Nigeria’s trade deficit widens to N1.8trn in Q2’20 as total exports decline by 45.6%

Nigeria recorded a trade deficit of N1.8 trillion in the second quarter of 2020, the National Bureau of Statistics said in its foreign trade data released Wednesday.

This is worse compared to a deficit of N421.3 billion recorded in the first quarter and a surplus of N590.4 billion the same time last year, as the crude oil and non-crude oil export suffered a huge drop.

A trade deficit occurs when the value of a country’s exports is below the value of imports.

Total exports dropped by 45.6 percent in Q2 to N2.2 trillion from N4.08 trillion seen in Q1 2020, outweighing the 10.7 percent fall in imports, while total imports in the quarter stood at N4.02 trillion, down from the N4.5 trillion in Q1 2020.

Crude oil accounted for the biggest fall in exports, declining by 47.2 percent to N1.55 trillion, from N2.94 recorded in Q1 2020, while it fell by 60.5 percent from N3.37 trillion seen in Q2 2019.

On the other hand, non-crude oil exports declined by 41.5 percent to N665.6 billion from N1.14 trillion the preceding quarter, while non-oil exports fell 42.3 percent to N352.9 billion.

A widened deficit would mean the country would be starved further in terms of attracting dollar earnings, which would mount pressure on the country’s ability to defend the naira against the dollar.

Agricultural goods export also dropped 38.2 percent in Q2 2020 to N78 billion compared to N126 billion in Q1 2020, while it rose by 6.3 percent when compared to N73 billion recorded in Q2 2019.

Merchandise trade stood at N6.24 trillion, a sharp fall by 27.3 percent when compared with the N8.58 billion recorded in the first quarter.