Regional tensions within the West African bloc which have led to the suspension of countries under military juntas as well as Nigeria’s foreign exchange challenges manifested in the country’s external trade data at the end of the second quarter of 2023 with the re-export trade gaining more momentum when compared to the last five quarters.
Re-export trade, which means importing goods into the country for re-export, witnessed a rising trend as it surged by 850 percent to N91.44 billion during the second quarter of this year from N9.63 billion at the end of the second quarter of 2022 with countries such as Cameroon, Spain, United States and United Kingdom, among others, the main destinations.
A re-export trade occurs when goods are initially imported into a country, before being exported to other countries. Reasons for this form of trade include sending back goods to their manufacturers when they do not meet customers’ specifications; when the re-export country serves as the middle country between the manufacturer(s) and the final destination(s) especially when the final destination is under sanctions or trade bans, or to return good imported for specific purpose to the country of origin, among others.
As against 9 countries that Nigeria had re-export trading activities with during the second quarter of 2022, the number of countries increased to 35 during the second quarter of 2023. And in terms of frequency, Nigeria’s re-export trading activities took place 13 times in Q2 2022 while it was carried out 93 times during the second quarter of 2023.
Re-export trade with Cameroon accounted for the largest bulk of this form of trade during the second quarter, with the total value of transactions amounting to N42.35 billion, representing 46.3 percent of Nigeria’s total re-export trade during the second quarter of this year.
In Q2 2022, Nigeria’s re-export trade with Cameroon amounted to N621.33 million. This implies that reexport trade between the two countries rose by 6717 percent on a year on year basis.
The analysis carried out by the Nigerian Observer pointed to the sanctions imposed on Niger Republic by ECOWAS as the basis for the upsurge in the re-export trade.
Re-export trade with Spain amounted to N13.89 billion while the re-export trade with Czech Republic summed up to N6.99 billion.
Other countries with high re-export trade are the United Kingdom, N4.88 billion; United States, N3.53 billion; Liberia, N1.6 billion, and Gabon, N1.67 billion.
Goods involved in the re-export trade in Q2 2023 to Angola for instance were concrete pumps, containers and fluids tanker, oil or petrol filters; diesel or semi diesel engines; reservoir tanks, parts and accessories of navigational instruments and appliances; parts and accessories of surveying, hydrographic, as well as tanks, tubs of a minimum capacity of 50,000 litres.
Goods meant to be used in the maritime industry were re-exported to Cameroon and these include turbines for maritime propulsion, vessels and other floating structures for breaking up, as well as calcium chloride.
Items re-exported to the Czech Republic were gears and gearing, other than toothed wheels, and other gas turbines not specified of a power exceeding 5,000kW.
Items re-exported to the United States included linear acting (cylinders), hydraulic power engines and motors, other articles of iron or steel not specified, other articles of plastics and articles of other mater, other centrifugal pumps, other gas turbines not specified of a power exceeding 5,000 kW, other, casing, tubing of stainless steel of a kind used in drilling for oil or gas, greenhouse instruments and apparatus for measuring or detecting ionising radiations.
To Spain, the following items were re-exported: Mechanically propelled vessels for the transport of goods, gross tonnage not specified in 8901, and other mechanically propelled passenger carrying vessels not specified in 8901.
Nigeria’s total external trade stood at N12.74 trillion at the end of the second quarter of 2023 comprising N5.73 trillion imports, and N7.02 trillion exports with a positive trade balance of N1.29 trillion. At half year 2023, the nation’s total trade amounted to N24.79 trillion split into N11.29 trillion imports, and N13.50 trillion exports with a positive trade balance of N2.22 trillion.