Nigeria’s total trade value amounted to N12.05 trillion in the first quarter of 2023 despite Naira depreciation and scarcity.
The latest trade statistics published by the National Bureau of Statistics (NBS) showed that Nigeria’s total trade value declined 17.5 per cent year-on-year to N12.05 trillion in Q1 of 2023 from N14.60 trillion in the corresponding quarter of 2022 but increased by 2.77 per cent quarter-on-quarter from N11.72 trillion in the fourth quarter of 2022.
This shows that total exports at N6.49 trillion exceeded the value of total imports at N5.56 trillion during the period to give a positive trade balance.
Analysts at Cowry Assets Management Limited said: “as a result, the increase in trade in Q1 2023 was driven by a number of factors, including the rise in global oil prices, the increase in demand for Nigerian exports from China and other Asian countries, and the depreciation of the naira despite the currency crunch crisis, which made Nigerian exports more competitive during the quarter.”
According to the report, total exports increased in Q1, 2023 by two per cent Q-o-Q but declined by 8.66 per cent Y-o-Y compared to the amounts recorded in Q4, 2022 (N6.36 trillion) and Q1, 2022 (N7.10 trillion) respectively.
In the same vein, total imports increased by 3.67 per cent Q-o-Q in Q1, 2023 compared to the value recorded in Q4, 2022 (N5.36 trillion), but then again declined by 25.83 per cent Y-o-Y when compared to the value recorded in the corresponding quarter of 2022 (N7.49 trillion).
Cowry noted that, the foreign trade statistics for Q1, 2023 are positive and signal economic recovery, and the positive trade balance, which increased by 335.58 per cent Y-o-Y to N927.2 billion, is a welcome development compared to the trade deficit of N393.6 billion in Q1 2022, saying this was due to the increase in exports, which exceeded the increase in imports.
According to the research firm, the increase in total trade in Q1, 2023 is a positive sign for the Nigerian economy. It suggests that the country is becoming more integrated into the global economy and that businesses are becoming more confident in the economy. The increase in exports is also a positive sign, as it suggests that the country’s manufacturing sector is growing.
It however stated that, “the increase in imports is a cause for concern, as it suggests that the country is still heavily reliant on imports. The positive trade balance is also a positive sign, but it is important to note that it was only positive due to the increase in crude oil and natural gas exports. The government needs to focus on diversifying the economy and reducing its reliance on oil and gas exports in order to maintain a sustainable trade balance.”
Cowry opined that the increase in Nigeria’s foreign trade in Q1, 2023 is a positive development and indicates that Nigeria’s economy is growing amidst the growing demand for Nigerian goods and services.
It added that, it is also important to note that the increase in trade was driven by the increase in crude oil exports and echoes the need to focus on diversifying the economy with non-oil exports and reducing reliance on oil exports, saying, “this will help make the economy more resilient to shocks in the oil market. Also, the government should invest in infrastructure and human capital, which will help attract foreign investment.”