Nigeria’s total trade up at ₦12trn in Q1’23

Nigeria's total foreign trade in goods reached a staggering 12.04 trillion naira in the first quarter of this year, according to data from the National Bureau of Statistics. While the figure reflects a 17.5% drop from the previous year, there are still significant insights to glean from the data. Bamidele Ayemibo, an Export Consultant, joined CNBC Africa to provide a detailed analysis of the numbers and shed light on both the positive and negative trends shaping Nigeria's export landscape. Ayemibo highlighted the critical role of the Nigerian Export Promotion Council (NEPC) and the Central Bank of Nigeria (CBN) in driving export growth, emphasizing the need for concerted efforts to enhance Nigeria's trade competitiveness. While the US and Netherlands continue to dominate as Nigeria's top import-export trading partners, the reliance on crude oil for foreign exchange earnings remains a key concern. Notably, China accounts for 25% of Nigerian goods imports, underscoring the country's dependence on Asia for key commodities. Ayemibo commended the growth of solid minerals and agriculture exports, citing year-on-year increases of 23% and 64%, respectively. However, he expressed disappointment over the 8% decline in overall exports, particularly in the face of rising oil and gas exports. The dominance of oil and gas exports poses a challenge to Nigeria's diversification efforts, with crude oil comprising 90% of total exports in Q1. A significant development in Nigeria's export landscape is the emergence of soya beans as a major agro-commodity export, signaling new opportunities for the country's agricultural sector. The value of soya beans exports alone has surpassed $60 billion, outperforming traditional export crops like cashew, cocoa, and sesame seeds. Ayemibo stressed the importance of sustaining this growth trajectory and diversifying Nigeria's export basket to maximize foreign exchange earnings. Looking ahead, the imminent operationalization of the Dangote refinery presents a potential game-changer for Nigeria's import dynamics. The refinery's expected reduction in petrol imports could significantly impact Nigeria's trade balance and foreign exchange reserves, offering a ray of hope for import substitution strategies. As Nigeria strives to expand its export footprint, Ayemibo underscored the significance of joining the Guided Trade Initiative under the Africa Continental Free Trade Area (AfCFTA). The initiative aims to foster intra-African trade by prioritizing essential goods and fostering collaboration among member countries. Ayemibo emphasized the need to promote value-added exports, particularly in agro-processing and consumer goods, to leverage Africa's vast market potential. In terms of policy recommendations, Ayemibo called for greater engagement by Nigerian ambassadors in promoting exports and incentivizing export growth targets. He advocated for the expansion of export credit insurance to mitigate risks for banks and encourage financing for exporters, particularly small and medium enterprises (SMEs). Ayemibo highlighted the need to bolster the number of exporters in Nigeria to enhance competitiveness and stimulate export-driven growth. By adopting a holistic approach encompassing policy reforms and strategic initiatives, Nigeria can unlock its export potential and chart a path towards sustainable economic development.