Nigeria Trade

Subchapters:

  • Business Relationships
  • Foreign direct investment
  • FTAs ​​and Treaties
  • Development Cooperation
  • Prospective fields of study (MOP)

Business relations

Trade relations with the EU

The EU is one of Nigeria’s main trading partners – about 25% of trade. The largest import items are oil extraction equipment, vehicles, construction machinery, petroleum products, machine tools and machinery, chemicals, cement, consumer goods, food (rice) and live animals. Oil and oil products clearly dominate Nigeria’s exports. These account for roughly 95% of Nigeria’s total exports. There are also cocoa, sesame, leather, raw natural rubber, spices, pearls, precious stones and tropical woods. Thanks to the import of these basic raw materials for further processing in EU countries, the balance is passive.

2017 2018 2019 2020 2021
Exports from the EU (million EUR) 8,804.90 10,440.70 11,679.70 9,199.80 11,169.20
Imports into the EU (million EUR) 13,674.40 20,173.80 21,492.80 13,621.60 17,544.60
Balance with the EU (million EUR) 4,869.5 9,733.1 9,813.1 4,421.7 6,375.4

Source: European Commission

Trade relations with the Czech Republic

The Czech Republic is a traditional partner and friendly country. Within sub-Saharan Africa, Nigeria has long remained the 2nd most important trading partner of the Czech Republic after South Africa (2nd highest export). Main exports have traditionally been processing units, gas turbines and their parts, ethylene polymers, handguns, baby diapers, razor blades, headgear and others. Imports were dominated by platinum scrap, measuring instruments, cashew nuts, plants for perfumery. The balance with the Czech Republic is active compared to the EU balance, mainly due to the import of special equipment and machinery. Key Czech companies in business relations remain: Excalibur Intl, AERO Vodochody, VAE Controls Group, Linet, Lasvit, Czech Blades, Tonak, Veba.

2017 2018 2019 2020 2021
Exports from the Czech Republic (billion CZK) 0.2 1.3 2.4 2.1 ON
Imports to the Czech Republic (billion CZK) 1.2 0.2 2.4 0.8 ON
Balance with the Czech Republic (billion CZK) 0.9 -1.1 -0.1 -1.3 ON

Source: businesscarriers.com

Trade relations with countries outside the EU

China and India are Nigeria’s largest trading partners. Also the USA and Brazil. China is also the largest investor in terms of infrastructure construction, which is bought, among other things, by permits for the extraction and export of mineral resources. At the same time, it does not condition business relations on political requirements such as the EU.

2017 2018 2019 2020 2021
Exports from countries outside the EU (million EUR) 30 140.0 41,597.2 43,551.3 21,352.8 29,133.6
Imports to countries outside the EU (million EUR) 16,408.5 17,225.3 35,233.8 35,098.2 26 170.5
Balance with non-EU countries (million EUR) 13,731.5 24,371.8 8,317.5 -13,745.5 2,963.1

Source: EIU, Eurostat

Foreign direct investment

Paragraph 1 General comment on the state of foreign direct investment (FDI) in the country (status, sectoral, territorial structure); development; investment environment, barriers

The Nigerian Investment Promotion Council (NIPC) reports that Nigeria attracts an average of $2 billion in foreign direct investment annually, well short of the estimated $10 billion needed to achieve the desired economic growth. The downward trend in foreign investment, especially foreign direct investment, is of concern to Nigeria, which desperately needs private capital to boost economic growth and job creation.

The total value of capital imports into Nigeria in the third quarter of 2021 was $1.73 billion from $875.62 million in the previous quarter of 2021, an increase of 97.73%. Compared to the corresponding quarter of 2020, capital imports also increased by 18.47% from $1.46 billion.

In 2020, the net inflow of foreign direct investment into Nigeria was US$2,385 million. Although the net inflow of foreign direct investment into Nigeria has fluctuated widely in recent years, it has tended to increase over the period 1971–2020.

Between April and June 2021, the flow of foreign direct investment into Nigeria was approximately US$78 million. Compared to previous quarters, there was a decrease in this value. These are investments mainly in agriculture and infrastructure.

There are no direct foreign investments of the Czech Republic in Nigeria yet.

FTAs and treaties

Treaties with the EU

Post-Cotonou Partnership Agreement – ​​signed in April 2021 as a continuation of the agreement between the EU and African countries. It regulates, among other things, economic relations and development issues. Economic Partnership Agreements (EPAs): The trade regime between the EU and ACP countries provides these countries with unilateral preferences, i.e. the countries have better, more favorable terms. This regime is not formally in line with globally recognized WTO rules, and when the Cotonou Agreement was signed, the other WTO countries not affected by the Agreement therefore had to officially waive the WTO terms to the signatories of the Agreement. The “waiver” of the conditions was limited in time and its validity expired on 31 December 2007. Already in 2005, negotiations on Economic Partnership Agreements – so-called “Economic Partnership Agreements” (EPAs) between the EU and the ACP countries were started. Nigeria is the only country among the APC states that has not yet signed the EPA.

Contracts with the Czech Republic

  • Agreement on Scientific and Technical Cooperation between the Czechoslovak Socialist Republic and the Federation of Nigeria dated 8/9/1964 (not published in the collection of laws) • Agreement on Economic, Scientific and Technical Cooperation between the Government of the Czechoslovak Socialist Republic and the Federal Military Government of the Federal Republic of Nigeria dated 7/3/1979. • Loan Agreement between the Government of the Czechoslovak Socialist Republic and the Federal Military Government of the Federal Republic of Nigeria, Prague, 11/06/1979 • Agreement between the Government of the Czechoslovak Socialist Republic and the Government of the Federal Republic of Nigeria on the prevention of double taxation and the prevention of tax evasion in the field of income and profit taxes from property,

Since its establishment, the Czech Republic has not concluded any bilateral economic agreement with Nigeria. Mutual trade relations are dealt with by the common policy of the EU.

The negotiations are:

  • agreement on support and protection of investments
  • interdepartmental cooperation agreement between the Ministry of Industry and Trade of the Czech Republic and the Nigerian Federal Ministry of Trade and Industry

– interdepartmental cooperation agreement between the Ministry of Defense of the Czech Republic and the Ministry of Defense of Nigeria

Since the accession of the Czech Republic to the EU, relations have been governed by the EU’s common policy – ​​the trade agreement between the Czechoslovak Republic and Nigeria, signed on August 13, 1987, was canceled after the Czech Republic’s accession to the EU.

Developmental cooperation

The EU is one of the biggest donors in Nigeria. Within the framework of the 11th EDF, Nigeria was supposed to draw 512 million Euros in the years 2014-2020. The priority sectors are healthcare, food self-sufficiency, energy and good governance. It will be able to draw additional funds from regional programs within ECOWAS.

In the past 3 years, the Czech Republic implemented so-called small local projects aimed at helping people in need, improving their living conditions and educating young people as part of development aid.

Prospective fields of study (MOP)

Energy industry

Lack of electricity and very frequent blackouts will continue for a long time, despite the government’s efforts. The generator is essential equipment for all residential and public buildings, as well as workshops and manufacturing plants. The transmission system is outdated. The private investors who privatized the systems must carry out a rapid modernization, which is currently taking place slowly. According to the latest information, there is a growing demand for mini-hydroelectric plants and equipment for their construction, and for ecological sources of energy and technology transfer and education in this area.

Agricultural and food industry

Large urban agglomerations are growing extremely fast. This trend is particularly important for exporters (investors) of food products. Equipment for the processing of vegetable crops, meat and food production also has a large market. The population is growing rapidly, within 20 years Nigeria is expected to have up to 500 million inhabitants. The government considers the reform of agriculture and the development of the food industry to be one of the main priorities, emphasizing local production. The lack of agricultural machinery and processing technologies, as well as service and professional training, is a great opportunity for Czech companies.

Defense industry

The activities of Boko Haram pose a major problem for the security of the state. Nigeria’s budget gives substantial resources annually to the force departments (police, army) for the purchase of equipment and training. Interest in investments in domestic production and technology transfer is growing. In the context of the regional security situation, there is proven potential for Czech companies in the field of equipment supplies for ground and air forces – handguns and ammunition, light and heavy armored vehicles, artillery systems, training and combat aircraft, helicopters. Likewise, there is a demand for pilot and technician training or repairs and modernization of ground and air systems.

Healthcare and pharmaceutical industry

This traditional Czech export item is one of the priorities of the Nigerian government. Public hospitals mostly have outdated equipment that needs to be gradually modernized. The number of new private clinics for demanding and mobile patients is growing. For Czech companies, there is room for the supply of medical equipment, hospital equipment, pharmaceutical products and the provision of professional training.

Construction industry

Nigeria is investing in infrastructure construction, the construction industry is experiencing rapid growth. There is a demand for quality building materials and technologies. In connection with the construction of new residential areas, the demand for high-quality cladding material and household ceramics is growing. High-quality glass products are in demand for large interiors, such as chandeliers and similar decorated lamps.

Engineering industry

Nigeria invests in the construction of infrastructure, public buildings and housing. The mining sector is also developing dynamically. This trend will continue to strengthen, which is related to the demand for construction machinery (also second hand). The potential is mainly in connection with the growing computerization of the economy. With the Nigerian government’s interest in mining additional minerals, the need for mining machinery and mining and processing technologies is increasing.

Nigeria Trade