Nigeria’s import surges to highest in over 12 years

Nigeria’s import surged by 54% year-on-year to N6.85 trillion in the first quarter of 2021 from N4.44 trillion recorded in the corresponding period of 2020.

This was contained in the foreign trade report, recently released by the National Bureau of Statistics (NBS).

The recent import data also represents a 15.6% increase compared to N5.93 trillion recorded in the previous quarter. Meanwhile, total trade in the period stood at N9.76 trillion, 14% higher than N8.55 trillion recorded in Q1 2020.

Nigeria recorded its highest quarterly import in over 12 years, pushing the country’s trade deficit to its highest ever, based on our tracker.

Highlights of import

• The value of imported agricultural products increased by 18.37% in Q1 2021 compared to the previous quarter and 140.47% higher year on year.
• The value of Raw material imports fell by 6.50% in Q1 2021 compared to Q4 2020 but increased by 109.29% compared to Q1 2020.
• The value of other oil products imported in Q1 2021 was 19.02% more than its value in Q4 2020 but 15.76% less than the corresponding quarter of 2020.
• The value of imported manufactured goods grew by 18.47% in Q1 2021 against the value recorded in Q4 2020 and 69.70% against its value in Q1 2020.
• The value of Solid minerals imports was 36.97% higher in Q1 2021 than in Q4 2020 and 59.26% more than its value in the corresponding period of 2020.

The surge in imports can be largely attributed to the increase in the value of petrol imports. Nigeria imported petrol worth N687.74 billion in the review period, representing a 19.88% increase compared to N573.69 billion in Q4 2020.

Also, despite the billions of naira spent by the federal government to improve the agricultural sector of the country, it appears we are falling behind in terms of food sustenance. According to the report, agric imports surged to a record high at N630.2 billion.

Meanwhile, crude oil exports which account for most of Nigeria’s export earnings dipped from N2.52 trillion recorded in Q4 2020 to N1.93 trillion in Q1 2021. Largely attributed to the decline in India’s importation due to the covid-19 resurgence in the country.

Dwindling reserves

Nigeria’s foreign reserve has continued to depreciate in recent time, losing over $1 billion year-to-date despite the rally in the global oil market. It is evident that the streak of negative trade balance is having adverse effects on Nigeria’s dollar reserves.

• A cursory look at the data shows that Nigeria has recorded a trade deficit for six consecutive quarters, since Q4 2019.
• Currently, the exchange rate against the US dollar has depreciated to about N502/$1, while the official market trades at around N410/$1.
• Nigeria’s foreign reserve currently stands at $34.19 billion as of 3rd June 2021.

Top import sources

The top 10 countries accounted for 72.88% of the total imports recorded during the period under review.

• China led with N2.01 trillion, accounting for 29.34% of the total, followed by the Netherlands with imports valued at N726.1 billion, and the USA with N608.1 billion. India accounted for 8.6% with N589.1 billion, Belgium (N238.5 billion).
• Others on the list include Germany (N190.1 billion), Russia (N189.6 billion), Italy (N178.3 billion), United Kingdom (N133.4 billion), and South Korea (N129.6 billion).