Nigeria’s trade deficit has widened sharply as the country’s manufacturing import bill surged, deepening concerns over the health of the economy and the sustainability of its foreign exchange reserves. According to new trade figures, Nigeria recorded a trade deficit of N14 trillion, largely driven by the growing reliance on imported manufactured goods. The data paints a troubling picture for Africa’s largest economy, which continues to grapple with weak local production capacity, rising import costs, and limited export diversification.
Analysts note that the persistent dependence on foreign-manufactured products highlights structural weaknesses in Nigeria’s industrial base. Despite years of policy measures aimed at stimulating domestic production, manufacturers still struggle with challenges ranging from inadequate infrastructure and high energy costs to poor access to credit and insecurity in key industrial hubs. These factors have left the local manufacturing sector unable to compete with imported goods, thereby placing immense pressure on the country’s balance of trade.
The heavy importation of machinery, refined petroleum products, pharmaceuticals, vehicles, and other finished goods has not only driven up the import bill but also strained Nigeria’s foreign exchange market. With the naira under continuous pressure, the Central Bank of Nigeria (CBN) has had to navigate a volatile currency market, where demand for dollars far outstrips supply. Economists warn that this trend risks further weakening the national currency and exacerbating inflationary pressures already affecting households and businesses.
On the export side, oil remains Nigeria’s primary revenue earner, but declining production levels, oil theft, and fluctuating global prices have limited the country’s ability to maximize its gains. Non-oil exports, while growing slowly, remain far too small to offset the massive outflows associated with imports. Experts have stressed the urgent need to diversify the export base by investing in agriculture, solid minerals, and value-added manufacturing to reduce overdependence on crude oil.
Stakeholders argue that unless bold steps are taken to strengthen local industries, Nigeria risks falling deeper into an unsustainable cycle of import dependence. Calls have intensified for the government to implement policies that support industrial growth, such as providing stable power supply, improving transportation networks, and incentivizing investment in local manufacturing. A shift towards backward integration and value-chain development, they say, is critical to reversing the trade imbalance.
Business leaders also warn that without decisive action, Nigeria’s widening trade deficit could undermine investor confidence and threaten long-term economic stability. They urge policymakers to prioritize reforms that create an enabling environment for manufacturers to thrive, emphasizing that a vibrant industrial sector remains key to reducing imports, creating jobs, and boosting exports.
As the trade deficit expands to N14 trillion, the figures underscore the urgent need for Nigeria to rethink its economic model. With mounting external pressures and domestic constraints, the path forward will require a deliberate push to rebuild manufacturing capacity, strengthen export competitiveness, and restore balance to the country’s trade profile.
