By Jeph Ajobaju, Chief Copy Editor
Nigeria’s total international trade deficit mounted up to N5.81 trillion in the first half of the year ended June 30 (H1 2021), according to the latest foreign trade report by the National Bureau of Statistics (NBS).
The NBS had earlier reported merchandise trade deficit of N1.87 trillion in the second quarter of 2021 (Q2 2021) even though total merchandise trade rose 23.28 per cent to N12.02 trillion.
The latest data shows total exports at N7.99 trillion and total imports N13.8 trillion in H1 2021, a deficit of N5.81 trillion.
Trade deficit in H1 2020 was N2.25 trillion and in H2 2020 was N5.12 trillion. The N5.81 trillion deficit in H1 2021 is by far the highest in any half-year period in Nigeria, Nairametrics reports.
In H1 2021, imports rose 22 per cent to N11.31 trillion compared to Q1 2021 and 60.7 per cent against N8.59 trillion in H1 2020.
According to Nairametrics, improved inter-border trade has created a major foreign exchange (forex) burden for the country as scarce forex is still being used to import merchandise while export earnings continue to dwindle.
NBS data imports value in H1 2021 shows :
Top import items
· Motor Spirit Ordinary (petrol) – N1.47 trillion
· Durum wheat – N583.02 billion
· Used vehicles – N498.94 billion
· Antibiotics – N480.98 billion
· Gas oil – N273.41 billion
· Machines for reception – N261.73 billion
· Motorcycles and cycles – N213.3 billion
· Cane sugar – N204.91 billion
· Other herbicides – N145.51 billion
· Lubricating oils – N140.42 billion
Top export items
Crude oil – N6.01 trillion (H1 2021); N4.08 trillion (Q2 2021)
· Liquefied natural gas – N887.2 billion
· Floating vessels – N152.95 billion
· Other petroleum gases – N121.28 billion
· Good fermented cocoa beans – N86.99 billion
Other exports include helicopters, sesamum seeds, cashew nuts, urea, and propane.
Trade deficit piles pressure on forex
Nairametrics adds that Nigeria’s foreign trade deficit continues to pile pressure on naira exchange rate as it depletes current account and foreign reserves.
Initiatives by the government and the Central Bank (CBN) to diversify the economy and create substitute exports for crude oil have not reflected substantially in international trade numbers.
Crude oil accounted for 90 per cent of exports in H1 2021 despite multiple investments in other sectors to ginger up local production, especially in agriculture.