Posted Thu, Jun 10, 2021 5:32 AM

External trade in goods gained momentum in 2021Q1 as the impact of COVID-19 fades on the global economy

In the recently published Foreign Trade in Goods Statistics Report by the National Bureau of Statistics (NBS), it was revealed that the value of Nigeria’s total external trade in goods was N9.8 trillion in the first quarter of 2021. This represents a growth of 14.1% when compared with the corresponding period in 2020 (N8.5 trillion) and 7.0% when compared with the previous quarter (N9.1 trillion). The expansion of Nigeria’s total external trade in 2021 was occasioned by the full resumption of economic activities across countries and sectors of the economy following the on-going massive vaccination across countries of the world.

Growth in external trade is accompanied by an expansion in the trade deficit as imports continue to outpace exports.

The expansion in Nigeria’s trade has been driven by an increase in imports while exports remain subdued. Nigeria’s total import in 2021Q1 stood at N6.9 trillion, representing an increase of 54.3% when compared with 2020Q1 and 15.6% when compared with 2020Q4. Though this emphasises the resumption of economic activities across sectors of the economy, it reflects the continued dependence of Nigeria on import for almost all categories of commodities – food, manufacturing, intermediate and raw materials. On the other hand, Nigeria’s export in 2021Q1 contracted to N2.9 trillion, representing a decrease of 29.3% when compared with the corresponding period of 2020 and 9.0% when compared with the previous quarter. This was motivated by the decline in the value of crude oil export in the period under review. Consequently, Nigeria’s trade deficit expanded to N3.9 trillion, an increased trade deficit from N329.9 billion in 2020Q1 and N2.7 trillion in 2020Q4

Despite resumption in economic activities globally, crude oil export plunged while the export of other oil related products and non-oil exports expanded

The decline in total exports in 2021Q1 is particularly attributed to the contraction in crude oil and other oil related exports. The value of oil export in 2021Q1 decreased to N2.5 trillion, representing a 29.1% decline from 2020Q1 and a decline of 16.3% from 2020Q4. The non-oil exports, on the other hand, expanded by 80.5% in 2021Q1 when compared with the previous quarter. However, it contracted by 30.2% relative to the corresponding quarter of 2020. Following the increase in non-oil exports, their share of total exports doubled, increasing to 15.0% in 2021Q1 from 7.6% in 2020Q4. However, the share of crude oil and other oil related exports contracted to 85.0% in 2021Q1 from 92.4% in 2020Q4. The decline in the value of oil exports could be attributed to the persistence in the supply cut agreement among OPEC and OPEC+ members to stabilise prices in the global oil market.

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