Nigeria's merchandise trade rises in Q3

Nigeria's total merchandise trade saw a significant 16% increase in the third quarter, driven by a surge in exports, particularly in crude oil sales to India and the United States. The National Bureau of Statistics released data highlighting a 29% climb in exports during the same period, showcasing the crucial role of crude oil in Nigeria's export industry. Oluwaseun Longe, a Research and Market Intelligence Officer at Diamond Bank, shed light on the developments during a recent interview. Longe emphasized that despite the challenges faced by Nigeria, such as the issues in the Niger Delta region impacting oil production, the demand for Nigeria's Bonny Light crude remains robust. The increase in crude oil exports contributed significantly to the overall positive trade numbers for the quarter. However, the sector still faces challenges, as evidenced by the oil industry's lackluster performance in the third quarter GDP figures. Longe pointed out that Nigeria has yet to fully explore the potential of the oil value chain beyond crude oil, with many byproducts still being imported, leading to a significant growth in the import end of the merchandise trade. To maximize the sector's potential, Longe suggested that the passage of the Petroleum Industry Bill (PIB) would provide clarity for investors and stimulate growth. Additionally, Longe highlighted the need for Nigeria to focus on backward integration in the oil value chain, suggesting that refining more products domestically could enhance the sector's contribution to the economy. Longe also discussed Nigeria's agricultural sector, referencing the Central Bank of Nigeria's plan to kickstart rice exportation in 2017 under its agricultural promotion program. While some states have shown interest in the initiative, Longe expressed skepticism about the country attaining self-sufficiency in rice production and ramping up exports in the short term. He noted that the current price of rice in Nigeria, with a 50 kg bag ranging from 16,000 to 20,000 naira, poses a challenge to local production competing with imported rice. Long-term prospects for rice production and export look promising, but challenges such as infrastructure, power, and distribution issues need to be addressed to realize significant gains. Longe emphasized that achieving self-sufficiency and increasing exports in the agricultural sector would require substantial improvements that may not materialize by 2017. In conclusion, while Nigeria's merchandise trade witnessed positive growth in the third quarter, driven by increased exports, challenges persist in maximizing the potential of key sectors such as oil and agriculture. Long-term strategies focusing on legislation, infrastructure development, and value chain enhancement are essential to propel Nigeria towards self-sufficiency and increased export capacity in the future.