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By Chinwendu Obienyi
Nigeria’s external trade performance in the first quarter of 2026 offered a positive signal for the economy’s balance of payments position, as stronger export earnings and a moderation in import demand combined to deliver a significant trade surplus.
However, beneath the headline improvement lies a familiar challenge, the country’s external stability remains closely tied to crude oil receipts, highlighting the urgency of accelerating non-oil export growth as a pathway to long-term resilience.
Data from the National Bureau of Statistics (NBS) showed that the country’s total merchandise trade stood at N34.79 trillion in Q1 2026, comprising exports of N21.17 trillion and imports of N13.62 trillion. The result was a trade surplus of N7.55 trillion, representing a 340.88 per cent increase compared with the previous quarter.
The improvement reflected stronger export earnings, particularly from crude oil, alongside reduced import demand. Higher crude oil receipts, improved domestic refining capacity, foreign exchange constraints, and policies aimed at reducing dependence on imported goods all contributed to the stronger external position.
Yet, while the figures point to short-term strength, there is a sense of argument that Nigeria’s ability to maintain external stability over the long term will depend increasingly on the performance of non-oil exports.
According to experts, the country’s economic vulnerability to oil price fluctuations, production disruptions, and global energy market shifts remains a major risk.
The country’s export performance in Q1 2026 was supported by both oil and non-oil segments, although crude oil continued to dominate. According to the NBS, crude oil exports accounted for N11.20 trillion, representing 52.92 per cent of total exports, while non-crude oil exports contributed N9.97 trillion, equivalent to 47.08 per cent.
Within the non-oil segment, non-oil products accounted for N3.19 trillion, reflecting ongoing efforts to expand Nigeria’s export base beyond hydrocarbons. While the contribution represents progress compared with previous years, it also highlights the scale of the diversification challenge.
For decades, Nigeria’s foreign exchange earnings have been heavily dependent on crude oil. This dependence has exposed the economy to repeated external shocks, including oil price crashes, declining global demand, and production challenges caused by infrastructure gaps and security concerns.
Prior to the latest escalation in geopolitical tensions in March, global markets had widely anticipated that several major central banks, particularly the U.S. Federal Reserve and the European Central Bank (ECB) would begin easing monetary policy in 2026 as inflation moderated.
However, investors became increasingly worried that inflation may remain stubbornly elevated for longer than previously expected, complicating the policy path for central banks.
Historically, the surge in oil prices has been one of the most powerful drivers of global inflation, affecting transportation, manufacturing and food costs.
Hence, the drive towards non-oil exports is therefore not merely a trade strategy; it is increasingly viewed as a critical component of macroeconomic stability. A broader export base can strengthen foreign exchange earnings, reduce pressure on the naira, support job creation, and provide a more sustainable foundation for economic growth.
Non-oil exports as a buffer against external shocks
One of the strongest arguments for expanding non-oil exports is the role they can play as a buffer against volatility in the international oil market.
Nigeria’s oil earnings remain vulnerable to factors beyond domestic control. Global oil prices are influenced by geopolitical developments, production decisions by major oil-producing countries, technological changes, and the global transition towards cleaner energy sources.
A stronger non-oil export sector would allow Nigeria to generate foreign exchange from a wider range of products and services. Agricultural commodities, manufactured goods, solid minerals, and processed products offer significant opportunities for export expansion if supported by the right policies and infrastructure.
According to Cowry Research, Nigeria’s trade surplus is expected to remain positive, supported by strong oil revenues, higher production, foreign exchange constraints limiting imports, and gradual growth in non-oil exports. However, the research firm warned that the external sector remains exposed to oil price and output volatility, making diversification essential for sustained progress.
Agriculture’s untapped potential
Agriculture remains one of Nigeria’s most important sectors with significant export potential, but Q1 2026 data showed continued challenges.
The agricultural sector recorded total trade of N2.00 trillion during the quarter, but exports declined by 31.20 per cent year-on-year. The decline reflects persistent structural issues, including low productivity, inadequate storage facilities, logistics constraints, and limited value addition.
Nigeria has historically exported agricultural commodities such as cocoa, sesame seeds, cashew nuts, and other products. However, the country has struggled to maximise the value of these exports because much of the produce leaves the country in raw form.
Increasing agricultural export earnings will require a shift from commodity exports to processed and higher-value products. For example, exporting processed cocoa products rather than raw cocoa beans would allow Nigeria to capture more value from global markets.
Experts argue that improving agricultural productivity, investing in irrigation, strengthening rural infrastructure, and expanding access to finance for farmers and agro-processors will be critical to unlocking the sector’s export potential.
Manufacturing as catalyst for export expansion
Manufacturing remains another area where Nigeria’s non-oil export ambitions face major hurdles.
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Manufactured goods accounted for 25.26 per cent of total trade in Q1 2026, valued at N8.79 trillion. However, exports from the sector remained relatively weak at N302.64 billion.
The low export performance reflects long standing industrial challenges, including high energy costs, limited access to foreign exchange, weak logistics networks, and the cost of doing business.
A strong manufacturing sector is essential for sustainable export growth because it allows countries to move beyond raw material exports and participate in higher-value global supply chains.
Countries that have successfully transformed their external sectors have typically relied on manufacturing competitiveness. For Nigeria, improving industrial capacity could increase exports of processed agricultural goods, chemicals, textiles, machinery, and other manufactured products.
The recent improvement in domestic refining capacity also demonstrates how local production can reduce external pressures. Increased refining capacity has contributed to lower petroleum product imports, reducing demand for foreign exchange and improving trade balances.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, explained that despite the vast potential of industrialization, Nigeria continues to rely heavily on imports and the export of primary commodities.
“Over the years, several once-thriving industries have either declined significantly or disappeared altogether. These include the textile industry, tyre manufacturing, battery production, and automobile assembly. Their decline reflects deep-rooted structural challenges rather than a lack of entrepreneurial capacity or market potential.
What is needed is a deliberate and coordinated industrial compact anchored on reliable power, efficient transport infrastructure, affordable financing, policy stability, enhanced security, and strong support for local production”, Yusuf maintained.
Solid minerals emerge as a growing export opportunity
While agriculture and manufacturing faced challenges, the solid minerals sector recorded notable growth.
Solid mineral exports increased by 74.63 per cent to N102.81 billion in Q1 2026, driven by rising demand and increased investor interest.
Nigeria’s mineral resources, including lithium, gold, tin, and other industrial minerals, present significant opportunities as global demand for critical minerals increases due to technological advancement and the energy transition.
However, unlocking the sector’s full export potential will require improved regulation, transparency, investment in processing facilities, and stronger infrastructure. Rather than exporting raw minerals, Nigeria must focus on developing local processing capacity to increase value addition and retain more economic benefits domestically.
Regional trade and Nigeria’s strategic position
Nigeria’s export performance also benefited from strong regional trade relationships.
Europe remained Nigeria’s largest export destination in Q1 2026, accounting for N7.93 trillion or 37.44 per cent of total exports. Asia followed with N6.42 trillion, representing 30.31 per cent, while Africa accounted for N4.06 trillion or 19.19 per cent.
Trade within Africa was particularly significant. Within the ECOWAS region, Nigeria exported goods worth N2.20 trillion while imports stood at only N65.91 billion, reinforcing the country’s position as a major regional economic hub.
The implementation of the African Continental Free Trade Area (AfCFTA) presents additional opportunities for Nigeria’s non-oil exporters by opening access to a larger continental market. However, taking advantage of this opportunity will depend on competitiveness, product quality, and efficient trade infrastructure.
Analysts’ react
Analysts expect Nigeria’s external sector to remain favourable in the near term. Cordros Research in an emailed response to Daily Sun, noted that export growth is likely to benefit from continued expansion in non-oil exports, alongside improved oil production and elevated crude oil prices supporting oil-related earnings.
“On the import side, improved foreign exchange liquidity and exchange rate stability could support stronger non-oil imports. However, high inflation and weak consumer purchasing power may limit the pace of recovery”, they said.
The expected increase in domestic refining capacity is also likely to reduce petroleum product imports, helping to sustain the trade surplus.
Nevertheless, long-term external stability will require more than favourable oil prices. Head, Research at FSL Securities, Chiazor Victor, suggested that Nigeria must build an export economy capable of generating foreign exchange from multiple sources.
According to him, “The future of Nigeria’s external sector lies in expanding non-oil exports through stronger agriculture, competitive manufacturing, value-added mineral processing, and improved trade infrastructure”.
Conclusion
The Q1 2026 trade figures demonstrate that Nigeria has the capacity to strengthen its external position. But sustaining that progress will depend on whether the country can move beyond temporary gains from oil revenues and build a diversified export base.
For Nigeria, non-oil exports are no longer simply an economic aspiration. They are becoming a strategic necessity for achieving long-term external stability, economic resilience, and sustainable growth.
