HomeBussinessNetherlands overtakes India as Nigeria’s second largest trade partner

Netherlands overtakes India as Nigeria’s second largest trade partner

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The Netherlands has overtaken India to become Nigeria’s second-largest trade partner in 2023 behind China, revealing shifting dynamics within Nigeria’s foreign economic engagements, the latest foreign trade statistics reports of the National Bureau of Statistics (NBS) have shown.

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 remains poor at 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.

According to the NBS data, China continued to lead as Nigeria’s primary trade partner, with the trade volume reaching a staggering N7.49 trillion in 2023. This affirms China’s dominant role in the Nigerian market, fueled by ongoing investments in infrastructure and trade agreements. The Netherlands has also seen a dramatic rise in its trade volume with Nigeria, escalating to N6.32 trillion in 2023, from N5.22 trillion in 2022, showing a deepening economic connection between both countries.

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’ total trade with Nigeria increased by about 21 per cent year-on-year, trade with India increased by just four per cent. This implies 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 less when compared to the previous year.

India started strong in 2015 and till 2019, her 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; while exports to India fell slightly to N3.01 trillion in 2023, from N3.39 trillion recorded the previous year.

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. 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 and last year, the federal government signed an investment treaty with The Netherlands to benefit both nations.

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