The Centre for the Promotion of Private Enterprise (CPPE) has urged the Federal Government to institute reforms in the oil and gas sector, to improve Nigeria’s balance of trade.
Dr Muda Yusuf, Founder, CPPE, gave the advice on Friday in Lagos where he spoke on the background of a report by the National Bureau of Statistics (NBS) that Nigeria recorded N927.2 billion trade surplus in first quarter 2023.
Trade surplus is an economic indicator of a positive trade balance in which a nation’s exports outweigh its imports.
Yusuf, who described the report as a “paradox”, noted that Nigeria’s highest import bill was coming from importation of petroleum products and crude oil its biggest export.
He said that the report showed that Nigeria was not sufficiently addressing competitiveness issues in the economy.
Yusuf said if Nigeria had taken competitiveness issues more seriously, this would have allowed the country a more positive and favourable balance of trade.
He said, “without a competitive non-oil sector, it would be difficult to boost non-oil exports.
“This is why our balance of trade will continue to be in bad shape.
“Importation of petroleum products continued to dominate our import bill. This is of course, a sad commentary for an economy that is an oil producing country.
“This is the price we are paying for not instituting reforms in the oil and gas sector over the past five decades.”
The CPPE boss added that the Nigerian economy was diversified in structure, but not in sectoral earnings, especially foreign exchange earnings.
He said that about 90 per cent of Nigeria’s foreign exchange earnings came from oil and gas, which would have allowed the country a more positive and favourable balance of trade.
To correct Nigeria’s balance of trade position, Yusuf said that there was the need for government to create an enabling environment for manufacturing to add value on import substitution.
Nigeria’s total exports according to NBS stood at N6.49 trillion, and imports at N5.56 trillion, in the first quarter of 2023.
In the quarter under review, the nation’s total trade stood at N12.05 trillion, higher than the N7.86 trillion recorded in the corresponding period (Q1) of 2021.