The merchandise trade data released by the NBS in its latest Foreign Trade Statistics for Q3 2016 show the total value of trade as N4.72trn, representing an increase of 16% on the preceding quarter. The data also show a trade deficit of N104bn, which compared with N482bn in Q2. The increase in imports in a recession in the first three quarters of last year (see chart) is due, of course, to the weakness of the naira exchange rate.
Total exports stood at N2.31trn in Q3 while the total value of imports was N2.41trn. This represented increases of 29% q/q and 6% q/q respectively.
The leading source of imported goods in Q3 was China, with an import value of N478bn (US$1.6bn) equivalent to 20% of total imports. Belgium appears to have been the second largest origin of imports in the review period, with an import value of N331bn (US$1.1bn).
Meanwhile, the value of imports from other African countries amounted to N88bn (US$290m). However, ECOWAS countries accounted for just 10%.
In terms of exports, crude oil was the largest contributor with a total value of N1.9trn (US$6.2bn). Meanwhile, the total value of agricultural products exported stood at N14.4bn (US$50m). Frozen shrimps and prawns accounted for 37%, and sesame seeds 34% of total agricultural exports in Q3.
Nigeria is heavily dependent on imports. However, given the current fx illiquidity, we expect the FGN’s import substitution strategy to have a significant impact over time.
