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Nigeria’s Trade Deficit Widens

Nigeria’s Trade Deficit Widens

Nigeria’s trade deficit widens to N1.8trn in three months

Weak demand for Nigerian products increased the trade balance deficit to N1.87 trillion in the second quarter of 2021.

The National Bureau of Statistics (NBS) stated this in its “Foreign Trade Statistics – Q2 2021 obtained on Monday by Ripples Nigeria.

According to the report, Nigeria spent N6.95 trillion on imports but recorded exports worth N5.08 trillion.

What this means is that out of the N12.03 trillion trade merchandise recorded between April, May, and June, imports exceeded exports by N1.87trillion, which is the deficit.

NBS data however showed that trade recorded in the Q2 was 23.28% more than last quarter Q1 2021 and 88.71% more than the same quarter in 2020.

“During quarter 2, 2021 the total merchandise trade stood at N12,02 trillion representing 23.28% increase over the value (N9,757.87billion) recorded in Q1,2021 and 88.71% increase compared to Q2,2020,” NBS said.

Furthermore, NBS data shows that non-oil exports of N462.85 billion was recorded in the period under review. While crude oil/total exports constituted 80.29% of the transaction 42.22% was export/total trade.

“The export component of this trade was valued at N5.07 billion or 42.22% , the import was valued at N6,950.21billion or 57.78% while the trade balance stood at a deficit of N1,870.77billion.Crude oil which is the major component of export trade stood at N4,078.20 billion or 80.29% of total export. This further shows a sharp increase of 111.32% in Crude oil value in Q2, 2021 compared to (N1, 929.83billion) recorded in Q1,2021 while the Non-crude oil export recorded N1001.23 billion or 19.71% of total export trade during Q2,2021,” the report added.

Nigeria’s Trade Deficit Widens

For product classification, NBS said “total value of trade in agricultural goods in Q2 stood at N817.35 billion, with the export component totalling N165.27 billion while the import was valued at N652.08 billion.

“Topmost of these exported agricultural products were good fermented Nigerian Cocoa beans exported mainly to Netherlands (N16.48 billion), Malaysia (N9.32 billion) and the United States of America (N8.41 billion).”

For Solid Minerals, trade stood at N63.68 billion, with the export component at N14.93 billion while import was valued at N48.75 billion, with the top exported mineral products being cement exported to Niger Republic and Togo in values worth N3.12 billion and N2.32 billion.

For the manufactured goods sector, the value of trade stood at N4.51 trillion representing 37.50 per cent of total trade. The export component accounted for N211.67 billion while the import component was valued at N4.29 trillion.

“The products that drove up manufactured products were vessels and other floating structures for breaking up, which was exported to Cameroon in the value worth N71.90 billion.

“Vessels and other floating structures for breaking up were also exported to Spain and Equatorial Guinea in values worth N18.34 billion and N6.26 billion.

“In terms of manufactured imports, used vehicles were mainly imported from the United States and Italy in values worth N33.78 billion and N5.74 billion,” they said.

While in terms of Raw materials total trade stood at N904.51 billion, imports at N840.50 billion while the export component stood at N64.01 billion.

Asia is the leading partner with a record of N3.46 trillion or 49.92% with Europe with N2.30 trillion or 33.16% closely following.

America with N869.1 billion, Africa, N248.8 billion and Oceania, 58.1 billion. ECOWAS countries accounted for N24.2 billion.

On goods imported during the quarter, China led with a value of N2.078 trillion, followed by India with N570.01 billion, Netherlands with N557.16 billion, and the United States with N526.92 billion.

“In terms of regional trade, Nigeria exported most products to Asia (N1.84 trillion), Europe (N1.82 trillion), America (N806.81 billion) and Africa (N584.11 billion) while Oceania totalled N23.28 billion with goods worth N363.3 billion exported to ECOWAS.

“Analysis by country export trade showed that most goods were exported to India (N949.05 billion or), Spain (N524.49 billion), Canada (N355.60 billion) and Netherlands (N298.29 billion) and United States N256.63 billion,” NBS stated.

Business

Adopting CNG can reduce Nigeria’s inflation – FG

The Nigerian government has said that successfully adopting Compressed Natural Gas can reduce inflation, which soared to 33.69 per cent in April 2024.

The Programme Director of the Presidential Initiative on Compressed Natural Gas, Pi-CNG, Michael Oluwagbemi, disclosed this during a one-day South-South and South-East stakeholders’ engagement meeting in Port Harcourt, Rivers State.

He noted that Nigerians can realize between 40 to 50 per cent savings from petrol upon adopting CNG.

“It can reduce inflation. It is cheaper. You can realize between 40% and 50% savings from patrol. This is good for Nigeria, and it is safer.

“It is 18 times safer than petrol and diesel. It is cleaner and safer for the environment,” he said.

He added that Nigeria would save about $2.5 billion by converting every one million vehicles to CNG.

Recall that President Bola Ahmed Tinubu asked all federal government ministries, departments and agencies to procure CNG buses.

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Business

Nigeria won’t need to import fuel by June — Dangote

Aliko Dangote, Chairman of the Dangote Group, announced that by next month, Nigeria will no longer need to import gasoline due to the operational plans of the Dangote Refinery.

Speaking as a panellist at the Africa CEO Forum Annual Summit in Kigali, Dangote highlighted that the refinery, which has already commenced supplying diesel and aviation fuel in Nigeria, has the capacity to fulfil the diesel and petrol needs of West Africa and the aviation fuel requirements for the entire African continent.

Dangote emphasised, “Right now, Nigeria has no cause to import anything apart from gasoline, and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre.”

Highlighting how far the oil company has come, Dangote expressed how they are focused on ensuring that the continent will depend less on imports in the near future.

“We have enough gasoline to give to at least the entire West Africa, and diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico,” he said.

“Today, our polypropylene and our polyethene will meet the entire demand of Africa, and we are doing base oil, which is like engine oil; we are doing linear benzyl, which is a raw material to produce detergent. We have 1.4 billion people in the population; nobody is producing that in Africa.

“So, all the raw materials for our detergents are imported. We are producing that raw material to make Africa self-sufficient.

“As I said, give us three or a maximum of four years, and Africa will not, I repeat, not import any more fertiliser from anywhere.

“We will make Africa self-sufficient in potash, phosphate, and urea; we are at three million metric tonnes, and in the next twenty months, we will be at six million metric tonnes of urea, which is the entire capacity of Egypt. We are getting there.”

Dangote recalled how his dream for further investment in Africa as well as ending fuel importation in Africa has culminated in what is now one of the biggest refineries in the world.

“For some of us, despite the boom of the capital market in the US—you know, Google, Microsoft, and the rest—we didn’t participate; we took all our money and invested in Africa.

“We had this dream just about five years ago, and we said we wanted to move from five billion dollars in revenue to thirty billion dollars in revenue, and we made it happen. It is possible and now we have made it happen and now we have finished our refinery.

“Our refinery is quite big; it is something that we believe that Africa needs. If you look at the whole continent, there are only two countries that don’t import petroleum products, which is a tragedy.

“They are only Algeria and Libya. The rest are all importers. So, we need to change and make sure that we don’t just go and produce raw materials; we should also produce finished products and create jobs.

Speaking further, the African richest man said, “One of the things we also need to know as Africans is that we produce raw materials and export them when you export raw materials and somebody now keeps importing things into your continent and dumping goods. what you are importing is poverty and exporting jobs. So, we have to change that narrative.”

“We just commissioned in February, and now we are producing jet fuel, diesel, and by next month, gasoline.

“What that would do is that we would be taking most of the African crude that is being produced and also be able to supply not only Nigeria because our capacity is too big for Nigeria, but it would also supply West Africa, Central Africa, and also South Africa.

“We have 650,000 barrels per day, 1 million metric tonnes of polypropylene, and 590,000 metric tonnes of carbon black; those are the raw materials—ink, dyes and co.

“We are expanding more. This is the first phase and we are going out to the next phase, which will start early next year.”(tribune)

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Business

Customs FX rate for import duties rises to N1,530/$

The foreign exchange (FX) rate for import duties has been adjusted by the Nigeria Customs Service (NCS) to N1,530 per dollar.

This was adopted on Friday, May 17, representing a 6.13 percent increase compared to the N1,441.58 adopted on May 6.

The NCS always adopts FX rates recommended by the Central Bank of Nigeria (CBN) for import duties based on trading activities in the official FX market

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