The Netherlands has overtaken India to become Nigeria's second-largest trade partner in 2023. This is according to the foreign trade statistics reports of the National Bureau of Statistics (NBS), which revealed the shifting dynamics within Nigeria's foreign economic engagements.
Nigeria recorded a total foreign trade of N71.8 trillion in 2023 out of which 14 of its major trading partners made up N45.4 trillion of the total trade
Meanwhile, Nigeria's trade within Africa was N4.54 trillion, behind the pre-COVID levels of N5.3 trillion. However, exports to African countries recorded N3.7 trillion just shy of the N3.9 trillion recorded in 2019 suggesting the drop was in imports.
China and the Netherlands dominate
According to the NBS data, China continued to lead as Nigeria's primary trade partner, with the trade volume reaching a historic peak of N7.49 trillion in 2023. The data affirmed China's dominant role in the Nigerian market, fueled by ongoing investments in infrastructure and trade agreements.
The spotlight, however, is on the Netherlands, which has seen a dramatic rise in its trade volume with Nigeria, escalating to N6.32 trillion in 2023. This marks a substantial increase from N5.22 trillion in 2022 and affirms a deepening economic connection between Nigeria and the Netherlands.
On the other hand, India, which has traditionally been a major trade partner for Nigeria, recorded a trade volume of N5.9 trillion in 2023. Despite showing an increase from N5.41 trillion the previous year, it was not enough to maintain its earlier position above the Netherlands in the trade rankings.
While the Netherlands's total trade with Nigeria increased by about 21% year-on-year, trade with India increased by a marginal 4%. This further means that when the total value is re-assessed based on the impact of naira devaluation, the value of trade with India in 2023 may be similar or lesser when compared to the previous year.
India started strongly in 2015, with a higher trade volume than the Netherlands. From 2015 to 2019, India's trade volume with Nigeria consistently increased, peaking in 2019 at approximately N5 trillion.
The Netherlands, while initially lagging, saw a significant jump in 2018, closely mirroring India's figures.
Both countries experienced a decline in trade volumes in 2020, likely due to the global economic disruptions caused by the COVID-19 pandemic. India's trade volume saw a sharper decline, which suggests a greater sensitivity to global economic instability.
However, both countries rebounded in 2021, with India initially leading. However, from 2022 onwards, the Netherlands exhibited a robust growth rate, eventually surpassing India in 2023 with a trade volume of N6.32 trillion compared to India's N5.9 trillion.
Further analysis shows that India overtook the Netherlands to become Nigeria's second import trade partner. Nigeria imported N2.89 trillion in goods from India in 2023, up from N2.03 trillion the previous year.
However, imports from the Netherlands dropped from N2.65 trillion in 2022 to N1.81 trillion in 2023.
This drop in imports failed to weaken total trade with Nigeria, as the West African giant exported more goods to the Netherlands in 2023.
The total exports from Nigeria to the Netherlands almost doubled, rising from N2.57 trillion in 2022 to N4.52 trillion in 2023.
Export to India fell slightly to N3.01 trillion in 2023, from N3.39 trillion recorded the previous year.
What You Should Know
This shift in trade standings could be attributed to several strategic moves by the Netherlands, focusing on enhancing bilateral ties through key sectors such as agriculture, technology, and sustainable energy. The Netherlands' geographic and logistical advantages, including major ports like Rotterdam, play a pivotal role in facilitating the increased trade volume.
The changes in Nigeria's trade partnerships are reflective of broader global economic trends, where nations are actively diversifying their economic links and seeking new markets in the face of global uncertainties.
In 2021, the Nigeria-Netherlands Bilateral Working Group (BWG) stressed that both countries need to develop more economic partnerships through trade to boost the bilateral relationship.
By 2023, the federal government signed an investment treaty with the Kingdom of Netherlands to benefit both countries.
President Bola Tinubu recently embarked on an official visit to the Kingdom of the Netherlands.
During Tinubu's visit, Prime Minister Mark Rutte of the Netherlands announced the activation of $250 million in fresh investments in Nigeria.
The Netherlands more than doubled its investment in Nigeria in 2023, with inflows reaching $391.43 million, a significant leap from $171.27 million in 2022.
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