Nigeria expanded its negative trade balance in the first half of 2021, when the trade deficit rose to N5.81 trillion over the period.
That’s according to data from the recently released report on foreign trade from the National Bureau of Statistics (NBS).
The report found that Nigeria exported total goods worth N7.99 trillion in the reporting period, as opposed to a total import value of N13.8 trillion, suggesting a trade balance of -N5.81 trillion between January and June 2021.
This is due to recurrent trade deficits recorded in previous periods of N2.25 trillion in H1 2020 and N5.12 trillion in H2 2020. However, this is by far the highest trade deficit Nigeria has recorded in half a year. year period.
The huge trade deficit is the result of the significant increase in the value of imports, which recorded a 22% growth in H1 2021 compared to N11.31 trillion recorded in the previous period and an increase of 60.7% compared to N8.59 trillion in H1 2020
Despite recent data indicating improved cross-border trading activity, it is increasingly becoming a major forex burden for the country as scarce forex is still used to import goods, while export earnings continue to decline.
Nigeria imported Motor Spirit Ordinary (gasoline) worth N1.47 trillion between January and June 2021, followed by durum wheat at N583.02 billion during the same period. Nigeria imported used vehicles worth N498.94 billion, other antibiotics (N480.98 billion), gas oil (N273.41 billion) and receiving machines (N261.73 billion).
Others include motorcycles and bicycles N213.3 billion, cane sugar (N204.91 billion), other herbicides (N145.51 billion), lube oils for blending, N140.42 billion.
Nigeria exported crude oil worth N4.08 trillion in the second quarter of the year, bringing total exports in the six-month period to N6.01 trillion, followed by liquefied natural gas at N887.2 billion, floating ships N152, 95 billion, other petroleum gases N121.28 billion, well-fermented Nigerian cocoa beans with N86.99 billion.
Others on the list include helicopters, sesame seeds, cashews, urea and propane. Nigeria’s ongoing foreign trade deficit continues to weigh on the country’s exchange rate as negative trade dampens Nigeria’s current account and foreign reserves.
Despite measures taken by the federal government and the Central Bank (CBN) to diversify the economy and create a substitute crude oil export value, this does not appear to have been substantially reflected in Nigeria’s international trade figures.
A cursory glance at the data showed that crude oil still accounted for 90% of Nigeria’s export value in the first half of 2021, following multiple investments in other sectors of the economy to ensure local production, especially in the agricultural sector.