Summary: Nigeria has seen a decrease in both import and export values due to factors like currency devaluation, lower demand for goods, and global price fluctuations. Its agricultural products sector has also seen a decline in imports value and increase in exports.
Maintaining a balance between imports and exports is essential for any country, and Nigeria is no exception. It ensures economic stability, and the ability to meet the needs of its diverse population while harnessing resources for global competitiveness.
Nigeria’s main exports include crude oil, natural gas, cashew nuts, sesamum seeds and cocoa beans whilst the countryâs main imports include petroleum products, machinery and food products.
According to the most recent National Bureau of Statistics (NBS) report, total imports in the second quarter (Q2) of 2023 stood at â¦5.726 trillion and total exports stood at â¦7.016 trillion.
These numbers represent an increase of 2.99% for imports and 8.15% for exports, when compared to the values of the previous quarter Q1 2023 (â¦5.6 trillion and â¦6.5 trillion, respectively).
In terms of year-on-year comparison, both values decreased. Imports fell by 10.37% against the value recorded in the corresponding quarter of 2022 (â¦6.4 trillion) and exports by 5.20% ((â¦7.4 trillion).
Overall, there has been an increase in trade activity relative to Q1 2023. However, the prices of items have decreased, or the amount of goods Nigeria is exporting is less in quantity over the last year. It could also mean that Nigeria is exporting lower value goods.
Naira devaluation effects on import and export in Nigeria
One reason for these drop in value may be because of the decline in the value of Nigeria’s currency, as the naira has seen devaluation against the dollar, making exports more competitive on the global market.
Decrease of imports over the last year, when measured against the naira devaluation, could imply that Nigeria is spending more of its own currency to buy lesser amount of goods thus decreasing imports value. In addition, with inflation rising and its economy slowing down, there is lower demand for goods, hence, smaller quantity of imports.
Meanwhile, exports may have decreased as exporters will have to sell products at a lower price in order to compete with other exporters. Furthermore, if the global price of oil falls, the country would sell less oil for the same amount of money or sell at a reduced cost, decreasing export value. This happened in the second quarter of 2023 when crude oil prices fell.
Thus, a decrease in the value of imports and exports from a year ago is a negative sign for Nigeria’s economy. It appears to be slowing down and becoming less competitive in the global market.
For the agricultural sector, the value of imports of agricultural goods in Q2 2023 was â¦454.85 billion. This indicates a decrease of 3.51% and 2.07% when compared to the value recorded in Q1 2023 (â¦471.39 billion) and Q2 2022 (â¦464.45 billion), respectively.
For exports of agricultural goods, the value stood at â¦280.87 billion in Q2, 2023, showing an increase of 0.44% over the value recorded in Q1 2023 (â¦279.64 billion) and an increase of 98.12% when compared to the value recorded in Q2 2022 (â¦141.77 billion).
The increase in value of agricultural exports is impressive because it indicates that Nigeria is exporting more than it has in previous quarters. However, the negative difference (trade balance) is a cause of concern. For a country with so much arable land and a large population, it is still not reaching its potential.
