Posted Wed, Dec 8, 2021 4:34 AM

NESG 2021 Q3 Foreign Trade Alert December 2021

Nigeria’s External Trade spiked 58% on pick-up in global economic activities

Nigeria’s external trade value rose by 58.3% (year-on-year) to N13.3 trillion in the third quarter of 2021 from N8.4 trillion in 2020Q3. It also represents an improvement when compared with the value of external trade of N12 trillion in 2021Q2. In the first three quarters of 2021, the external trade value grew more than half to N35.1 trillion, relative to its level in the corresponding period of 2020 (N23.3 trillion). This impressive performance could be largely attributed to improved global economic activities, following the recovery of many countries from the pandemic-induced recession since the second quarter of 2021, with the Trade sector being a key beneficiary. In fact, the International Monetary Fund (IMF) projected a rebound in trade volume growth to 9.7% in FY’2021 from a contraction of -8.2% in 2020.

As usual, merchandize imports rose more than merchandize exports, resulting in a wider trade deficit of N3 trillion in 2021Q3, 25% higher than its level in 2020Q3 (N2.4 trillion). This marks the eighth consecutive record of a trade deficit since the fourth quarter of 2019, when the land borders were shut. Cumulatively, trade deficit for the first three quarters of 2021 jumped to N8.8 trillion from N4.6 trillion in the corresponding period of 2020.

Spike in total exports was driven by improved oil and non-oil export earnings

The total value of goods exported rose sharply by 70% to N5.1 trillion in 2021Q3 from N3 trillion in 2020Q3. In the first three quarters of 2021, aggregate export earnings were 40.9% higher at N13.1 trillion than its level in the same period of 2021 (N9.3 trillion), buoyed by increases in oil and non-oil export earnings. Oil exports – which accounted for 89% of total export earnings in the quarter – rose to N4.6 trillion in 2021Q3 from N2.8 trillion in 2020Q3. This was driven by higher global oil price (Nigeria’s Bonny Light price) – which averaged US$73.8 per barrel in 2021Q3, 70.4% above the average oil price of US$43.3 per barrel in 2020Q3. Similarly, non-oil exports – which accounted for 11% of the overall exports – were more than doubled at N546.3 billion in 2021Q3, relative to its level in 2020Q3 (N215.2 billion). This was driven by an increase in earnings from all categories of export items, except energy goods.

Download the document to learn more