Monday , July 22 2024
LCCI Reacts as Nigeria Trade Deficits with China Worsen

LCCI Reacts as Nigeria Trade Deficits with China Worsen

Data from the National Bureau of Statistics (NBS) has shown the bilateral trade deficit against Nigeria is widening in favour of China, with a steady increase in Nigeria’s importation from the Asian country from 2019 to 2021.

The NBS data shows that Nigeria imported N6.53 trillion worth of goods from China in 9 months, January to September 2021, which is 14.8 percent higher than the N5.69 trillion worth of goods imported from the country in the whole of 2020, and 51.2 percent above total imports from the Asian country in 2019 valued at N4.32 trillion.

Details of the NBS data revealed that the N6.53 trillion imports from China in the nine months ended September 2021 represents 29.75 percent of Nigeria’s total imports from all over the world valued at N21.95 trillion within the period.

Further details of the NBS data for the nine months 2021 shows that exports from Nigeria to China was valued at N486.57 billion, N633.48 billion in full year 2020 and N595.99 billion in 2019, indicating huge export deficits during the period.

Read More: LCCI Pledges to Drive Investments Into Lagos Free Zone

Going by the prorated quarterly export figures the 2021 full year export figure is projected at N648 billion, just about 2.0 percent increase in exports compared to about 40 percent increase in imports.

During the 30 month period spanning January 2019 to June 2021, Nigeria spent about N14.10 trillion on importations from China, representing more than 28 percent of total imports valued at N50.31 trillion into the country within the period.

Commenting balance of trade position of Nigeria with China, the Director General, Lagos Chamber of Commerce and Industry (LCCI), Dr Chinyere Almona, stated: “It is true that Nigerian import from China has significantly increased in the last decade displacing the West.

“The reasons can be attributed to: The Chinese Government putting in place international trade policies that deliberately fund Chinese exports to third world countries, making their goods readily available and cheaper. Exporting from Nigeria is a tough venture considering the bottlenecks in the processes. This must be addressed to compete favourably; and some loans granted by China to Nigeria and other African countries are tied to projects that are executed using Chinese materials. All of these raise the Chinese exports to Africa”.

On what Nigeria needs to do to redress the situation, Almona said: “Nigeria must improve on its export infrastructure to boost exports and seek for cheaper sources of loans that are tied to boosting productive capacities in the country. “Once we are able to produce more, and export processes are not cumbersome, Nigeria will record higher exports and lower imports towards balancing the trade between the two countries.”

Also commenting, CEO of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf who also doubles as the immediate past LCCI Director-General stated: “International trade volume, value and direction are outcomes of business decisions. “Importers opt for imports from countries that offer the best deals. This explains why there is a high level of imports from China which has a strong competitive edge in manufactured products.

“The same is true of exports. Exporters would focus lon countries with good bargains for them as they seek to maximize returns on their investments.

“Market access issues are also important considerations. These are the factors that shape the flow of trade at bilateral, regional, continental or global levels. These are also factors that determine balance of trade outcomes for Nigeria.

“Balance of trade position is a function of imports and exports. Our recurring trade deficit speaks to the persistent weak production capacity and competitiveness of Nigerian firms. Export is very critical to remedy the situation.

“But for that to happen, our production must be competitive regionally and globally. We therefore need to create the environment for the production of quality goods at a globally competitive price. There is no other way.

“The infrastructure environment must support this aspiration. The policy and regulatory environment must align with this vision.”

About Bukola Olanrewaju

Check Also

Access Bank Joins NGX to Launch Impact Board

Access Bank Joins NGX to Launch Impact Board

Access Bank Plc, Nigeria’s leading institution in sustainable finance, was one of the participants in …

Leave a Reply

Your email address will not be published. Required fields are marked *