Nigeria’s total foreign trade dropped by 18% to N8.3trn from N10.12trn in the previous Q4, 2019

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…… major banks’ loans to customers merely increase to N18.9 trillion from N17.4 trillion in FY 2019


Nigeria’s total foreign trade (import and export) dropped by 18% in Q1 2020, from N10.12 trillion in the fourth quarter (Q4) 2019 to N8.3 trillion at the end of Q1 2020. This was disclosed in the latest foreign trade report released by the National Bureau of Statistics (NBS).

According to the report, the year-on-year total foreign trade increased by 0.8%, from N8.23 trillion in Q1 2019 to N8.3 trillion in Q1 2020, reflecting the early effects of disruption caused by Covid-19 pandemic.


Basic highlights:


As at the end Q1 2020, Nigeria’s total foreign trade balance remained in the negative region.


In Q1 2019, total import for the period stood at N4.22 trillion while total export was N4.08 trillion indicating a negative trade balance of N138.99 billion.

The value of total imports decreased by 21.08% in Q1, 2020 compared to the value recorded in Q4 2019 but was 13.99% higher when compared with Q1, 2019.


Also, the value of imported agricultural goods increased by 12.02% in Q1 2020 compared to Q4 2019 and 10.62% more than Q1 2019.


The value of Agricultural goods exports grew 85.36% in Q1,2020 compared to Q4,2019


Manufactured goods exports decreased by 12.72% in value in Q1,2020 compared to Q4 2019

According to NBS reports, Nigeria received $5.85 billion capital inflows in Q1 2020


A closer look into the data shows that Nigeria recorded its lowest export value in eight quarters since it recorded a total of N3.91 trillion in Q4 2017. A case which has clearly affected the value of crude oil exports and non-crude oil simultaneously.


Also the report disclosed that crude oil export (N2.94 trillion) dipped by 18.9% in Q1 2020 compared to N3.63 trillion recorded in Q4 2019 and sloped to its lowest in 11 quarters since Q2 2017 when the total crude oil export was estimated at N2.43 trillion, while non-crude oil export (N1.14 trillion) reduced marginally by 0.27% as against N1.14 trillion recorded in the preceding quarter Q4 2019.


Nigeria’s Foreign trade, Q1 2020


It is worth noting that value of exported agricultural goods stood at N126.35 billion in Q1 2020, indicating 85.36% increase compared to N68.16 billion recorded in Q4 2019. The majorly traded agricultural products include; Sesamum seeds, Good fermented cocoa beans, superior quality raw cocoa beans, Natural cocoa butter, Cashew nuts, Ginger etc.



Top trade destinations


In Q1 2020, Nigeria exported goods majorly to India, Spain, Netherlands, South Africa and Cameroon while our major Import sources include China, Netherlands, United States, India and Belgium.

India accounted for 15.61% (N637.53 billion) of the total value of exported goods by region, followed by Spain which accounted for 9.87% (N402.93 billion) of our total exports between January and March 2020.


Top Nigeria’s export nations


India – 15.61%

Spain – 9.87%

Netherlands – 9.72%

South Africa – 7.82%

Cameroon – 7.82%



Meanwhile, Nigeria’s export to ECOWAS member states between January and March 2020, was estimated at N296.29 billion, representing 30.29% of the total export to Africa while Other regions of the continent accounted for 69.71% (N681.92 billion) to the total export.


Still with trades, Nigeria imported goods valued at N1.11 trillion from China, accounting for 26.28% of the total value of exported items in the first quarter of 2020. The Netherlands followed, having accounted for 11.14% (470.11 billion) of the total export.


Imports from African countries stood at N118.95 billion in Q1 2020, representing 2.82% of Nigeria’s total import between January and March 2020.


Top Nigeria’s import nations


China – 26.28%

Netherlands – 11.14%

USA – 10.45%

India – 7.92%

Belgium – 6.11%


Implication for Nigeria’s economy

The latest report shows that Nigeria has maintained its negative trade balance since Q4 2019, meaning the country importing more than exporting, consequently affecting the country’s foreign reserve.


A decline in the export of manufactured goods is an indication of the country’s low industrial and manufacturing industry.



Despite the increase in Agricultural export, there was also a recorded increase in the import value as well, which directly contradicts the essence of border closure as a measure of discouraging importation.


It is expected that the Q2 2020 report will give a full reflection of the effect of COVID-19 and lockdown procedures on Nigeria’s trade balance.


Note that during the lockdown, ban was placed on international travel by most countries which would affect our export capacity.


Also, medical supplies and ventilators used in isolation centers in Nigeria were not manufactured in Nigeria, consequently affecting the country’s trade balance.

In the same vein, some of major banks’ loans to customers merely increase to N18.9 trillion in Q1 2020, up from N17.4 trillion in FY 2019


Research revealed a 5.74% increase during the first quarter of the year leads banks’ loans growth by more than N1 trillion during the first three months of the year.


The breakdown details of major ones shown: Zenith Bank Plc recorded the biggest loans to customers in Q1 2020, having disbursed as much as N275.2 billion worth of loans during the period. In total, the tier-1 bank’s loans to customers stood at N2.6 trillion as of March 31st, 2020.


Following by First Bank in terms of biggest loan disbursement in Q1 2020 which showed an increase of 10.74% (or N198.9 billion addition in loans) resulted to total loans to customers jumping to more than N2 trillion, up from N1.8 trillion as of December 2019 in tier-1bank.


While, United Bank for Africa Plc occupied third position with N195.2 billion, shortly by Guaranty Trust Bank Plc with N121.3 billion. Check Below for others banks’ figures:


Why this Matters: Recall that the Central Bank of Nigeria (CBN) had in July 2019 increased banks’ Loan to Deposit Ratio (LDR) to 60%, up from 58.5%. Three months afterwards, the LDR was again increased to 65%, even as speculations were rife that it would further be increased to 70%. The apex bank later issued a circular announcing that LDR would be retained at 65% which is the current level.


The main reason the CBN increased the LDR in the first place was to facilitate the provision of credit facilities to the real sector of the economy. The CBN incentives assigned a weight of 150% in respect of lending to SMEs, retail, mortgage, and consumer lending. Lenders are required to fully comply or risk attracting a levy of additional Cash Reserves Requirements of 50% of the lending shortfall of the target LDR.


Insider revealed that the apex bank’s LDR policy was partly responsible for the noticeable increase in banks’ loans to customers in Q1 2020. However, it remains to be seen whether the loan figures will grow during the second quarter of the year, considering the challenges that have faced the Nigerian economy during the period.

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