China, Netherlands, and the United States led the list of top Nigeria import sources in the first quarter of 2021, jointly accounting for 48.8% of the total import bill recorded in the period.
This is contained in the foreign trade report, released by the National Bureau of Statistics (NBS). Recall that Nairametrics reported that Nigeria’s foreign trade rose by 14.1% year-on-year to stand at N9.76 trillion in Q1 2021, largely due to a significant 54% surge in import bills.
The increase in import value also pushed Nigeria’s trade deficit to its highest level ever recorded, moving from N2.73 trillion recorded in Q4 2020 to N3.94 trillion in Q1 2021, both negative trade balances.
Economic relations between Nigeria and China can be traced back to 1971 when the two countries signed the Joint Communiqué on the Establishment of Diplomatic Relations. Since then, trade relations between the two countries have grown significantly into an increasingly complex and expensive business engagement.
Notably, the volume of trade between the two countries grew at low levels until rapid growth turned China from a net exporter of crude oil to the second-largest importer of crude oil in the world in 1993.
However, a surge in Nigeria’s imports of Chinese goods relative to its exports to China has resulted in a trade deficit with China.
This deficit is expected to continue until Nigeria can offer its industrial producers home-grown alternatives of the same quality at competitive prices.
A distant top on the list is China with a total import value of N2.01 trillion, accounting for 29.3% of the total imports by Nigeria in the review period, followed by the Netherlands with N726.1 billion (10.6%).
International trade and integration have proven to be a powerful tool for countries to promote economic growth, development, and reduce poverty. However, every economy desires a positive trade balance as this significantly affects its exchange rate and economic growth.
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