Following increased export of finished and unfinished goods, Nigeria's total trade value will hit N34.05 trillion by the end of 2013 and will climb further to N52.38 trillion in 2017, experts at FBN Capital have said.
They, however, warned that developments in North and South America, as well as Asia might impact on Nigeria's trade position and could have a pass-through effect on domestic prices and interest rates.
FBN Capital in their review of the nation's economy cautioned that any Nigerian bank that engaged in trade finance must have correspondent banks in countries such as United States, China and India that are the nation's leading export partners.
According to them, "Looking at Nigeria's export partners, United States is on top of the list followed by Brazil and closely followed by China. On the other hand, China is Nigeria's number one import partner followed by the United States while India occupies the third position. The implication of this is that any Nigerian Bank that engages in trade finance must have correspondent banks in these regions.
"Top on the list of the imported goods are: Boilers, Machinery & Appliances, Vehicle, Aircraft & Parts, Base Metals & Articles of Base Metals, products of Chemical & Allied Industries and Vegetable Products. The leading export commodities are: Mineral Products, Live Animals & Animal Products, Plastic, Rubber & Associated Articles and Prepared Foodstuffs, Beverages, Spirits & Vinegar."
Going forward, the experts stressed that factors such as imports and exports would be the main drivers of foreign trade in Nigeria.
"Within the next three years, imports may increase as a result of the importation of equipment that will be required in the power sector of the Nigerian economy.
After this period, we expect imports to drop because of the following factors: local capacity in the cement sector and increase on import duties on some goods where Nigeria has comparative advantage. The diversification strategy of the FGN from oil to non-oil, efforts to improve infrastructure in the country to make the country's goods competitive and the improvement in the global economic activities should boost Nigeria's exports during the forecast period," they stated.