By Aliyu Galadima
United Capital Research Analysts have warned that Nigeria’s rising imports, particularly in the petroleum sector, could worsen the country’s trade deficit and increase its external borrowing needs.
This comes in response to the fourth quarter 2024 Foreign Trade Statistics report released by the National Bureau of Statistics ,NBS, which highlights the nation’s continued dependency on fuel imports and the dominance of oil-related exports.
According to the report, Nigeria’s total merchandise trade rose by 2.18% quarter-on-quarter to N36.60tn in the fourth quarter of 2024 from N35.82tn in the third quarter. Year-on-year, total trade surged by 68.28% from N21.75trn in Q4-2023. Despite this growth, the structure of Nigeria’s trade remains skewed, with imports rising significantly while exports declined.
Meanwhile, total exports in Q4 declined by 2.58% to N20.01trn from N20.54trn in Q3-2024. However, on a year-on-year basis, exports grew by 57.68% from N12.69trn in Q4-2023, reflecting increased crude oil shipments.
The financial analysts cautioned that Nigeria’s heavy reliance on crude oil exports and fuel imports presents significant economic risks. The lack of diversification in export products limits the country’s ability to build a more resilient trade structure.
Furthermore, rising imports, particularly from China which accounted for 27.79% of total imports expose Nigeria to external vulnerabilities such as currency depreciation and supply chain disruptions.
Although agricultural exports such as cocoa beans and urea were among the top five exports, their combined share stood at just 6.75%, further underscoring the country’s weak non-oil export base.
The Analysts stressed that boosting non-oil exports is critical to reducing Nigeria’s trade imbalance and mitigating the need for increased external borrowing.
