Nigeria recorded a trade deficit of N3.06 trillion in the international trade of manufactured goods, beverages and tobacco in three years and three months.
Analysis of data sourced from the National Bureau of Statistics (NBS) shows that from January 2015 to March 2018, the country’s total trade in manufactured goods, beverages and tobacco was N3.42 trillion.
Our reporters observed that export accounted for about 90 per cent of the total trade value, indicating that local manufacturers were involved in about 10 per cent of the traded goods.
Within the period, export manufactured goods, beverages and tobacco accounted for N357.13 billion, being less than 10 per cent of N3.06 trillion recorded same period.
This is not just an indication of how the domestic market is heavily dependent on manufactured goods, beverages and tobacco, it may also be an indication of Nigeria’s high taste for foreign goods and the bad state of the manufacturing industry in the country.
The present government has been promoting industrialisation through several initiative, including the reintroduction of Export Expansion Grant (EEG) meant to encourage export, with more incentives for export of manufactured goods.
The Federal Government budgeted N20 billion and N19.28 billion for the implementation of the grant (EEG) in 2017 and 2018 respectively.
However, high interest rates seem to have crowded out credit from the private sector, thereby affecting local manufacturers.
Recently, the Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane, said it could be time for the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) to consider lowering the 14 per cent Monetary Policy Rate (MPR) to allow the private sector access to low interest credit.
For a while now, the MPC has retained14 per cent monetary policy rate, seen as “tight enough” to rein-in inflationary pressures.
While the CBN is concerned with bringing down inflation rate since last year to a single digit before possibly adjusting the 14 per cent MPR, Rewane is concerned that the private sector is starved of credit and this may have contributed to low exports largely due to low industrial production.
Analysis of the country’s import value of manufactured goods, beverages and tobacco within the over three-year period reveals N953.14 billion in 2015, N878.52 in 2016, N984.31 billion in 2017 and N248.56 billion in just the first quarter of 2018.
It is worth noting that Nigeria’s import value of manufactured goods, beverages and tobacco for the first quarter of 2018 is just N73.37 billion less than the entire amount Nigeria earned from export of same goods from 2015 to 2017.
A breakdown of exports within the period shows that in 2015, exports of manufactured goods, beverages and tobacco amounted to N118.50 billion but this value dipped to N84.77 billion.
While exports of the goods rose to N118.66 billion in 2017, data is still incomplete to put the total export value for 2018 but the first quarter data shows that it amounted to N35.20 billion.
Meanwhile, it is worth noting that while Nigeria’s export of manufactured goods, beverages and tobacco has remained largely low compared to exports, exports of agricultural produce are on the rise.
For instance, Nigeria earned a total of N66.19 billion from major agricultural exports, including sesamum seed, cocoa beans, cashew nuts, soya beans and frozen shrimps and prawns in the first quarter of this year.
The export value of sesamum seed, cocoa beans, cashew nuts, soya beans, frozen shrimps and prawns in the first quarter of this year almost doubles the N35.20 billion earned from export of manufactured goods, beverages and tobacco within the same period.
The NBS report shows that within the period, Nigeria earned N26.65 billion from sesamum seeds, whether or not broken.
An analysis of the report shows that sesamum seeds accounted for the highest value of all the major traded agricultural exports within the period.
Nigeria also earned N23.30 billion from fermented Nigerian cocoa beans and N6.03 billion from superior quality raw cocoa beans during the same period.
Cashew and soya beans also earned the country significant income as it earned N5.03 billion from sales of cashew nuts in shells and N3.46 billion from sales of soya beans, whether or not broken.