Quick Summary:
- Nigeria’s total trade exports reached $50.4 billion in 2024, driven by exchange rate depreciation and the removal of fuel subsidies.
- Total trade volume surged by 106%, with a 22.1% increase in dollar terms.
- Crude oil exports remained dominant, accounting for 71% of total exports.
- Non-oil exports hit a four-year high, signaling growth despite challenges in the services trade and foreign exchange management.
Nigeria’s Trade Exports Surge to $50.4 Billion in 2024
Nigeria’s total trade exports soared to $50.4 billion in 2024, driven by significant changes in the country’s exchange rate policies and the elimination of fuel subsidies. These factors have bolstered the country’s trade balance, contributing to a remarkable growth in its trade performance.
Record-Breaking Total Trade Volume
According to the National Bureau of Statistics (NBS), Nigeria’s total trade volume reached N138 trillion in 2024, marking the highest trade value in the country’s history. This represents a 106% increase compared to the previous year. In dollar terms, this amounted to $89.9 billion, reflecting a 22.1% increase when adjusted for the exchange rate.
This growth is a notable rebound from a 35% decline in trade recorded the previous year when the government introduced a more market-driven exchange rate system.
Comparing 2024 with Previous Years
In 2022, Nigeria recorded its highest-ever trade figures, with total trade reaching $113.8 billion. However, at that time, the official exchange rate stood at N460 to $1, while the parallel market rate closed at N736/$1. This would have translated to just $71.7 billion when adjusted to parallel market exchange rates.
Following the adoption of a more market-determined exchange rate in 2023, the naira depreciated by 50%. Despite this, businesses appear to have adjusted well to the new exchange rate realities, leading to a significant boost in trade volumes in 2024.
Key Drivers Behind Trade Growth
In 2024, total trade stood at N138 trillion, up from N66.8 trillion in 2023. When adjusted for the exchange rate, total trade in dollar terms rose by 22.1% to $89.9 billion. Nairametrics, using official exchange rates, calculated the closing rates of N1,535/$1 for 2024 and N907/$1 for 2023.
Explosive Growth in Exports
Total exports nearly doubled in 2024, rising by 96.3% to N60.59 trillion. In dollar terms, this represented $50.5 billion, up from $39.6 billion in 2023. Although this figure is still lower than the $58.2 billion recorded in 2022, it remains a significant achievement.
When considering the parallel market exchange rate, 2024 saw the highest export earnings on record. Crude oil exports, which continue to dominate Nigeria’s trade, contributed $36 billion (N55.2 trillion) of the total exports in 2024, accounting for about 71% of total export earnings. This represents an increase from $31 billion in 2023 and $45.8 billion in 2022.
The Role of Crude Oil Exports
Crude oil exports remain the backbone of Nigeria’s foreign exchange earnings. However, the sector faces multiple challenges, including crude oil theft, inadequate investment in the upstream sector, and environmental and community-related issues that affect production.
Despite various government initiatives to boost crude oil output, Nigeria has not yet achieved its target production of 2 million barrels per day. Nonetheless, crude oil continues to play a pivotal role in financing fiscal spending and supporting foreign exchange reserves.
Non-Oil Exports Reach a Four-Year High
Non-oil exports in 2024 reached $5.9 billion, the highest level since 2020. This surge is largely attributed to agricultural and mineral exports, with Africa serving as a key export destination.
Rising Imports and Trade Deficit
In dollar terms, Nigeria’s total imports increased to $39 billion (N60.5 trillion) in 2024, up from $34 billion in 2023. However, this remains significantly lower than the $55.6 billion recorded in 2022. The decline in imports over the past few years is largely due to the naira’s depreciation and limited access to foreign exchange.
Excluded Services Trade and Its Impact
While Nigeria’s trade data paints an optimistic picture, it is important to note that it excludes trade in services. Services such as technology, consulting, and technical support constitute a significant portion of Nigeria’s foreign exchange demand. The country spends heavily on imported services, and these outflows contribute to ongoing pressures on the exchange rate and impact the actual current account balance.
Positive Outlook for Nigeria’s External Accounts
Despite the challenges in the services trade, the latest data from the Central Bank of Nigeria (CBN) reveals that Nigeria recorded a current account balance of $5.14 billion in Q3 2024. This suggests some improvement in the country’s external accounts, even as it continues to grapple with forex-related challenges.
In conclusion, Nigeria’s 2024 trade performance showcases significant growth, particularly in exports, despite ongoing challenges in the oil sector and foreign exchange market. While the figures present a positive outlook for the economy, the country must continue addressing issues in the services sector to ensure long-term stability and growth in its external accounts.
