- Nigeria is currently the United States’ 54th largest goods trading partner, with US$7.8 billion in total goods trade as of 2019
- The top export categories in 2019 were: vehicles at US$938 million, cereals, especially wheat, at US$494million), machinery at US$479million, mineral fuels at US$287 million, and plastics at US$189 million
- The top import categories were mineral fuels at US$4.4 billion, special other (returns) at US$80 million, oil seeds and oleaginous fruits at US$15 million, fertilisers at US$11 million, and cocoa at US$10 million
The value of trade between Nigeria and the United States has continued to grow, data by the Office of the United States Trade Representative shows. According to the resource centre, Nigeria is currently the United States’ 54th largest goods trading partner, with US$7.8 billion in total (two way) goods trade as of 2019.
The centre also reveals that goods exports totalled US$3.2 billion while goods imports totalled US$4.6 billion during the year under preview. The U.S. goods trade deficit with Nigeria was US$1.4 billion in 2019.
Meanwhile, U.S. goods and services trade with Nigeria totalled an estimated US$10.4 billion in 2019. Exports were US$5.3 billion, while imports were US$5.1 billion. The centre also noted that the US goods and services trade surplus with Nigeria was US$251 million in 2019.
Exports between Nigeria and the United States
The Office of the United States Trade Representative noted that US goods exports to Nigeria in 2019 were US$3.2 billion, up 19.1% (US$512 million) from 2018 to 13.2% from 2009.
The top export categories in 2019 were: vehicles at US$938 million, cereals, especially wheat, at US$494million), machinery at US$479million, mineral fuels at US$287 million, and plastics at US$189 million.
U.S. total exports of agricultural products to Nigeria totalled US$608 million in 2019.
The exports included wheat at US$473 million, prepared food at US$24 million, wine & beer at US$24 million, condiments & sauces at US$11 million, and vegetable oils, especially soybean, at US$7 million.
“U.S. exports of services to Nigeria were an estimated US$2.1 billion in 2019, 5.1% at US$115 million fewer than2018, but 63.8% greater than2009 levels.”
Leading services exports from the U.S. to Nigeria were in the travel, transport, technical and other services sectors.
Imports between Nigeria and the United States
According to the office of trade, Nigeria was the United States’ 51st largest supplier of goods imports in 2019.
U.S. goods imports from Nigeria totalled US$4.6 billion in 2019, down 17.9%, US$1.0 billion from 2018, and down75.9% from 2009.
The top import categories were mineral fuels at US$4.4 billion, special other (returns) at US$80 million, oil seeds and oleaginous fruits (plants) at US$15 million, fertilisers at US$11 million, and cocoa at US$10 million.
U.S. total imports of agricultural products from Nigeria totalled US$50 million in 2019, with leading categories including cocoa beans at US$8 million, feeds & fodders at US$8 million, tea, including herbal at US$8 million, spices at US$7 million, and tree nuts at US$6 million.
U.S. imports of services from Nigeria were an estimated US$464 million in 2019, 1.3% at US$6million less than in2018 but 7.9% less than 2009 levels.
Leading services imports from Nigeria to the U.S. were in the travel, research and development, and transport sectors.
“The U.S. goods trade deficit with Nigeria was US$1.4 billion in 2019, a 51.9% decrease (US$1.5 billion) over 2018. The United States has a services trade surplus of an estimated US$1.7 billion with Nigeria in 2019, down 6.2%from 2018.”
Foreign direct investment (FDI)
US foreign direct investment in Nigeria was US$5.5 billion in 2019, a 21.5% increase from 2018.
Meanwhile, Nigeria’s FDI in the United States was US$105 million in 2019, up 29.6% from 2018. Sales of services in Nigeria by most US-owned affiliates were US$921 million in 2017, while sales of services in the United States by the majority of Nigeria-owned firms were US$5 million. “The United States is the largest foreign investor in Nigeria, with U.S. foreign direct investment concentrated largely in the petroleum/mining and wholesale trade sectors,” the U.S. government said. Nigeria is the second-largest US export destination in Sub-Saharan Africa.
The two countries have a bilateral commercial investment dialogue, led by the Department of Commerce, and was last convened at the ministerial level in February 2020.
Doing business in Nigeria
A survey conducted by PwC in Nigeria in 2016 found that Nigeria typically ranks towards the bottom end in international comparisons of the business environment.
PwC observed that in the Ease of doing business ranking from the World Bank, Nigeria is the third-worst amongst countries with over 50 million, only ahead of Bangladesh and the Democratic Republic of Congo.
“A widespread culture of corruption is regarded as the root cause of the many constraints to doing business in Nigeria,” PwC noted.
The survey further noted that business constraints are widespread and impact every aspect of doing business. These include infrastructure constraints, considered a major constraint to doing business in Nigeria.
“With a core stock of infrastructure estimated at 25% of GDP, this falls 45% points below the average value of infrastructure in middle-income countries.”
“Businesses can expect to lose up to 12% of sales to power outages, twice as much as in Kenya, through reliance on expensive alternative-diesel aggregates.”
The survey further noted that transport and logistics are difficult, with road and rail density being a fifth of India’s.
The speed of the internet, at 3kb/s per user, is 50 times slower than in South Africa, limiting the amount of communication online and the potential of the digital economy.
“Businesses also need to account for expensive and scarce financing (trade and working capital), lack of skilled labour, security concerns and a culture of corruption.
“Access to foreign currency and credit has been severely restricted over the past two years (2014-2015) associated with falling oil revenues.”
The survey further found that only every second Nigerian adult is literate on average compared to 92% and 90%in Indonesia and South Africa, respectively.