Nigeria’s foreign trade reached a historic milestone in 2024, with total exports soaring to $50.4 billion, marking a significant increase fueled by the depreciation of the naira and the removal of fuel subsidies. According to the National Bureau of Statistics (NBS), the country’s total trade volume in 2024 hit N138 trillion, representing a 106% increase compared to the previous year. When converted into dollars, this equates to $89.9 billion, showing a 22.1% rise from 2023. This performance is a sharp recovery from a 35% decline in trade volume in 2023, when the government adopted a market-driven exchange rate.
This impressive trade performance is largely attributed to Nigeria’s ability to adjust to new economic realities after the central shift to a more flexible exchange rate system in 2023. The devaluation of the naira by approximately 50% that year posed initial challenges, but businesses have shown resilience, driving the growth in both exports and imports in 2024.
The N138 trillion total trade value in 2024 was up from N66.8 trillion in 2023, reflecting significant growth in the country’s foreign trade. Adjusted for the exchange rate, the total trade in dollar terms increased by 22.1% to $89.9 billion. Using the official exchange rates, the 2024 value was calculated at N1,535/$1, compared to N907/$1 in 2023.
Exports in 2024 saw a remarkable growth of 96.3%, reaching N60.59 trillion. In dollar terms, Nigeria’s total exports stood at $50.5 billion, compared to $39.6 billion in 2023. While these numbers represent a strong export performance, they still lag behind the $58.2 billion recorded in 2022, a period when the exchange rate was N460 to $1 officially, and the parallel market rate was approximately N736 to $1.
Crude oil remains the backbone of Nigeria’s export economy, making up a significant portion of the country’s foreign trade. In 2024, crude oil exports accounted for $36 billion (N55.2 trillion), or about 71% of the total export value. This was an improvement from $31 billion in 2023 but still below the $45.8 billion recorded in 2022.
Despite the growth in crude oil exports, Nigeria continues to face several challenges in the sector, including crude oil theft, inadequate investments in the upstream oil industry, and environmental concerns linked to oil production. These issues continue to impede the country’s ability to meet its production targets, which are still far from the government’s goal of 2 million barrels per day.
In a positive development, Nigeria’s non-oil exports reached a four-year high in 2024, rising to $5.9 billion. This marks the highest value for non-oil exports since 2020. These exports mainly consist of agricultural products such as cocoa, palm oil, and cashew nuts, as well as mineral resources. A substantial portion of Nigeria’s non-oil exports is directed to other African countries, reflecting the nation’s growing importance in regional trade within the continent.
This increase in non-oil exports is a positive indicator of the country’s efforts to diversify its economy beyond crude oil. The rise in exports of agricultural and mineral products suggests that the sector is benefiting from improving market conditions, as well as better infrastructure and access to international markets.
While exports have surged, Nigeria’s imports have also increased. In 2024, total imports reached $39 billion (N60.5 trillion) based on the official exchange rate of N1,535/$1. This marks an increase from $34 billion in 2023, although it remains lower than the $55.6 billion recorded in 2022. The rise in imports reflects the country’s ongoing demand for foreign goods, despite the depreciation of the naira and limited access to foreign exchange.
Nigeria’s import bill has been heavily influenced by the high cost of foreign goods due to the devaluation of the naira and the country’s struggles to secure adequate foreign exchange. The most common imports include machinery, chemicals, consumer goods, and refined petroleum products.
A key factor contributing to the surge in exports in 2024 has been the removal of fuel subsidies, which had long been a drain on Nigeria’s government finances. The elimination of these subsidies has allowed more resources to be directed towards improving the trade balance, despite the negative impact of higher domestic fuel prices, which have contributed to inflationary pressures.
The removal of fuel subsidies appears to have had a positive effect on Nigeria’s external trade balance, with exports increasing significantly. While the policy has sparked debates over fuel price hikes, it has opened a window for Nigeria to redirect resources towards enhancing the trade balance and stimulating economic growth in other sectors, particularly agriculture and mineral exports.
While the surge in trade figures is promising, it’s essential to note that the statistics do not account for trade in services, which makes up a significant portion of Nigeria’s foreign exchange needs. Nigeria has substantial expenditures on imported services, especially in sectors like technology, consulting, and technical services, which strain the country’s foreign exchange reserves. These outflows further exacerbate the pressure on the naira and contribute to the country’s ongoing exchange rate challenges.
The Central Bank of Nigeria (CBN) recently reported that Nigeria recorded a current account surplus of $5.14 billion in the third quarter of 2024. This suggests some improvement in the country’s external accounts, though the persistent demand for foreign exchange, particularly for services, remains a major hurdle.
Nigeria’s strong trade performance in 2024 offers an optimistic outlook for the country’s economic future. The substantial increase in exports, particularly in crude oil and non-oil sectors, demonstrates the country’s potential to rebound from economic challenges. However, Nigeria must continue addressing structural issues in the oil sector, promote further economic diversification, and manage its foreign exchange demands to maintain this upward trajectory.
Looking forward, it will be essential for Nigeria to focus on improving infrastructure, creating a more favorable investment climate, and boosting the competitiveness of its export sectors. The government’s continued focus on economic diversification, particularly in agriculture and minerals, will be crucial in sustaining the growth witnessed in 2024.
Although Nigeria has made significant strides in trade, the country must continue to tackle the complexities of its oil dependency, the pressures of high service imports, and the volatility of the exchange rate to ensure long-term economic stability and growth. With these efforts, Nigeria can position itself for more sustainable progress in the years ahead.
