Despite Forex Shortage, Nigeria’s Imports Increase By N12.11trn
According to the Central Bank of Nigeria (CBN) and the National Bureau of Statistics (NBS) data, Between 2016 and 2021 Nigeria’s import bill rose from N8.73trn to of N20.84trn. This implies that within the five-year period, imports into the country rose by N12.11tn or 129.10 per cent. The CBN data show that the nation’s imports have been rapidly increasing since 1980.
The CBN stated that Nigeria’s import bill rose from $16.65bn in 1980 to $67.05bn in 2014, a development that has had negative impact on the country’s exchange rate. According to a financial report released last month, Nigeria’s rapidly growing appetite for imported goods, among other things, creates a large demand for the United States dollar while supply remains poor.
This factor contributes to the continuous deprecation of the naira against the dollar, the report noted. An analysis of data from the Nigeria Bureau of Statistics showed that in Q1 2016, Nigeria imported goods worth N1.45tn, the figure rose to N2.06tn in Q2, N2.41tn in Q3 and further to N2.51tn in Q4.
Meanwhile, a breakdown of total imports in 2021 revealed that in Q1 2021, Nigeria imported N6.85tn worth of goods and N6.95tn in Q2. The country’s quarterly import bill rose sharply in Q3 to N8.13tn but fell to N5.94tn in Q4. Further analysis of the foreign trade report by the NBS revealed that total exports for 2021 was N18.91tn, creating a trade deficit of N1.94tn.
Speaking on the development, a renowned economist and a former presidential candidate, Pat Utomi, explained that the country had a huge appetite for imports because of insufficient domestic production driven by worsening insecurity and stringent government regulations. He said while there were many interventions being introduced by the government and the CBN to reduce imports and shore up exports, most of the initiatives were fraught with inconsistencies and corrupt practices which prevent real impact.
He said, “You will notice that Nigeria’s top imports which are food products and motor spirits are things that we should be exporting because we are a food-producing nation and we have oil in abundance. This is scandalous. “But the reason this is so is simple; firstly, access to farms is problematic. I am in the agriculture value chain business and farmers say to us ‘we can’t supply to you, because we are afraid to go to our farms’. So the insecurity contributes significantly to poor farm output.
“Beyond insecurity, government regulations and policies also hinder production in various sectors.” He added that the Nigerian environment made production difficult and the little money that came from oil was used to import goods for consumption.