Nigeria’s cost of importing commodities has again exceeded the value of its exports, resulting in a widening of its trade deficit to a record N4 trillion in the nine months of the year.
That’s a huge trade imbalance when compared with a surplus of N2.8 trillion generated the same period last year, as Africa’s largest economy continues to grapple with a fall in both oil and non-oil export earnings that has been worsened by the global coronavirus pandemic.
Crude oil exports which account for more than half of Nigeria’s foreign exchange earnings, plunged by 37.4 percent to N6.9 trillion from N11.1 trillion in nine months period the previous year, the National Bureau of Statistics reported on Monday.
Non-oil export was also down by 38 percent to N1.2 trillion from N1.9 trillion, while non-crude oil exports also suffered a huge decline to N2.4 trillion from N3.4 trillion last year.
On the other hand, Nigeria total import amounted to N13.9 trillion, up by 19 percent from N11.6 trillion last year.
Worsened by the pandemic, Nigeria’s trade balance has largely been unfavourable since the fourth quarter of 2019 when import outpaced exports, resulting in a trade deficit of N579 billion.
Read also: Nigeria’s trade balance hits N1.8 trillion deficit in Q2 2020
In the first quarter of the year, the trade deficit was reduced to N421.2 billion before skyrocketing to N1.8 trillion and N2.4 trillion in the second and third quarter of 2020 respectively.
With imports far outpacing exports, it means further starve of the much needed foreign exchange earnings and further pressure on the reserve.
It would also serve as big constrain for manufacturing companies looking for dollars to import key inputs as they would be forced to get the greenback at the black market where the naira is sold for N482/$, according to data from abokiFX.com.
Total trade within the period stood at N23.2 trillion, down from the N26 trillion the same period last year.
Quarterly, total imports rose by 33.77 percent in Q3 2020 compared to N4.02 trillion recorded in Q2 2020 to stand at N5.38 trillion, and 38.02 percent increase compared to N3.89 trillion recorded in Q3 2019.
Total export (N2.99 trillion) was 34.85 percent higher in Q3 2020 than N2.22 trillion recorded in Q2 2020, but 43.41 percent less than in N5.29 trillion recorded in Q3 2019.
Imported agricultural goods increased in value by 21.13 percent in Q3 2020 compared to Q2 2020, and 109.82 percent compared to the corresponding quarter in 2019.
The value of Raw material imports increased by 24.47 percent in Q3 2020 compared to Q2 2020 and 114.95 percent compared to the same quarter the previous year.
Agricultural goods export dropped in value by 22.6 percent in Q3 2020 compared to Q2 2020, but increased by 43.7 percent year-on-year.
The value of Raw material goods export recorded a decline of 24.6 percent in Q3 2020 compared to Q2 2020 and a decline of 61.9 percent compared to the same quarter in 2019.
