Nigeria’s foreign trade sector experienced a significant surge in activity during the fourth quarter of 2024, marked by a substantial increase in total merchandise trade value. The total trade figure reached N36.6 trillion, a remarkable 68.3% increase compared to the same period in 2023 and a modest 2.2% rise from the preceding quarter. This growth was primarily fueled by a sharp rise in imports, coupled with a steady, albeit slightly decreased, export performance. While Nigeria maintained a trade surplus, it narrowed considerably to N3.42 trillion, a 34.9% decline from the third quarter of 2024, highlighting the impact of the escalating import bill. This dynamic underscores the complex interplay of factors influencing Nigeria’s trade balance and the need for strategies to manage import growth while boosting export diversification.
A deeper examination of the trade data reveals the underlying trends driving this performance. Export earnings reached N20.01 trillion in Q4 2024, a 57.7% increase year-on-year but a slight dip of 2.55% compared to the previous quarter. Crude oil remained the dominant export commodity, contributing 68.87% of total export earnings, reflecting the persistent reliance on this sector. However, other key exports like liquefied natural gas, petroleum gases, and agricultural products like superior-quality cocoa beans also played significant roles. This indicates a potential for diversification, although the reliance on crude oil remains a key vulnerability to global price fluctuations. The Netherlands, France, Spain, India, and Indonesia emerged as the top five export destinations, collectively absorbing 43.7% of Nigeria’s total exports. This highlights the importance of these markets for Nigerian goods and the potential for further expanding trade relationships.
The surge in imports during Q4 2024 painted a contrasting picture. Total imports reached N16.59 trillion, an 83.2% increase from the same period in 2023 and an 8.57% increase from the previous quarter. This sharp rise in imports, while contributing to the overall trade growth, also significantly impacted the trade surplus. The composition of imports provides further insights into the nature of this growth. While mineral product imports, particularly mineral fuels, declined, potentially signaling a move towards domestic energy production, imports of agricultural products, raw materials, and manufactured goods increased substantially. This suggests a growing domestic demand for these goods, potentially driven by population growth and industrial expansion. China remained the primary source of imports, followed by India, Belgium, the United States, and France.
Analyzing the agricultural sector reveals a positive trend. Total agricultural exports surged to N1.54 trillion, a remarkable 232% increase year-on-year. Cocoa beans, both superior and standard quality, topped the list of agricultural exports, followed by sesamum seeds, natural cocoa butter, and shelled cashew nuts. This growth underscores the potential of the agricultural sector to contribute significantly to export diversification and economic growth. Europe and Asia remained the major markets for Nigerian agricultural products, with the Netherlands and Malaysia leading in cocoa bean imports, while China and Japan were key destinations for sesamum seeds. This showcases the global reach of Nigerian agricultural products and the opportunities for further market penetration.
The solid minerals sector presented a mixed picture, with total exports valued at N60.7 billion. While this represented a 69.2% increase year-on-year, it also marked a 21.9% decline from the previous quarter. Cement clinkers and tin ores were the primary exported minerals, with Cameroon and China as the major trading partners. Conversely, imports of solid minerals, predominantly plasters from Egypt and Tunisia, reached N111.8 billion. This suggests a potential need for increased domestic processing and value addition within the solid minerals sector to reduce reliance on imports and maximize export potential.
The manufacturing sector also experienced dynamic shifts. Exports of manufactured goods reached N494.2 billion, a significant 110.3% increase year-on-year, but a sharp 52.5% decline from Q3 2024. Key manufactured exports included unwrought aluminium alloys, dredgers, and cathodes, primarily shipped to African, Asian, and European markets. In contrast, imports of manufactured goods soared to N8.47 trillion, with aircraft parts from France and photovoltaic cells from China among the top imports. This substantial disparity between manufactured exports and imports highlights a critical area for policy intervention, focusing on boosting domestic manufacturing capacity and promoting value-added exports to reduce reliance on imported manufactured goods.
Finally, intra-African trade remained a significant component of Nigeria’s foreign trade. Exports to other African countries amounted to N2.04 trillion, while imports from the continent stood at N514.96 billion, representing a relatively small 3.1% of total imports. South Africa, Ivory Coast, and Senegal were identified as key trading partners within Africa. This underscores the potential for further regional integration and expansion of intra-African trade to diversify markets and foster regional economic growth. The overall trade dynamics highlight the need for strategic policy interventions to address the growing import bill, promote export diversification beyond crude oil, and strengthen domestic production capacity, particularly in the manufacturing sector. These measures are crucial for achieving a more balanced and sustainable trade profile and fostering broader economic development.
