By Abba Hamisu Sani
Africa-Press – Nigeria. Nigeria is the Major economic player in Africa and it’s major source of revenue is oil which contributed about eighty percent of the foreign earning.
Foreign trade captures the monetary value of goods and services between Nigeria and other countries of the world. It is a very important component of the balance of payment data as it indicates the amount that comes into the economy through the sales of goods as well as what it spent on the importation of various items.
A foreign trade surplus occurs when the export earnings of a country surpasses the import bill, while a trade deficit occurs when import spending surpasses export earnings. Nigeria recorded its first quarterly trade surplus in over two years in Q4 2021, as crude oil prices, which is a major source of Nigeria’s foreign inflow already appreciating
Nairametrics reported in December 2021 that Nigeria’s foreign trade increased by 58.6% year-on-year in the third quarter of 2021, reaching a record high of N13.28 trillion from N8.38 trillion recorded in the corresponding period of 2020.
statistics indicate that the surge in total trade was attributed to the 51.5% increase in import bill, which however, resulted in a deficit of N3.02 trillion balance of trade. During the period also, crude oil export increased by 78% year-on-year from N2.42 trillion in third quarter of 2020 to N4.03 trillion in Q3 2021.
Nigeria’s foreign trade deficit can be attributed to the fall in the price of crude oil towards the end of 2019, when crude oil prices fell below to $60 per barrel in October 2019 during the first outbreak of the covid-19 pandemic.
The bearish performance in the crude oil market extended into 2020, as the price of Brent crude fell to as low as $15.17 per barrel in April 2020, before picking up later in the year.
Dependence on imports continues to weaken trade position of Nigeria
The continuous reliance on imported items by Nigerians without commensurate export value continues to erode our weak earnings, further piling more pressure on our exchange rate. Crude oil export, which accounts for over 90% of Nigeria’s FX earnings has been affected in recent times by the combination of market performance, cut in OPEC supply, which has been exacerbated by our inability to meet production quota.
According to the National Bureau of Statistics, Nigeria’s daily crude oil production declined to 1.5 million bpd in Q4 2021 from 1.57 million bpd recorded in the previous quarter. Its average production capacity endured four consecutive quarters of decline in 2021.
Also, the dependence on foreign goods to meet local demands has made it difficult for Nigeria to boasts of a noteworthy foreign trade balance because the little FX that finds its way into the economy is being used to finance export obligations, hereby tightening FX liquidity in the economy.
Additionally, despite the amount spent on the agricultural sector by the Central Bank of Nigeria has not been able to improve the agricultural value chain and facilitate significant Agric export.
In comperism with Nigeria a Country with more than two hundred Million Population with less foreign earning Compared to Vietnam a Country of with not up to hundred Million People.
These Countries were all under developed nations.
Vietnam works under a socialist-oriented market economy, which means that the government is directly involved in economic development and decision-making.
Currently, it is a mix between this state-planned economy and a market economy, which is controlled by supply and demand. The eventual goal of the government is to achieve socialism. During the 1980’s, the Communist Party established this unique economic framework in an attempt to move away from the Soviet-type economic planning that was then in place.
Its total gross domestic product (GDP) for 2013 was $170.565 billion with a GDP per capita of $2,073. The labor force is made up of 54.61 million people. The biggest percentage of these individuals work in agriculture (44.3%), services (32.8%), and industry (22.9%). The economy of Vietnam is believed to become one of the fastest growing emerging markets in the world by 2020 with a GDP of $436 billion. According to this estimate, it will be 70% the size of the UK economy by 2040.
Leading Industries Of Vietnam
The economy of Vietnam is mainly reliant on foreign direct investments in order to promote growth. The largest industries here are services which make up 49.75% of the GDP, industry which makes up 33.25%, and agriculture which makes up 17% of GDP. Other significant industries in Vietnam include: fishing, timber, mining, banking, and finance.
Top Export Goods And Partners
Today, Vietnam is the 28th largest export economy in the world, exporting $165 billion worth of goods every year. Its principal export goods include: broadcasting equipment ($23.8 billion), computers ($7.98 billion), crude petroleum ($6.87 billion), leather footwear ($6 billion), and integrated circuits $4.6 billion). The majority of these exports go to the following countries: the US ($29.9 billion), China ($17.5 billion), Japan ($15.2 billion), South Korea ($7.92 billion), and Germany ($7.64 billion).
Mr. Adeola Ajakaye who is an economic analyst and Journalist with more than 25 years experience in Covering Nigerian economic sector described Nigerian economy and the Foreign earning as unfortunate compared to small economy Countries with little natural and human sources but earn more than Nigeria in terms of Growth Domestic Product and foreign exchange.
Mr. Adeola Ajakaye , Economic analyst and Journalist
He added that Nigerian economy handlers does give less Priority to Production but Consumption.
Ajakaye said since colonial Period Nigeria focuses on Providing raw materials to European Countries Particularly Britain.
It also continues the same way after the Independence even though there was little shift in the early 60th and 70th.
When former Military head of State Yakubu Gawon introduces the In diginization policy where both Government and private Nigerian business owners established Companies.
The economic journalist stated that Nigerian economy defend majorly on one Product which is oil unlike Vietnam a country with diversified economy such as Agriculture ,Information Technology ,Communication facilities and oil
Ajakaye Said Nigeria Can only change the situation when the leadership of the most Populous black nation diversify the economy of the country and avoid corruption which courses the diversion of the huge Countries foreign resources.
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