International Trade in Nigeria

News Related to International Trade in Nigeria

Business outline for Nigeria

Economic Overview

The second biggest African economy and the eigth biggest oil exporter in the world, Nigeria was stronly hit by the world economic crisis, which led to a decline in the oil price. In 2010, the GDP growth however reached 7.4%, stimulated by the economy recovery adn the increase in oil price. This trend should continue on this level in 2011.

During his tenure, the former President Olusegun Obasanjo had launched the National Economic Empowerment Development Strategy (NEEDS). This policy aimed to boost growth in the non-oil sector and improve macro-economic stability. These issues remain a priority for the current Head of State Umaru Yar'Adua. In addition, the country has launched a range of economic policies whose purpose is to make the State one of the top twenty global economic powers. Handing the energetic crisis, food security, employment, the development of transports and the financial reform are the main goals. More short-term, the authorities are committed to reducing the budget deficit and controlling inflation.

Despite the country's economic dynamism, Nigeria's social report is lower than the average in African countries. Half the population lives under the poverty threshold, pandemics are rife (HIV, tuberculosis), infant mortality is high and there are significant inequalities.

FDI in Figures

Today, Nigeria is the main recipient of FDI in sub-saharan Africa. However, the slowing down of the global economy and the deterioration of security in the country, have curbed investments in 2009.  Nevertheless, FDI is expected to remain substantial in the coming years, with the priority being in the oil and liquid natural gas sectors.

However, the country retains advantages such as a partially privatized economy, an advantageous taxation system, significant natural resources and low-cost labor. On the other hand, widespread corruption, political instability, lack of transparency and the poor quality of infrastructures, limit FDI potential.

The main investor countries are the United States, China, and the Netherlands.

Foreign Trade Overview

Nigeria is a country open to the foreign trade, which represented around 60% in 2009. The country has been improving access of non-agricultural products to its market, but at a rather slow pace. The trade policy aims to promote and diversify exports by strengthening national competitiveness and liberalizing by reducing subsidies.

Customs duties are not very high. Despite attempts at liberalization, Nigeria's trade regime continues to be protectionist in certain sectors like agriculture. However, raw materials and intermediate goods enjoy tariff concessions. Import restrictions and tariff protection have effected trade development and resulted in the increase of consumer prices. Limited financial means, a crumbling economy and the weak official exchange rates have limited trade growth.

The trade balance is positive. After a clear decrease of the surplus in 2009, due to the drop in income from oil, the surpus again grew and should remain comfortable in the coming years.

Nigeria's main trade partners are the United States, the European Union and China.