Foreign trade figures of Nigeria

Foreign Trade in Figures

Nigeria is open to trade, which accounted for 25% of Nigeria's GDP in 2020 (World Bank). The objective of Nigeria's trade policy is to promote and diversify its exports by reinforcing national competitiveness and encouraging liberalization through the reduction of subsidies. The country mainly exports petroleum oils (75.4% of total exports), petroleum gas (12.9%) and boats (6.2%); and it imports machinery (18.6% of total imports), petroleum oils (15.3%), vehicles (10.1%), electrical machinery (7%), pharmaceutical products (5.4%), plastics (4.5%) and cereals (4.2%) (ITC, 2020).

Nigeria's main export partners are India (15% of total exports), Spain (10.9%), the Netherlands (8.6%), South Africa (7.6%), China (5.1%) and France (4.5%). Its main suppliers are China (28.8% of total imports), the United States (9.1%), India (7.9%), the Netherlands (7.8%), Belgium (3.8%) and Germany (3.1%) (ITC, 2020). Nigeria has signed trade agreements with a number of countries in Africa, the Caribbean, the Pacific, and the European Union. In 2019, Nigeria also signed the African Continental Free Trade Agreement, which is expected to boost the non-oil sector. Raw materials and semi-finished goods benefit from reductions in customs tariffs, even if the country remains protectionist in certain sectors such as agriculture. There are currently more than 40 free trade zones and 8 more are under construction. Lingering barriers to trade and investment persist in the country, mainly due to long bureaucratic delays.

Nigeria’s trade balance is structurally positive, but it occasionally turns negative when oil prices and production drop. According to World Bank data, in 2020 the trade balance registered a deficit of USD -16.4 billion, due to the combined impacts of the Covid-19 crisis and the oil price shock. Exports of goods amounted to USD 35.6 billion, whereas imports reached USD 55.4 billion (WTO). Exports of services amounted to USD 3.5 billion, while imports reached USD 19.6 billion (WTO). Imports of goods and services decreased by -23.3% compared to 2019, while exports decreased by -27% (World Bank). Economic recovery and higher oil revenues resulted in a trade surplus in 2021. As imports are expected to be constrained and oil sales to boom, trade surplus is set to widen in 2022 (Coface).