TRADE

TRADE

Nigeria depends on foreign trade to meet many of its needs, although in
recent years it has achieved a healthy trade surplus. In 2000 exports
amounted to $27.1 billion, while imports were $6 billion. The
volatility of the global oil market and changes in fiscal and import policies
cause large year-to-year fluctuations in the balance of trade. Officially
recognized trade is supplemented by considerable smuggling of
agricultural produce and manufactured goods to and from neighboring countries.

Petroleum accounts for virtually 100 percent of exports, in terms of
value. Cacao, rubber, and shrimp are also exported. Nigeria’s major trade
partners for exports are the United States, India, Spain, France, and
Brazil. Major imports are base metal manufactures, including motor
vehicles and industrial machinery; basic manufactures, including iron,
steel, paper, and cement; chemicals and related products; and food and live
animals. Major trade partners for imports are the United Kingdom,
United States, France, China, and Germany. Only a small percentage of
Nigerian exports and imports are traded with other African countries.

Despite its positive trade balance, the Nigerian economy is burdened
with massive external debt amounting in 2002 to $31.6 billion, most of it
owed to other governments and multilateral agencies. The government
has had difficulty meeting its yearly debt payments. Nigeria’s yearly
debt-servicing bill, including arrears and interest, can rival the
country’s total export earnings. Most of the debt stems from extravagant
government megaprojects prior to the mid-1980s and from imports of consumer
goods. The sudden collapse of oil prices in the early 1980s made
Nigerian financial matters worse. In recent years international lenders have
forced Nigeria to introduce reforms to restructure its economy.