- The trade balance which was steady until 2019 started deteriorating and by 2021 it hit N1.94 trillion, about 2.7 per cent of the country’s real gross domestic product (GDP).
Economic analysts are worried about the growing trade deficit and poor export performance of Nigeria. The trade balance which was steady until 2019 started deteriorating and by 2021 it hit N1.94 trillion, about 2.7 per cent of the country’s real gross domestic product (GDP). Nigeria’s exports fell by 35% in 2020 mainly due to the Pandemic and the fall in crude prices.
The crisis was deepened with the value of Naira falling by almost 10% at the official market eroding the export earnings. For example, in 2018, Nigeria’s yearly exports were valued at N18.53 trillion and only grew marginally to reach N18.91 trillion by 2021, recording just a two percent growth. This is because the value of naira had depreciated by, at least, 10 per cent, within the period. In dollar terms, what the country earned from exports last year was less than the value of earning four years earlier. At the same time, the trade data shows that in 2018, the share of exports in the total foreign trade stood at 58 per cent. By 2021, imports had grown by about 58 per cent reversing the ratio to 52:48 in favour of imports.
The phenomenal growth in imports is a drain on the job market. In the period from 2018- 2021 period, crude and oil products accounted for an average of 89.4 per cent of the total exports, while industries and agriculture where the bulk of the jobs are created claimed just 10 per cent. Despite the country’s campaign to promote non-oil exports, oil still controlled 88.7 per cent of the export basket last year. Nigeria’s non-oil exports are dominated by raw materials and commodities which has a huge impact on the foreign exchange (FX) market and employment creation. In simple terms, Nigeria has continued to export jobs owing to its inability to domesticate heavy factor industries.
Read More;
https://trendsnafrica.com/fuel-shortages-pumps-up-inflation-in-nigeria/
https://trendsnafrica.com/foreign-portfolio-investment-inflows-to-nigeria-dip/
Experts are genuinely worried that these issues could snow ball into major socio-economic crises.
