Nigeria’s Trade Surplus Shrinks to N200bn in Q4 2024 as Imports Surge

Nigeria’s foreign trade reached N36.6 trillion in the fourth quarter of 2024, reflecting a 33.2% increase from the previous quarter, according to data from the National Bureau of Statistics (NBS). However, the sharp rise in imports—driven by a weakened naira and the country’s growing reliance on refined petroleum products—narrowed the trade surplus, underscoring persistent structural challenges in Africa’s largest economy.

Imports Outpace Exports, Reflecting Economic Struggles

The data revealed that imports rose by 41.6% quarter-on-quarter to N18.2 trillion, outpacing the 26.3% increase in exports, which stood at N18.4 trillion. While crude oil remained the dominant export, accounting for over 78% of outbound trade, the sector’s contribution continues to fluctuate due to volatile global oil prices and domestic production constraints.
The surge in imports was fueled by increased spending on refined petroleum, industrial machinery, and food items. Analysts point to the naira’s depreciation, which makes imports more expensive in local currency terms but has failed to boost non-oil exports, a key goal of the government’s economic diversification agenda.

Trade Policy and the Foreign Exchange Conundrum

The widening trade deficit in non-oil sectors highlights Nigeria’s struggle to reduce its dependence on imports. The Central Bank of Nigeria’s (CBN) foreign exchange policy reforms, which aimed to unify the exchange rate and attract foreign investment, have yet to yield tangible improvements in non-oil export growth.
Furthermore, the removal of petrol subsidies in mid-2023 has increased the country’s reliance on fuel imports, as domestic refining capacity remains weak despite efforts to ramp up operations at the Dangote Refinery and rehabilitate state-owned refineries.

Outlook: Structural Fixes or More Short-Term Adjustments?

As the government continues to push its industrialization and export-led growth strategy, trade figures suggest that deeper structural reforms are needed beyond forex policy tweaks. Increased investment in local refining, agricultural value chains, and manufacturing could help Nigeria build a more resilient trade balance.

For now, with global oil demand facing potential headwinds and domestic inflation eroding purchasing power, Nigeria’s trade trajectory remains dependent on how quickly policymakers can turn reforms into results. Investors and businesses will be watching closely to see whether the country can shift from an import-driven economy to a competitive exporter in key sectors beyond crude oil.