Nigeria’s trade sector has shown remarkable resilience and dynamism in the second quarter of 2023, despite economic challenges. Nigeria’s exports and imports in the second quarter of 2023 reveal some interesting trends and patterns in the country’s trade performance. According to a report from the National Bureau of Statistics, Nigeria’s total exports increased by 8.15 per cent in the second quarter of 2023 compared to the first quarter, reaching N7.015 trillion. It is also an improvement from the 5.2 per cent decline in exports in the second quarter of 2022. This indicates a positive growth in the country’s export earnings, which could boost its foreign exchange reserves and balance of payments. Moreover, the report indicates that Nigeria’s trade surplus surged to the highest in nearly four years in the second quarter of this year. Here are the highlights from the report.
Growth in non-oil exports
The main export products were petroleum oils and natural gas, accounting for 79.63 per cent and 9.11 per cent of the total exports respectively. Nigeria’s oil exports rose by 13 per cent in the second quarter of 2023 compared to the first quarter, driven by higher crude oil prices and increased production quota from OPEC. This shows that Nigeria’s economy is still heavily dependent on its oil and gas sector, which is vulnerable to fluctuations in global prices and demand. Despite the continuous increase in oil exports, this was not enough to offset the decline in non-oil exports. Some non-oil products, such as cocoa beans, sesame seeds, cashew nuts, rubber, and leather, recorded significant increases in their export values. Nigeria’s non-oil exports increased by 0.8 percent in the second quarter of 2023 compared to the first quarter, suggesting that Nigeria’s efforts to diversify its export base and explore new markets with its agricultural and industrial products are picking up. The growth in non-oil exports was driven by several factors, including the rising prices of commodities, and the government’s efforts to promote non-oil exports. Nigeria has implemented several policies to promote non-oil exports, such as providing tax breaks and subsidies to exporters and improving the infrastructure for exporting goods.
The recovery of the global economy is aiding Nigeria’s export
According to the report, the recovery of the global economy is one of the main factors that contributed to the increase in Nigeria’s exports. The global economy grew by 3.6 percent in 2022 and is expected to grow by 3.8 percent in 2023. This growth has led to an increase in demand for Nigerian exports, particularly non-oil exports. For example, the demand for Nigerian cocoa beans has increased due to the growing popularity of chocolate in the global market. The demand for Nigerian sesame seeds has also increased due to their use in food and industrial applications. The rising prices of oil and other commodities also contributed to the increase in Nigeria’s exports. The price of crude oil averaged $105 per barrel in the second quarter of 2023, up from $95 per barrel in the first quarter. This increase in the price of oil led to an increase in the value of Nigeria’s oil exports.
Nigeria’s top export destinations
The top export destinations for Nigeria’s exports were The Netherlands, The United States of America, Indonesia, France, and Spain, with a combined share of 44.23 percent of the total exports. This reflects Nigeria’s strong trade relations with these countries, especially in the oil and gas sector. However, the report also reveals that some emerging markets, such as India, China, Brazil, and South Africa, increased their imports from Nigeria in the second quarter of 2023. This indicates that Nigeria is expanding its trade network and tapping into new opportunities in these fast-growing economies. Meanwhile, Nigeria’s trade relations with China have been growing steadily, as China remains Nigeria’s largest trading partner and source of foreign direct investment.
On the other hand, Nigeria’s total imports increased by 2.99 percent in the second quarter of 2023 compared to the first quarter, reaching N5.73 trillion. This implies a slight rise in the country’s import expenditure, which could widen its trade deficit and put pressure on its exchange rate. The main import products were motor spirit ordinary, used vehicles, and gas oil, accounting for 21.5 percent, 12.82 percent, and 4.03 percent of the total imports respectively. This indicates that Nigeria’s domestic demand for fuel and transportation is high, but its local production and supply are inadequate. This could pose a challenge to the country’s energy security and environmental sustainability. The top import sources were China, The United States of America, Belgium, India, and The Netherlands, with a combined share of 60.05 percent of the total imports. It shows that Nigeria continues to depend on these countries for its essential goods and services, especially in the manufacturing and technology sectors. However, some regional partners, such as Ghana, Togo, Benin, and Cameroon, have increased their exports to Nigeria in the second quarter of 2023, indicating that Nigeria is strengthening its trade integration and cooperation with its neighboring countries.
