According to data published Tuesday by the National Bureau of Statistics (NBS), Africa’s largest oil producer posted a N7-trillion trade deficit in 2020, with exports falling as much as 35 percent.
Nigeria’s trade position was negative in 2020 as COVID-19 pandemic crushed oil demand, sending the revenue of oil-exporting countries tumbling.
That compares to a surplus of N2.23 trillion recorded in 2019, with imports outweighing the county’s value of exports. Crude oil exports fell to N9.4 trillion from N14.7 trillion in 2019, while Nigeria’s non-oil exports fell to N1.4 trillion from N2.52 trillion in 2019.
A trade deficit occurs when a country’s import exceeds its export during a given time period.
When that happens, the said country is denied the gains of foreign exchange, which comes from the exports of commodities to other trading countries.
Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI) notes:
“Whether or not the country is going to have a good trade balance depends largely on what happens to the oil and gas sector,
“The import had been somewhat steady because no matter what happens, we still have quite a number of imports, it is not as volatile as the exports,” he says.
“Oil prices are looking fairly good and if this is sustained, then we are largely to see a much better situation than what we had in 2020,” he states.Pls SUBSCRIBE below to our Youtube channel and mailing list to get fresh updates on money making and inspiring videos and articles.