A Nigerian-based independent think tank and research organisation, Pol Eco Analytics, on Wednesday, said the N6.94tn trade surplus realised in the second quarter of 2024 is not an indicator of an improved economy.
THE WHISTLER earlier reported that Nigeria’s total trade stood at N31.89tn in Q2 2024, which represents a decrease of 3.76 per cent over the value recorded in Q1 2024 at N33.1tn and an increase of 150.39 per cent compared to the value recorded in Q2 2023.
Nigeria’s total exports stood at N19.42tn, accounting for 60.89 per cent of total trade while total imports stood at N12.47tn.
The report concluded that the top trading export partners in Q2 2024 were Spain, the U.S., France, India, and The Netherlands while China remained Nigeria’s highest trading partner followed by Belgium, India, the United States of America, and The Netherlands.
The Senior Researcher and Policy Analyst, Pol Eco Analytics, Adefolarin Olamilekan said though the news is cheering, a trade surplus is an economic indicator of a positive trade balance.
Olamilekan, in a statement made available to THE WHISTLER, noted that the positive trade balance, which demonstrates the resilience of Nigeria’s economy where a nation’s exports exceed its imports wasn’t concrete enough to reduce the high cost of living and ease of doing business in Nigeria.
“Nigerian economic policymakers should certainly be paying attention to cases where a pattern of extensive and sustained current fiscal imbalance has gone badly, as a cautionary way to align fiscal and monetary policy to stabilize prices.
“We need not remind the Nigerian authority that either trade surpluses or trade deficits can work out well or poorly, depending on whether the corresponding flows of financial capital are wisely invested.”
“From a critical standpoint of economic development, the current situation in the country today with real GDP growth averaging only about 2.6 per cent per year, unemployment 37 per cent and a poverty rate of 38.8 per cent that has been creeping higher alongside the lingering cost of living crisis in the country should be a red flag for any economy”.
Pol Eco Analytics urged the federal government to explore avenues to rectify this situation by taking appropriate measures to reduce the hardship in the economy in the face of a cheering trade surplus recorded in the first and second N6.44tn and N6.94tn 2024 respectively.
“In this regard, as a matter of national priority, we call on President Tinubu and his Economic team, to critically invest in sectors of the economy that would strategically lead to an export-oriented economy, as its government seeks a more strategic diversification and revenues from the oil and gas sector to help the growth and development of Nigeria’s economy,” Olamilekan said.