Posted Mon, Oct 4, 2021 11:02 PM

NESG 2021 Q2 Foreign Trade Alert, October 2021

Nigeria’s External Trade for 2021Q2 improved on less stringent COVID-19 restrictions, amid new variants

Nigeria’s external trade value rose sharply by 88.7% (year-on-year) to N12 trillion in the second quarter of 2021 from N6.4 trillion in 2020Q2. Cumulatively, the value of external trade stood at N21.8 trillion in the first half of 2021, 46.3% higher than its level (N14.9 trillion) in the corresponding period of 2020. Similarly, the external trade value in Q2’2021 was over one-fifth higher than Q1’2021 value (N9.8 trillion) (see Figure 1 in attached document). The rapid improvement in the country’s external trade value could be largely attributed to the relaxation of pandemic-induced restrictions, amidst persistent spread of the Delta variant of COVID-19.

Merchandize imports were higher than merchandize exports, leading to a trade deficit of -N1.9 trillion in 2021Q2, same as in 2020Q1 (see Figure 2 in attached document). On a cumulative basis, trade deficit for the first half of 2021 stood at –N5.8 trillion, larger than its level in the corresponding period of 2020 (-N2.3 trillion). It is noteworthy that Nigeria’s trade deficit has persisted since 2019Q4.

Oil and Non-Oil Export Earnings rose in 2021Q2

The total value of goods exported spiked by 128.3% to N5.1 trillion in 2021Q2 from N2.2 trillion in 2020Q2. Cumulatively, the overall export earnings rose by 25% to N7.9 trillion in H1’2021 from N6.3 trillion in H1’2020, buoyed by higher oil and non-oil exports. Oil exports – which accounted for 91% of total export earnings in the quarter – rose sharply from N1.6 trillion in 2020Q2 to N4.1 trillion in 2021Q2. This is attributable to rapid increases in global oil price – which averaged US$68.7 per barrel in 2021Q2, 147.1% higher than the average oil price of US$27.8 per barrel in 2020Q2. On the other hand, non-oil exports – which accounted for 9% of total export earnings in the quarter - increased to N352.9 billion in 2021Q2 from N462.9 billion in 2020Q2. The stellar performance of non-oil exports – which exclude petrochemicals and oil-related items – was largely driven by an increase in earnings from all categories of non-oil exports (see Table 1 in attached document).