Nigeria records decline ofN793.5bn in merchandise trade

Nigeria records decline ofN793.5bn in merchandise trade

 

– Nigeria recorded a decline of N793.5bn in

the first quarter merchandise trade to close at

N2.72tn from N3.51tn in the fourth quarter of

2015.

– Recall that the Nigerian stock market

crashed by N1.732 trillion as against the

N11.658 trillion market capitalization was as

at May 28, 2015 in just one year of the

President Muhammadu Buhari administration

– Nigeria experienced a decline of N671.1bn,

in the value of exports, imports also dropped

by N122.4bn

– Nigeria recorded a negative trade balance

of N184.1bn in the first quarter

Statistician General of the Federation and Chief

Executive Officer National Bureau of Statistics

Dr.Yemi-Kale

For the first time in seven years, Nigeria

recorded a decline of N793.5bn in the first

quarter merchandise trade to close at N2.72tn

from N3.51tn in the fourth quarter of 2015.

Recall that the Nigerian stock market crashed
by N1.732 trillion as against the N11.658
trillion market capitalization was as at May 28,
2015 in just one year of the President
Muhammadu Buhari administration. In the first
quarter of 2016, the All-Share Index also
crashed to 28,902.25 basis points from
34,310.37 basis points as the equity category
lost over N1.053tn in the first quarter of 2016.
According to a report released by the National
Bureau of Statistics (NBS), the drop in the first
quarter trade represented a decline of about
22.6% and attributed the decline in the first
quarter trade to a sharp drop in both import
and export trade.
The report stated that while the country
experienced a decline of N671.1bn,
representing 34.6 per cent, in the value of
exports, imports also dropped by N122.4bn or
7.8 per cent.
The report noted that the difference between
the country’s total exports, which was put at
N1.269tn, and total imports of N1.454tn made
Nigeria to record a negative trade balance of
N184.1bn in the first quarter.
“The total value of Nigeria’s merchandise trade
at the end of Q1 2016 stood at N2.72tn. From
the preceding quarter’s value of N3.51tn, this
was N793.5bn or 22.6 per cent. This
development arose due to a sharp decline in
both imports and exports. Exports saw a
decline of N671.1bn or 34.6 per cent, while
imports declined by N122.4bn or 7.8 per
cent.

“The steep decline in exports brought the
country’s trade balance down to -N184.1bn,
or N548.7bn less than in the preceding
quarter.
“The crude oil component of the total trade
decreased by N716.7bn or 46.6 per cent
against the level recorded in Q4 2015,” the
report read in part.
The highest export product for Nigeria in the
first quarter was mineral products, which
accounted for N1.05tn or 83 per cent of the
total export earnings.
Nigeria mainly exported goods to Europe and
Asia, which accounted for N467.1bn or 36.8%
and N360.6bn or 28.4%, respectively while
Nigeria exported goods valued at N161.3bn to
the continent of Africa, while that of the
Economic Community of West African States
was put at N50.4bn.
Financial analysts blamed the negative trade
balance recorded in the first quarter of 2016
on the country’s inability to formulate an
effective strategy to boost exports.
They also said the inability of exporters to
know the economic direction of the
government owing to the delayed passage of
the 2016 budget as well as over dependence
on revenue from oil were some of the major
reasons for the decline in merchandise trade.
Commenting on the negative trade balance
recorded at the end of the first quarter of 2016,
the Head, Banking and Finance Department,
Nasarawa State University, Uche Uwaleke said
the fact that a significant proportion of the
exports were mineral products underscored
the need to diversify the export base.

“The fact that imports declined by just 7.8 per
cent speak volumes of the weak elasticity of
imports in spite of the high exchange rate.
This revelation goes to buttress my position
that devaluation of the naira will not make any
significant impact on our trade balance given
the inelastic nature of imports and the
country’s shallow export base.
“The NBS report also shows that the bulk of
Nigeria’s imports is from China. By
implication, a lot of pressure will be taken off
the dollar if the Nigeria-China agreement on
yuan transactions is well implemented.
“The naira will also firm up as a direct
consequence of settling imports from China in
yuan instead of the dollar.”