PROBLEMS OF A POOR OIL EXPORTER - NIGERIA'S FOREIGN TRADE BETWEEN 2000-2015

Abstract

Nigeria is the largest oil extractor and exporter in Africa. Its economy is vastly monocultural; petroleum products accounted for more than 90 percent of the country’s exports during the period under review.
Some diversification can be observed after 2005, but mostly occasional trades; there is no leading sector or product. However, the country has alternative export products with comparative advantages.
The country's exports and imports have been slowly increasing since the nineties, with significant growth beginning in 2005 and peaking in 2011.
The substantially reduced amount of import of Nigerian oil by the USA, along with low oil prices, reduced oil revenues by nearly a third to 2015. The country maintained its positive foreign trade balance in 2015, but the surplus was at the lowest level this year during the examined period. Adapting to the declining income, imports after 2011 show a significant downturn.
Between 2000 and 2010, Nigeria ranked as 120th or 121st on the Economic Complexity Index. After 2010, the complexity of the economy has gradually improved, ranking 103rd on the index with 33 products with an RCA higher than one by 2014.
The Federal Government’s diversification strategy encompassed numerous export promotion measures, but they proved to be less effective than expected. The only truly effective stimulus was direct export promotion, which is in opposition with WTO norms, and application does not provide long-term benefits for domestic operators.
It can be stated that, despite the declared intention of the Government, Nigeria has not started diversification, it cannot effectively use the petrodollars to develop globally competitive industries.