Nigeria’s economy suffers as trade deficit with manufactured goods reaches N9.4trn deficit in 2023
Nigeria’s trade balance of manufactured goods has reached a deficit of N9.4 trillion in the first nine months of 2023, according to analysis of Foreign Trade Statistics reports published by the National Bureau of Statistics.
The data reveals that Nigeria’s imports of manufactured goods amounted to N2.5 trillion in the first quarter, increasing to N3.2 trillion in the second quarter, and reaching N4.1 trillion in the third quarter. Cumulatively, imports of manufactured goods in the first nine months of 2023 totaled N9.9 trillion.
In contrast, exports in this category amounted to N131 billion, N212 billion, and N200 billion in the first, second, and third quarters respectively, resulting in a total of N543 billion. This indicates a negative trade balance, as imports exceeded exports by N9.37 trillion during the period under review.
The major items imported during this period included used vehicles with diesel or semi-diesel engines from the United States and United Arab Emirates, machines for reception, conversion, and transmission of voice, images, or data imported from China, and other medicaments not specified elsewhere from India.
On the other hand, the major exports in this sector were unwrought aluminium alloys exported to Japan, oilcake and other solid residues resulting from the extraction of soybean oil, and cathodes and sections of cathodes exported to Japan.
The significant deficit in Nigeria’s trade balance of manufactured goods highlights the country’s heavy reliance on imports in this sector. It also raises concerns about the competitiveness of Nigeria’s manufacturing industry and the need to promote domestic production and exportation of manufactured goods.
The data revealed that manufactured goods exports by region were mainly exported to Asia, Africa and Europe.
Nigerian businesses have struggled to make a significant impact in global export trade, ranking 52nd among nations, according to a report by the Manufacturers Association of Nigeria.
The report, titled ‘Emerging Issues Disrupting Nigeria’s Non-Oil Export And Innovative Solutions,’ highlighted production, port administration, and the operating environment as major obstacles to non-oil exports in the country.
Prior to the COVID-19 pandemic, the highest non-oil export volume achieved by Nigerian businesses was $9.13 billion.The report also emphasized the need to increase non-oil revenues, even with the benefits of oil being secured, as highlighted in a recent World Bank ‘Nigeria Development Update.’
The President of the Manufacturers Association of Nigeria, Francis Meshioye, explained in an interview that exporting manufacturers often struggle to compete with international counterparts due to high production costs. These costs ultimately lead to higher prices for manufactured goods in Nigeria.
Meshioye said, “We tell our members to export more, but all these things are based on competitive advantages. If you want to export a product, it is fine, but at what cost are you going to export it? What will be your price? If the cost is astronomically high, it will be difficult to export. It is a circle.
“The export base should be good enough to support the floating exchange rate, but we need to have a good economic base to do that.”
