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Nigeria

 
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Nigeria

FOREIGN TRADE AND BALANCE OF PAYMENTS

Foreign Trade

Until the mid-1950s, agricultural commodity exports--mainly cocoa, groundnuts, palm oil, and palm kernels--earned more than the cost of merchandise imports. The demand for imports remained limited by the country's low income, lack of industrialization, negligible use of foreign inputs in agriculture, and sterling bloc restrictions. Nigeria had continued to specialize in primary products (food, raw materials, minerals, and organic oils and fats) and to import secondary products, such as chemicals, machinery, transportation equipment, and manufactures, used in Nigeria's development (see table 12, Appendix). Primary commodities comprised 98 percent of exports and 21 percent of imports in 1955, 92 percent of exports and 19 percent of imports in 1975, and 98 percent of exports and 24 percent of imports in 1985.

Minerals (largely petroleum) accounted for an increasing proportion of exports through the 1970s, increasing from 13 percent in 1955 to 35 percent in 1965, to 93 percent in 1975, and then to 96 percent in 1985 (see tables 13, Appendix). The dependence on oil and a few other export commodities made Nigeria particularly vulnerable to world price fluctuations. Nigeria's overall commodity terms of trade (price of exports divided by price of imports) fell substantially, from a base of 100 (1980) to 83.8 (1984) and 35.5 (1986), before rising to 42.6 (1987) and then falling to 34.6 (1988). Meanwhile, export purchasing power (quantity of exports multiplied by the commodity terms of trade) declined from 100 (1980) to 48.3 (1984), 23.0 (1986), 23.1 (1987), and 20.4 (1988), a 79.6 percent reduction in the purchasing power of exports in eight years.

Nigeria traded worldwide with about 100 countries, but the composition of trade by country had changed since the colonial period. During the colonial era, Britain was Nigeria's dominant trading partner. As late as 1955, 70 percent of Nigeria's exports were to Britain and 47 percent of its imports were from Britain. However, by 1976 Britain's share of Nigerian exports and imports dropped to 38 percent and 32 percent respectively. In the 1970s, Britain was replaced by the United States as Nigeria's chief trading partner. In 1988 the United States was Nigeria's best customer, buying more than 36 percent of its exports (primarily petroleum products); Britain was Nigeria's leading vendor, selling the nation more than 14 percent of its imports.

In 1990 Nigeria had associate status, including some export preferences, with the European Economic Community (EEC). As a result, it had a number of major EEC trading partners, including Germany, France, Italy, Spain, and the Netherlands. Nigeria also had an active trade relationship with some members of the Organisation for Economic Co-operation and Development, notably the United States, Canada, and Japan (see table 14, Appendix). Trade with African countries, mainly neighboring countries within the Economic Community of West Africa (ECOWAS--created in 1975), comprised only 3 to 4 percent of total trade. In the 1980s, trade with Eastern Europe and the Soviet Union constituted less than 1 percent of Nigeria's total.

Data as of June 1991

Nigeria - TABLE OF CONTENTS

  • The Economy

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    Information Courtesy: The Library of Congress - Country Studies


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