By Omoh Gabriel
Nigerians have continued to spend the nation’s foreign reserves in the importation of finished consumer products that could be sourced locally if efforts are made to patronize made in Nigeria products. The third quarter of 2011 report on Nigeria’s trade by the Bureau of Statistics has shown that “Mineral products, raw hides and skins, leather etc., textiles and associated articles and vehicles, aircraft and associated parts, represented the highest growth in imports between the third quarter of 2011 and the same period of 2010 while crude oil exports contributed 95.3 per cent of total exports. This has resulted in the continued low capacity utilisation and low production in Nigeria-based companies and industries.”
According to the trading pattern report, most food and food-related import categories witnessed sharp declines during the same period as the imports of live animals and animal products; imports of vegetable products; and imports of animal and vegetable fats and oils, all declined year-on-year by 69.03 per cent, 48.655 per cent and 55.62 per cent respectively. However, the report said that “Imports of prepared foodstuff, beverages etc. grew by 36.7 per cent on a year-on-year basis. At the same time, imports of wood and articles of wood declined by 58.74 per cent on a year-on-year basis.
According to the trade statistics, while the United States of America, China, Italy, Germany and France in that order, were Nigeria’s largest trading partners in terms of imports during the period with N740.3 billion, N375.85 billion, N189.04 billion, N186.52 billion and N186.42 billion respectively, the trade between Nigeria and other African countries remained very low. Total imports year-to-date to African countries stood at N882.8 billion by the end of the quarter.
On a year-to-date basis, the Americas has been Nigeria’s largest import destination at N2.94 trillion (USA-N1.81tn) closely followed by Asia (especially China) at N2.78 trillion and Europe at N2.76 trillion. Total imports year-to-date to African countries stood at N882.8 billion by the end of third quarter of 2011.
China’s Deputy Minister for Commerce, Mr. Chen Jian, had disclosed late last year during a meeting with the Nigerian Minister of Trade and Investment, Olusegun Aganga, in Beijing that the trade volume between Nigeria and China will hit $10 billion by the end of 2011.
But African countries need to boost regional trade and investment to keep pace with growth in other emerging economies that have large consumer bases, such as India and China. Trade and Industry Minister of South Africa, Rob Davies said in Cairo that Egypt and South Africa were trying to seal a Cape‑to‑Cairo free trade agreement that could help reduce dependence on flagging European economies. “The fact of the matter is we don’t as single countries, begin to touch the sizes of the domestic market of China and India, but as a grouping from Cape‑to‑Cairo, we do start to hit that league. Africa boasts of some 30 regional trade arrangements, but the continent receives less than 4 per cent of global foreign direct investment, in part because small markets often cannot attract big money and because onerous bureaucratic requirements tend to discourage foreign business.
Nigerian exports to other African countries stood at N509.03 billion or 17 per cent of total Nigerian exports, with the ECOWAS region representing N81.83 billion or 16 per cent of total exports to African countries and 2 per cent of total Nigerian exports. Exports to Nigeria’s largest destination for its exports, Algeria, represented 58 per cent of total exports to Africa. On a year-to-date basis, the Americas’ N5.70t rillion especially USA’s N1.33 trillion remains Nigeria’s largest export destination, followed by Europe with N2.6 trillion and Asia with N2.01 trillion.
World Bank’s Vice-President for Africa, Obiageli Ezekwesili said that African countries can prepare for the impact of the euro-zone crisis that threatens to derail economic growth on the continent by improving trade between their countries and fighting inflation. She said the traditional partners of Africa in Europe were likely to be affected by the fallout of the European debt crisis, which would squeeze remittances, curb trade and tourism. Ezekwesili said Africa’s economic growth forecast for this year stood at 5.3 per cent and 5.6 for 2013, but a recession would likely lead to a 1.7 per cent contraction in 2012.
“When you talk about Greece, Portugal, Ireland and the other countries, you then look at African countries particularly linked to them. We keep our eyes on countries like Cape Verde, Guinea, Nigeria, Sierra Leone,” Ezekwesili said on the sidelines of an African Union summit in Addis Ababa. She said the Ethiopia summit would discuss boosting intra-regional trade in Africa to ease the impact of the recession.
According to the Nigeria Bureau of Statistics report, Nigeria’s total exports in the nine months starting from January 2011 to October stood at N10.66 trillion, while total imports stood at N9.31 trillion resulting in a balance of trade of N1.34 trillion year-to- date compared to the N6.36 trillion for full year 2010.
Trade data available in the Bureau of Statistics indicate that the country still depends more on import and the export of crude. Export of non-oil products is still very low suggesting that Nigerians must wake up and increase production of non-oil products. According to figures released by Bureau of statistics, total imports in the third quarter of 2011 stood at N2.88 trillion as against N3.32 trillion in the second quarter of 2011, a decrease of N440.6 billion or 13.3 per cent. This development when compared with the third quarter of 2010 showed Nigerians’ propensity to consume foreign products rose as imports increased by N721.1 billionn or 33.0 per cent.
Further analysis of the nation’s trade data revealed that imports of boiler, machinery and appliances parts thereof, represented the highest contribution of N882.26 billion or 22.8 per cent. This was followed by vehicles, aircraft etc. with N800.4 billion or 20.4 per cent; plastic/rubber imports with N357.3 billion or 6.6 per cent; and base metal and articles of base metal with N208.3 billion or 5.4 per cent. Imports of food and food prepared or otherwise and related items, this included items classified under live animals and animal products, vegetable products, animal and vegetable fats and oils, and prepared foodstuff, beverages etc., collectively stood at N115.07 billion in third quarter of 2011 compared to N156.21 billion in the corresponding quarter in 2010.
The report said: “With respect to import destination in the third quarter of 2011, USA, China, Italy, Germany and France, in that order, were Nigeria’s largest trading partners in terms of imports with N740.3 billion, N375.85 billion,nN189.04 billion, N186.52 billion, and N186.42 billion respectively. On a year-to-date basis, the Americas has been Nigeria’s largest import destination at N2.94 trillion (USA-N1.81trillion) closely followed by Asia (especially China) at N2.78 trillion and Europe at N2.76 trillion.”
Continued the report: “The total value of merchandise trade in the third quarter of 2011 stood at N6.75 trillion compared to N6.89 trillion in the second quarter of 2011. This represents a decrease of N140.7 billion or -2.04 per cent in the third quarter of 2011 over the previous quarter. The drop in trade volume during the period over the second quarter of 2011 was due to a larger drop in the value of imports in the third quarter of 2011 relative to the rise in exports experienced over the same period.
“The rise in exports was actually due to increase in crude oil and mineral products exports as most non-mineral products/crude oil exports declined both between the second quarter of 2011 and third quarter and on a year-on-year basis. At the same time, the value of imports declined largely due to significant decreases in imports of food-related items as well as wood and articles of wood imports.”
Further analysis revealed that on a year-on-year basis, “total trade grew by 32.09 per cent in third quarter of 2011, relative to the corresponding period in 2010 (N5.11 trillion in Q3 2010). The Balance of Trade, however, grew strongly at N989.1 billion in the third quarter of 2011. This showed an increase of N740.6 billion or 298.1 per cent over the previous quarter. Based on year-on-year comparison, the total trade balance rose to N199.5 billion or 25.3 per cent. On a year-to-date basis, total merchandise trade stood at N19.98 trillion at the end of third quarter of 2011 compared to N19.65 trillion for full year in 2010.
“Total exports during the period were valued at N3.87 trillion .This showed an increase of N300 billion or 8.4 per cent over that of the second quarter of 2011. On a year-on-year basis, exports in the third quarter of 2011 increased by N920.7 billion or 31.2 per cent over the figure in third quarter of 2010. The value of crude oil exports was N3.69 trillion, a difference of N698.6 billion or 23.3 per cent over figures of second quarter in 2011. The value of non-oil exports on the other hand, declined sharply to N181.3 billion from N579.8 billion recorded in the second quarter representing a decrease of N398.5 billion or 68.73 per cent. Further analysis reveals that mineral exports continue to be Nigeria’s largest export component under SITC at N3.69 trillion in third quarter of 2011 out of which crude oil exports contributed 95.3 per cent of total exports. Other exports from Nigeria during the period under review included plastic/rubber and articles, footwear, head gear, umbrellas etc, prepared foodstuff, beverages, spirits and vinegar and raw hides and skin, leather, fur skins etc., with N48.4 billion or 1.2 per cent, N29.5 billion or 0.8 per cent, N22.6 billion or 0.6 per cent and N14.9 billion or 0.4 per cent respectively.