denmark.
India accounted for 17.12% (N547.01 billion) of total merchandise exported in Q4 2020, followed by Spain with N313.38 billion (9.81%) and South Africa with N256.65 billion (8.03%). Others on the list were Netherlands with N194.5 billion (6.09%) and the United States with N170.36 billion (5.33%).
On the other hand, Nigeria imported merchandise worth N1.68 trillion from China in Q4 2020 (28.28%), followed by imports from India worth N506.01 billion (8.54%) and the United States worth N448.64 billion (7.57%). Other major import trading partners are Netherlands with N424.49 billion (7.16%) and Denmark with N319.96 billion (5.40%).
Top Nigeria’s export by region
- Asia – N1.16 trillion (36.3%)
- Europe – N1.07 trillion (33.5%)
- Africa – N551.1 billion (17.3%)
- America – N376.4 billion (11.8%)
- Oceania – N36.7 billion (1.1%)
Top Nigeria’s import by region
- Asia – N2.85 trillion (48.6%)
- Europe – N2.16 trillion (36.5%)
- America – N702.5 billion (11.86%)
- Africa – N190.1 billion (3.21%)
- Oceania – N22.5 billion (0.38%)
Implications for the Nigerian economy
- Despite the growth in Nigeria’s total trade in Q4 2020, the economy sank deeper in trade deficit which signals the country’s inability to finance her foreign spending with its foreign earnings.
- Although oil prices have recovered in recent weeks, the value of Nigeria’s total exports is still largely determined by oil which means the stability of Nigeria’s foreign reserve will still be largely determined by the volatility of the oil prices.
- The value of agricultural exports increased by 19.2% which is in line with the 2.17% annual growth rate seen in the agricultural sector in 2020, indicating the growth in the Nigerian agricultural sector.