“Diversifying the Nigerian economy is the pathway to achieving economic stability” – Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA)
“Nigeria must take decisive steps to plan beyond oil so as to reposition the nation’s economy for international competitiveness” – Gen. Yakubu Gowon
“No better time to diversify than now” – President Muhammadu Buhari
NIGERIA-BRITAIN TRADE RELATIONSHIP
Nigeria’s Top 5 Trading Partners in 2017
UK ranked 4th in Nigeria’s leading suppliers (imports)
|Imports by Country of Origin||Exports by Country of Destination|
|China 20.3||India 38.3|
|USA 8.3||US 10.2|
|Belgium 7.6||Spain 6.7|
|UK 4.4||France 6.5|
UK is Nigeria’s 4th largest import trading partner and 9th export trading partner.
Total value of imports from the UK – N96.6bn ($266.85mn) constituting about 4.11% of the total import trade.
Total value of exports to the UK – N108.7bn ($300.28mn) constituting about 3% of the total exports.
Crude oil accounted for 99% while non-crude oil accounted for only 1%.
Cocoa butter, fat and oil exported to the UK worth N190.79m ($530,000) in Q3’17.
Nigeria-UK Bilateral Trade
The Nigeria – UK bilateral trade was signed in December 1990
Trade volume between Nigeria & U.K was about £8bn in Feb 2016 and projected to exceed £20bn in 2020
Nigeria receives £400m per annum in UK aid annually
Nigerians in Diaspora remitted $19bn in 2016
UK accounted for 41.89% of the total capital inflows into Nigeria in Q3’17 – ($1736.58m)
Humanitarian aid for the 4 year period is projected at (2018 – 2022) amounts to £200bn a 50% reduction from the £100bn given in 2017.
Current State Assessment
Nigerian Economy – Embattled but Recovering
2018: A pre-election year, Economy is performing sub-optimally. Real GDP growth rate of 0.83% lags growth in potential GDP of 1.9%. Commodity dependent economy – relies heavily on oil & gas, Oil contributes approximately 83% of export earnings, Gas contributes 9.6%.
Agriculture remains the largest contributor to GDP at 25.08%. Also the largest employer of labour – employs above 40% of labour force. Structure of the economy is tilted towards services than production- 53:47.
Nigerian Economy – Policies Ahead of Economics
Still a highly import dependent economy – Marginal propensity to import: 0.68
Major import commodities: machinery & transport equipment, manufactured goods and chemicals. Unemployment+ Underemployment at 40% (Q3’17), Misery index currently at 55.13.
Increasing due to rising unemployment, No minimum wage adjustment since 2011 despite currency devaluation. One of the lowest minimum wage level at N18,000 ($1.25 per hour).
Leading commodities: cocoa, tubers, rubber, cashew, soya beans.
Download the below link for the comprehensive report on Nigerian Agriculture by Bismarck Rewane:
By Bismarck Rewane
Financial Derivatives Company Ltd