Naira's Decline Drives Nigeria's Imports to N35 Trillion

Nigeria's Naira notes
Nigeria's Naira notes Google photos

According to data from the National Bureau of Statistics, Nigeria saw a rise in total imports to N35.9 trillion in 2023, compared to N25.5 trillion in 2022.

In the first and second quarters of 2023, a breakdown of the data showed that total imports were N6.4 trillion, which then increased to N9 trillion in the third quarter, and further to N14 trillion in the fourth quarter.

Manufactured imports topped the chart by volume, with imports worth N18.3 trillion. Agricultural imports were at N2.2 trillion, and imports of raw materials totalled N3 trillion.

On the other hand, Nigeria managed to produce exports totaling N35.9 trillion. Under the category of crude oil, which accounted for N29 trillion, many of these exports were made, while exports of other oil products amounted to N3.5 trillion.

Nigeria exported agricultural products worth N1.2tn, while manufactured goods sent abroad totaled N778bn.

Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, attributed the significant increase in exports on a year-on-year basis to the depreciation of the naira.

He explained that importing something worth $1m when the exchange rate was N450, now importing products worth $1m with the exchange rate at N1,500 is already three times when multiplied in naira.

The increase in exports is occurring as President Bola Tinubu pushes to enhance non-oil exports and diversify the economy away from crude oil exports.

During a presentation at an event hosted by the Nigerian Export Promotion Council, Segun Ajayi-Kadir, the Director-General of the Manufacturers Association of Nigeria, highlighted Nigeria's poor performance in global export trade, ranking 52nd among nations.

He added that domestically, the country has also not performed well in terms of the share of non-oil and manufactured exports to total exports.

He highlighted factors that are impeding exports, such as the high cost of local and imported raw materials, insecurity across the country (including industrial areas), and a scarcity of skilled manpower.

Among the factors are the high cost of transportation, forex instability, and deterioration in the exchange rate. Additionally, inadequate access to funds and high-interest rates on commercial bank loans are included.

He stated that the country's heavy reliance on the oil sector, following the discovery of crude oil, resulted in neglecting other sectors, leaving the economy exposed to revenue fluctuations caused by the usual instability in crude oil prices on the international market.

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