Nigeria’s exports to other African countries have experienced a significant decline in recent quarters, falling from a peak of N2.49 trillion in the third quarter of 2024 to N1.85 trillion in the first quarter of 2025. This represents a substantial decrease of N631.52 billion and raises concerns about the nation’s trade performance within the continent. While overall exports for Q1 2025 totaled N20.59 trillion, with African exports constituting only nine percent, the downward trend in intra-African trade is a key area of focus for stakeholders. The decline is primarily attributed to dwindling oil exports, influenced by both production challenges and fluctuating global oil prices. However, experts remain optimistic, pointing to the growth of non-oil exports as a potential driver for future trade expansion within Africa.
The significant drop in oil revenue has spurred a renewed focus on diversifying Nigeria’s export portfolio. Non-oil exports demonstrated positive growth in Q1 2025, increasing by 11.45 percent to N3.17 trillion compared to the previous quarter. This sector’s contribution to total exports also rose to 15.38 percent. Stakeholders believe that this growth trajectory in non-oil trade presents a crucial opportunity to offset the declining oil revenues and bolster Nigeria’s overall trade performance within Africa. The unification of the exchange rate, leading to a devaluation of the Naira, is seen as a key factor promoting non-oil exports, making Nigerian goods more competitive in the African market.
Despite the encouraging growth in non-oil exports, Nigeria’s economy remains heavily reliant on oil. Crude oil exports in Q1 2025 were valued at N12.96 trillion, representing a significant portion of the total export value. This highlights the ongoing challenge of diversifying the economy and reducing dependence on volatile oil markets. The increasing domestic consumption of crude oil by newly operational refineries, such as the Dangote Refinery, further contributes to the decline in oil exports. The Naira-for-Crude deal, which allows local refineries to purchase crude oil in Naira, has also contributed to the reduction in crude oil available for export.
Stakeholders within the Nigerian business community view the decline in oil exports as an expected consequence of increased domestic refining capacity and global oil price fluctuations. However, they remain confident that the growth in non-oil exports, spurred by the exchange rate unification, will eventually compensate for the declining oil revenue. They emphasize the need for Nigeria to transition to an export-led economy driven by non-oil sectors to achieve sustainable economic growth and currency stability. The potential within the African market is significant, and experts believe that focusing on value-added processed goods and supporting export initiatives can unlock this potential.
The discussion surrounding intra-African trade has gained momentum in recent conferences and summits. The focus has shifted towards regional integration through initiatives like the African Continental Free Trade Area (AfCFTA) and the development of efficient cross-border payment systems. While not all African countries have ratified the AfCFTA agreement, there is growing optimism about the potential for enhanced trade within the continent once barriers are reduced. Experts believe that intra-African trade can significantly boost food security, address regional disparities, and create new opportunities for businesses. Initiatives like the Pan-African Payment and Settlement System (PAPSS) are seen as crucial in facilitating seamless transactions and reducing the reliance on third-country currencies for trade within Africa.
The path forward for Nigeria’s trade within Africa appears to hinge on the continued growth and diversification of non-oil exports. While the drop in oil revenue is a significant concern, the simultaneous expansion of non-oil sectors offers a promising alternative. The focus remains on supporting local businesses, promoting value-added products, and capitalizing on the opportunities presented by the AfCFTA and efficient cross-border payment systems. By fostering a robust non-oil export sector, Nigeria aims to strengthen its position within the African market and reduce its reliance on volatile global oil prices, paving the way for sustainable economic growth.
