What do Spain, France, and the Netherlands have in common? Beyond geography, they form a vital trio of destinations driving Nigeria’s surging export sector. With a wealth of natural resources and a diverse economy, Nigeria relies heavily on exports to balance its trade and generate foreign exchange. This year Nigeria recorded a trade surplus of N1.89 trillion, as its total exports amounted to N10.35 trillion, while its total imports were N8.46 trillion. Nigeria’s total merchandise trade reached N18.804 trillion, an increase of 54.62 percent from the previous quarter and 53.16 percent from the same quarter last year.
Different factors influence the trade patterns between Nigeria and its top export destinations. These factors include the price and quality of the products, the trade agreements, geopolitical and economic situations, and consumer behaviors. For example, Nigeria’s exports to Spain are mainly crude oil and natural gas, which are in high demand in the European market. Nigeria’s exports to the Netherlands are more diversified, including cocoa beans, rubber, and other agricultural products. While the top five export destinations may vary slightly between quarters, certain countries consistently rank high, indicating their crucial role in Nigeria’s foreign trade. Here are Nigeria’s top export destinations.
Spain
This country imported N1,274.07 billion worth of goods from Nigeria about 12.31% of the total exports. The exports were predominantly petroleum oils and oils obtained from bituminous minerals and crude. The main factor that influences this trade pattern is the high demand for Nigerian crude oil and natural gas in Spain, which is a major importer and consumer of energy in Europe. The trade relationship between the two countries is based on the mutual benefit of their energy sectors, as Spain is a major importer of oil and gas and Nigeria is a major exporter. The trade surplus with Spain also supports Nigeria’s foreign exchange earnings and fiscal revenues, as well as fostering bilateral cooperation in various sectors, such as agriculture, tourism, and education. However, it also exposes Nigeria to the continuous dependency and vulnerability of relying on a single commodity for its export earnings and the potential environmental and social costs of oil and gas production and transportation. The implication for Nigeria’s foreign relations is that it fosters a cordial and constructive relationship between Nigeria and Spain, which is a significant member of the European Union and the United Nations and a partner in promoting trade, investment, tourism, and cultural exchange between the two countries.
The Netherlands
The Netherlands is a major refining and distribution hub for oil and gas in Europe, and Nigeria is one of its key suppliers of crude oil. This country imported N988.66 billion worth of goods from Nigeria in Q2 2023, about 9.56%, mainly petroleum oils and oils obtained from bituminous minerals, and crude. The trade relationship between the two countries is also facilitated by the presence of Dutch companies in Nigeria, such as Shell, FrieslandCampina, and Heineken. The implication of this trade relationship for Nigeria’s economy is that it provides a steady source of foreign exchange earnings and contributes to the country’s GDP growth. However, it also exposes Nigeria to the volatility of oil prices and the risk of Dutch disease, which is the negative impact of an over-reliance on natural resources on the non-oil sectors of the economy. The implication for Nigeria’s foreign relations is that it fosters a strategic partnership with the Netherlands, which is a key ally in the European Union and a supporter of Nigeria’s development agenda.
The United States of America
The US imported N718.63 billion worth of goods from Nigeria in Q2 2023, mainly petroleum oils and oils obtained from bituminous minerals, and crude. The main influence of this trade pattern is the preferential access that Nigerian exports enjoy under the African Growth and Opportunity Act (AGOA), which is a US trade policy that grants duty-free and quota-free treatment to eligible African countries for certain products, including crude oil, textiles, and agricultural goods. The implication of this trade relationship for Nigeria’s economy is that it enhances the competitiveness and diversification of Nigerian exports and creates employment opportunities in the export-oriented sectors. However, it also subjects Nigeria to the uncertainty and complexity of US trade policy, which can change depending on the political and economic interests of the US government. The implication for Nigeria’s foreign relations is that it strengthens the bilateral ties between Nigeria and the US, which is a major global power and a partner in security, democracy, and development.
Indonesia
Indonesia imported N758.59 billion worth of goods, about 7.33% of Nigeria’s total exports. It consisted mostly of natural gas, liquefied. This trade pattern is the growing demand for Nigerian natural gas in Indonesia, which is a major importer and consumer of liquefied natural gas (LNG) in the region. Indonesia is a net importer of natural gas and Nigeria is a net exporter. The implication of this trade relationship for Nigeria’s economy is that it provides a lucrative market for Nigeria’s LNG exports and generates substantial revenues for the government and the private sector. However, it also exposes Nigeria to the competition and price fluctuations in the global LNG market, which is influenced by the supply and demand dynamics of other major producers and consumers, such as Qatar, Australia, China, and Japan. The implication for Nigeria’s foreign relations is that it enhances the cooperation and friendship between Nigeria and Indonesia, which are both members of the Organization of Islamic Cooperation (OIC) and the Non-Aligned Movement (NAM) and share common interests and values in promoting peace, stability, and development in their regions and the world.
France
France imported N720.45 billion worth of goods from Nigeria making up about 6.96% of the total exports. The exports were largely petroleum oils and oils obtained from bituminous minerals, and crude. The trade relationship between the two countries is influenced by the historical and cultural ties, as well as the presence of French companies in Nigeria, such as Total, Lafarge, and Air France. The implication of this trade relationship for Nigeria’s economy is that it boosts Nigeria’s foreign exchange earnings and contributes to the country’s GDP growth. However, France is committed to reducing its carbon footprint and increasing its renewable energy sources. This exposes Nigeria to the challenges of energy transition and environmental sustainability. The implication for Nigeria’s foreign relations is that it strengthens the bilateral cooperation between Nigeria and France, which is a permanent member of the United Nations Security Council and a leader in the Francophone community.