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Amidst falling merchandise trade, Nigeria can still be hopeful

Nigeria in 2016 Special Edition

By Timothy Adaka

The falling price of crude oil in the international market resulting in dwindling exports value for Nigeria whose major exports is crude oil has resulted in further drop in the value of merchandise trade, which is the total value of all imports and export recorded in a given period.

Nigeria’s merchandise trade for Q3 showing breakdown of imports and exports in Nbillion.
Yearly value of Nigeria’s merchadise imports and exports in Nbillion.

The total value of Nigeria’s merchandise trade as at third quarter, Q3 2015 stood at N4.02tr. This represents a decline of N351b or 8% from the preceding quarter Q2, 2015 value of N4.37tr. When matched year on year to Q3, 2014 value of N6.52tr, it denotes a significant drop of N2.5tr or 38.3%. This can easily be adduced to value of crude oil in the given periods, Q3, 2014 and Q3, 2015 and a fall in volume of export in Q3, 2015

Nigeria’s yearly merchandise trade in Ntrillion.
Nigeria’s top 5 export trading countries for Q3 in 2015 in Nbillion.

Using Q3 trend analysis, statistics showed that the value of Q3, 2015 of N4.02tr is the lowest value recorded since 2009.

Given the systematic fall in crude oil prices internationally coupled with the supply glut, and the dearth of foreign exchange in the country affecting the volume of imports, one can conclude that Nigeria’s Q4 2015 value of merchandise trade is heading for an all-time low. Taking the total value of trade as at 30th September, 2015 of N12.77trillion and compared to the corresponding period of 2014 of N18.69tr, there is a huge lacuna of N5.92tr or 31.67%.

Nigeria’s top 5 merchandise imports partners for 3rd quarter, 2015 in Nbillion.
Nigeria’s Q3 2015 top five crude oil exporting partners in Nbillion.

Despite a slight upward movement in merchandise import of N1.69tr for Q3, 2015 from N1.49tr value of Q2, 2015, the sharp downward slide in the value of merchandise export of Q3, 2015 value of N2.33tr from Q2, 2015 value of N2.88tr which represents a value drop of N546b or 18.96% accounted for the overall decline in the value of merchandise trade in the period.

Nigeria’s Q3 2015 top five non-oil exporting partners in Nbillion.

Data obtained from the Nigeria Bureau of Statistics, NBS shows India represents the largest recipient of Nigeria’s exports with a value of N408b in the Q3, 2015. However, crude oil exports represent N383b or 93.87%, while non-crude export accounted for N25b or 6.13%

China is the major beneficiary to Nigeria’s import value with an import value of N459b in Q3, 2015. Imports from China alone represents 27.2% of total imports value.

In terms of crude oil exports in Q3 2015, India represents Nigeria’s top buyer with a value of N383b or 23.8%, while Great Britain tops the non-crude oil exports with a total value sum of N107b or 14.84%.

With Nigeria seemingly aiming to look inward by systematically limiting importations and boosting local contents, while boosting its export potentials, we hope to see a better outlook for 2016.

Published in the Business Eye’s print version, Jan 2016 edition.

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