Market News

By Arinze Nwafor

Nigeria’s non-oil export value in the first quarter of 2025 was N3.17tn, extending an upward streak since Q4 2023. Stakeholders laud this performance, but they are bothered that data gaps continue to plague the sector’s assessment and tame the non-oil trade growth surge, ARINZE NWAFOR writes

Despite Nigeria’s non-oil exports posting a 78.07 per cent year-on-year growth in the first quarter of 2025, stakeholders have raised concerns that the figures do not fully reflect the actual value of goods leaving the country, particularly due to the informal nature of a large chunk of trade activities.

Foreign trade data for Q1 2025, as reported by the National Bureau of Statistics, indicate that non-oil exports increased from N1.78 tn in Q1 2024 to N3.17 tn in Q1 2025, accounting for 15.38 per cent of total exports, up from 9.28 per cent the previous year. This represents a nominal increase of N1.39 tn in value, signalling what appears to be a steadily growing diversification of Nigeria’s export base away from crude oil.

Since recording N677.57bn, which represented 6.55 per cent of total exports in Q3 2023, non-oil exports have grown nominally and as a share of non-oil exports in total exports. It has sustained this growth for six consecutive quarters, with agricultural exports leading at N1.7 tn and manufacturing goods exports at N294.43 bn.

While the oil sector has remained volatile, the non-oil export sector has surged ahead, growing nearly eight times faster. But concerns are rising over Nigeria’s export data, as experts argue that the actual value of non-oil exports is significantly higher than what the NBS reported.

For these stakeholders, evaluating export performance while many cross-border trades remain undocumented is risky. For instance, Nigeria’s exports to African countries, which are largely driven by small and medium-sized businesses through land borders, declined by 9.19 per cent to N1.85 tn from N2.04 tn in Q4 2024. Analysts warn that this apparent decline in intra-African trade could be misleading due to the informal nature of many transactions, which remain undocumented.

Informal cross-border trade is hardly documented

It is hard to quantify the value of undocumented informal cross-border trade in Nigeria. In May, the Nigerian Export Promotion Council reported that it tracked up to $31.8m in unrecorded transactions from exports in 2024.

The PUNCH reported that the NEPC and the National Bureau of Statistics have signed a memorandum of understanding to improve the tracking and documentation of informal cross-border trade.

According to the Executive Director and Chief Executive Officer of NEPC, Nonye Ayeni, “Informal export trade, representing millions of dollars in goods and services, has remained largely outside our official records. Informal export trade data collected by NEPC state offices from major corridors in Kano, Jigawa, Kebbi, Zamfara, Katsina, Sokoto, Lagos, Ogun, and Adamawa reveal transactions valued at over $31.8m in some months of 2024.”

Informal cross-border trade is an old and widespread phenomenon. A 2022 Free Trade Nigeria report citing the Global Initiative Against Trans-border Organised Crime stated that informal trade made up an estimated 30 to 40 per cent of total intra-Southern African Development Community trade, with an estimated value of $17.6bn.

The report added that “70 per cent of these trades include commodities in either raw or semi-processed goods produced in other countries.” It also stated that in West Africa, the informal sector, and particularly in the Republic of Benin, represents approximately 50 per cent of Gross Domestic Product and 90 per cent of employment.

These statistics point to the existing concern that there is a significant underestimation of trade flows in African trade. While stakeholders and government officials like Ayeni affirm that “informal cross-border trade is not a distant or marginal activity but a vital part of the economy that supports livelihoods, strengthens regional supply chains, and contributes significantly to national and continental economic resilience”, they believe that these data gaps need to be plugged.

In separate interviews with The PUNCH, stakeholders, including the Centre for the Promotion of Private Enterprise and the Lagos Chamber of Commerce and Industry, pointed to bureaucracy and an insufficiently equipped customs service overseeing Nigeria’s borders as aggravators of trade data gaps to address.

Red tape discourages trade formalisation

Director of the CPPE, Dr Muda Yusuf, reacting to the Q1 2025 trade data, expressed serious reservations about the official export figures. According to him, more than 50 per cent of non-oil exports are informal and, as such, are not captured in national data.

“The figure that Nigeria’s exports to African countries crashed by N631.52bn is probably an underestimation,” Yusuf said. “It probably underestimates the actual non-oil exports. Most of our non-oil exports are informal, especially within our sub-region. These exports are across the border and not recorded.”

He pointed out that while large firms and commodity traders dealing in cement or cocoa might be reflected in the statistics, the bulk of goods traded by small-scale exporters, particularly to neighbouring African countries, are not.

Yusuf remarked, “Most of our export transactions are informal. Close to 50 per cent of it. A substantial part of our exports to African countries, especially our sub-regions, are unrecorded.”

According to the CPPE director, the current documentation processes are too bureaucratic and expensive for small traders, making informal trade the more attractive option.

He explained, “These informal sector people don’t have time. They move at a very fast pace and don’t have time to fill out documents. You have a border at maybe Seme, but you are producing maybe in Saki in Oyo State. The custom post where you can do the documentation may be in Ibadan. How will you coordinate all that? Most of them are small businesses anyway. They don’t have the scale that can afford to go from office to office to fill documents before they carry their products across the border.

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 “So, unless we can simplify the process, reduce the documentation, and make it easy for them to do whatever little documentation you do at the border. You know, many of our borders are still closed. Unless we simplify the process, reduce the documentation, and make it easy to carry out the necessary paperwork at border points, we will continue to miss out on capturing a huge volume of trade.”

He added that many of Nigeria’s borders are closed to trade, apart from the Seme and the Maradi border in the North, which have encouraged informal crossing across even those borders. “Apart from the Seme and the Maradi border in the north, only a few of our borders are open. The others are still closed to trade. This has encouraged a lot of informal crossing.”

Yusuf dismissed suggestions that taxation could play a role in formalising informal exporters, saying, “No, it does not. This is about trade documentation and the closure of porous borders.

He warned that small-scale exporters will avoid government processes that remain laborious and costly, where they have to travel miles to complete documentation.

Smuggling clouds export picture

Yusuf also raised concerns about the rising incentive to smuggle petroleum products due to price disparities across the borders, stating, “PMS price per litre in the Benin Republic is about N1,500. Here, even in the North, we are buying at N900 to N1,000. So the incentive for smuggling has increased.”

While he noted that smuggling should not be considered part of proper export activity, he said it further illustrates the challenge of tracking actual trade volumes.

Yusuf maintained that “If the government simplifies the export process, small traders will be more willing to formalise their operations.” He urged the Federal Government to reduce the documentation and the bureaucracy involved in exports.

Informal trade is entrenched

President of the LCCI, Gabriel Idahosa, corroborated the claim that Nigeria’s export data under-represents actual trade volumes, stating, “It’s well established for a long time that every day, a lot of goods leave Nigeria undocumented through our borders.”

He pointed to smaller ports such as those in Calabar and informal corridors used by traders moving goods to Equatorial Guinea, São Tomé, and Príncipe. Idahosa explained, “The exports that are recorded are those of large and medium-sized companies, especially where they are financed by banks. It’s been well known that our exports are significantly understated because of informal trade across the borders.”

The LCCI president pointed out that informal trade has been a feature of the Nigerian economy for decades and is unlikely to disappear anytime soon. According to him, “There is not much the government can do in the short term. In most developing countries, like Nigeria, informal cross-border trade is very high. People move goods across borders using cars, motorbikes, or even on foot. It’s difficult to monitor that.”

He, however, acknowledged that future improvements in border infrastructure could help formalise more trade. “If we had trains running across the borders, it would be easier to document everything on board,” he said. “But right now, people can just drive through the bush and cross the border.”

Call for a modernised customs system

Idahosa stressed the need for a more efficient Nigeria Customs Service with improved systems and better border infrastructure, noting, “If customs officers could check all goods passing through the borders, that might help. But that would also cause heavy congestion.”

He added that current data might be based on periodic surveys by the NBS but argued that such methods cannot substitute for actual, real-time tracking. “It will require a lot of investment in customs equipment and processes,” he asserted.

Idahosa warned that without efficient data-gathering systems and proper infrastructure, Nigeria will continue to have gaps between recorded and actual exports.

Efforts by government agencies

NEPC Executive Director Nonye Ayeni has acknowledged the challenge of unrecorded trade and repeatedly said efforts were underway to address it.

Ayeni said in a recent press interview, “We are trying to mainstream informal trade. The highest ever that Nigeria has recorded in terms of non-oil export was $5.4 bn in 2024. But there are a lot of exports going out through different corridors.”

She stressed that the NEPC was collaborating with the Central Bank of Nigeria and the NBS to document and generate credible data. “We’re working to bring some of this export into the mainstream. Then we’re also mainstreaming informal trade so that all that is captured,” she added.

Ayeni also mentioned that the NEPC is working with exporters to ensure value addition and increased transparency, saying, “We are committed to making sure that the non-oil export increases in Nigeria. There are a lot of initiatives underway. We are committed to ensuring that Nigeria’s non-oil export numbers not only increase but also accurately reflect reality.”

All the experts agreed that reducing bureaucracy, opening borders, and investing in customs infrastructure are key steps towards capturing the true value of Nigeria’s non-oil exports.

Arinze Nwafor