Nigeria’s total imports fell by 4.59% in Q1 2025 compared to the previous quarter, signaling reduced demand for foreign goods amidst economic challenges

[dropcap]N[/dropcap]igeria Trade Balance data for the first quarter (Q1) of 2025 reveals a notable shift. The nation’s total imports fell by 4.59 per cent compared to the previous quarter, suggesting a moderate drop in the demand for foreign goods.

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Foreign trade data, released yesterday by the National Bureau of Statistics (NBS), showed that the country’s imports in Q1 were valued at N15.43 trillion, a decrease from the N16.59 trillion recorded in Q4 of last year.

However, on a year on year (y-o-y) basis, the value of imports did rise by 4.59 per cent.

This represents a modest increase, though it is insufficient to offset the real value of imports when discounted for inflation, which currently stands at over 20 per cent.

In real terms, the data indicated that Nigeria imported less in Q1 2025 compared to both the comparative quarter of 2024 and Q4 2024.

The country’s trade balance remained positive but experienced a 20.1 per cent drop year on year. The trade surplus was N5.17 trillion in Q1 2025, down from N6.52 trillion in Q1 2024.

Total merchandise trade for the quarter under review stood at N36.02 trillion, an increase of 6.19 per cent compared to the N33.93 trillion recorded in the corresponding period of 2024.

However, this figure fell by 1.58 per cent when compared to the N36.6 trillion recorded in the preceding quarter.

Exports accounted for 57.18 per cent of total trade, reaching a value of N20.6 trillion, which represents a 7.42 per cent increase over the N19.18 trillion recorded in the corresponding quarter of 2024.

According to the Manufacturers Association of Nigeria (MAN), this import drop is unsurprising. Manufacturing capacity utilisation, according to MAN, plummeted from 73.3 per cent in 1981 to 57 per cent last year.

Furthermore, the sector’s contribution to the economy shrank from 29.9 per cent to 8.6 per cent within the same period.

Segun Ajayi Kadir, Director General of MAN, stated that real growth decelerated from 14.7 per cent in 2014 to 1.38 per cent during the period under review.

He also noted that non oil export contributions sharply declined from 82.37 per cent in 2019 to 25.13 per cent in 2024.

Data sourced from MAN also revealed that smuggled goods, entering from land and sea borders, continue to capture a significant market share in key sectors.

This practice undercuts local prices and causes substantial revenue loss for manufacturers and local industries.

The Guardian observed that the influx of substandard and used products also threatens local manufacturing and contributes to the dwindling imports.

Further analysis shows that Nigeria’s exports continue to be predominantly crude oil, valued at N12.95 trillion and representing 62.89 per cent of total exports.

Non crude oil exports stood at N7.64 trillion, accounting for 37.11 per cent of total exports, with non oil products specifically contributing N3.16 trillion.

The significant rise in unsold goods also played a part, according to MAN. Inventory of unsold finished goods increased by 87.5 per cent to N2.14 trillion in 2024.

The Director General attributed this to low consumer purchasing power, high inflation, and rising production costs.

The NBS noted that China remains Nigeria’s highest trading partner on the import side. It is followed by India, the United States of America, The Netherlands, and The United Arab Emirates.

The most imported commodities during Q1 were Automotive Gas Oil (AGO), Motor Spirit Ordinary, Petroleum Oils and oils obtained from bituminous minerals (crude), cane sugar meant for sugar refinery, and Durum wheat.

Analysis by commodities showed that the main commodities exported to African countries in the quarter under review were ‘Petroleum oils and oils obtained from bituminous minerals’, ‘Light fuel oil’, ‘Electrical energy’, ‘Other Light oils and preparations’, and Urea.