Nigeria’s trade balance in 2020 closed with the highest deficit in the fourth quarter (Q4). During the year, the country imported goods worth N19.89 trillion and its export closed at N12.52 trillion, thereby incurring a trade deficit of N7.37 trillion for the period.
All through 2020, the highest deficit was recorded in the fourth quarter.
Data from the Nigerian Bureau of Statistics (NBS) showed that trade deficit increased with each successive quarter of the year. The deficit margin grew from N329.92 billion (N0.33 trillion) in the first quarter to N2.73 trillion in the fourth quarter.
| Year 2020 | Export (N trillion)(A) | Import (N trillion)(B) | Balance of Trade (N trillion) (C) = (A-B) |
| Q1 | 4.10 | 4.43 | -0.33 |
| Q2 | 2.22 | 4.14 | -1.92 |
| Q3 | 2.99 | 5.38 | -2.39 |
| Q4 | 3.19 | 5.92 | -2.73 |
| Total | 12.52 | 19.89 | -7.37 |
Trade deficit occurs when the money value of a country’s import exceeds its exports, while a trade surplus means exactly the opposite. In the first quarter of 2020, Nigeria had a trade balance deficit of N329.92 billion. By the end of Q2, the figure increased to N1.92 trillion. The deficit worsened in the last two quarters as the figure increased to N2.39 trillion in Q3, and increased further to N2.73 trillion in Q4.
The data reviewed showed that in the fourth quarter of 2020, motor spirit topped the items of goods imported into the country. It was worth N573.69 billion, and accounted for 9.7% of total imports. Vaccines imported was 6.7% in second place and durum wheat (not in seed) was third place, covering 4.33%.
Imported items inflow shows that most of the import items came in from China. In the last quarter of 2020, China accounted for more than one-quarter of Nigeria’s total imports. That is, for every four dollars Nigerians spent on imports, one dollar was paid to China. Total goods from China was worth N1.675 trillion (28.3%) in that quarter.
Imports from India made up 8.54% of the total while those from the US accounted for 7.57%.
|
Ranking |
Products |
Value (B’₦) |
% Share of Total Exports |
|
1st |
Petroleum oils and oils obtained from bituminous minerals, crude |
2,521.35 |
78.93 |
|
2nd |
Natural gas, liquefied |
370.88 |
11.61 |
|
3rd |
Floating or submersible drilling or production platforms |
86.95 |
2.72 |
|
4th |
Other petroleum gases etc in gaseous state |
48.59 |
1.52 |
|
5th |
Urea, whether or not in aqueous solution |
29.09 |
0.91 |
|
6th |
Sesamum seeds, whether or not broken |
27.29 |
0.85 |
|
7th |
Helicopters of an unladen weight exceeding 2000kg |
10.46 |
0.33 |
|
8th |
Propane, liquefied |
10.09 |
0.32 |
|
9th |
Dredgers |
7.24 |
0.23 |
|
10th |
Leather further prep after tanning/crusting, incl.parchment-dressed leather of sheep/lam |
6.73 |
0.21 |
Source: NBS
Data revealed that China did not buy much from Nigeria in the fourth quarter. China’s total purchases from Nigeria made up 4.9% of all exports from Nigeria, while Nigeria’s purchases from China was 28.3% of all its imports.
India, however, could be described as Nigeria’s best business partner in the fourth quarter of 2020. Most of the export from Nigeria went to India, with 17.12% of Nigeria’s export going there. This means that for every hundred naira that Nigeria received from its exports, seventeen naira was received from India.
Overall, trade data reviewed indicates that Nigeria may have to improve on its export items aside from petroleum products to enhance its trade balance.