Nigeria Records Massive Trade Deficit In Q3

Nigeria posted a massive trade surplus in the third quarter, which along with the recession, made it a double whammy of economic problems.

While the value of total trade up till September stood at N23.2trillion, trade in third quarter was N8.37trillion.

The value represents an increase of 34.15 per cent over Q2, but it marked a decline of 8.85 per cent compared to Q3 last year.

However, the components of the trade volume and our major trading partners should send alarms ringing in Aso Rock.

While Nigeria enjoyed favourable trade with India, it did not enjoy the same with China.

The report published by National Bureau of Statistics (NBS), yesterday, showed China as a major exporter to Nigeria, accounting for 31 percent of all Nigeria’s imports.

Unlike India, which imports 16.73 percent of Nigerian goods, China was not listed among the top five major export trading partners of Nigeria.

It was only a major force, exporting its own goods to Nigeria.

According to NBS, the import component of the N8.37trillion total trade for the quarter was N5.38trillion.

Exports stood at N2.9trillion, creating a deficit of N2.38trillion.

“This also represents the widest merchandise trade deficit since 2017”, the National Bureau of Statistics said.

“When compared to the deficit of N1,803.3billion recorded in Q2, the Q3 deficit rose by 32.45 per cent”, it added.

Also noteworthy, according to NBS report, crude oil, accounted for 81 per cent of the N2.9trillion total value of exports.

In figure terms, oil export value for the quarter was N2.4trillion, while non-crude oil was valued at N568.2billion, or 18.98 per cent of total export during the review period.

The report also shows that the volume of imports for agricultural products, solid minerals, manufactured goods and raw materials all increased during the period.

The only decline in import category was energy products, which must have occurred because of the lockdown imposed over Covid-19 pandemic.

“The value of Energy goods imports decreased by 53.69 per cent in Q3, 2020 compared to Q2, 2020 and a considerable decline of 69.06 per cent year-on-year”, the NBS reported.

Despite that Nigeria recorded a trade imbalance in the quarter, total exports was 34.85 per cent higher compared to Q2.

However, it was 43.41 per cent less than in comparative period of 2019.

While crude oil and solid minerals exports grew during the quarter, agricultural, raw materials exports all declined.

Another interesting aspect of the report was the destination of Nigeria’s exports and country of origin of imports.

India, Spain, Netherlands, South Africa and Turkey were Nigeria’s important export trading partner for the quarter.

China led Nigeria’s major import trading partners, followed by USA, Netherlands, India and Belgium.