Trade performance of the ten most traded agri-food products between Nigeria, EU28 and ECOWAS

Nahanga Verter, Ivo Zdrahal, Barbora Dankova and Winifred Udende

Abstract: This paper uses Lafay index (LFI), trade balance index (TBI) and concentration ratio to investigate the dynamics and comparative advantage of the ten most traded agri-food products between Nigeria and the world as well as the European Union (EU28) and Economic Community of West African States (ECOWAS). The country markedly recorded an adverse TBI in food trade with the world, EU28 and ECOWAS. The share of Nigeria’s food export in total food exports to the EU28 declined from 65% in 2007 to 37% in 2017. On the other hand, the share of the country’s food exports to ECOWAS rose from 2% to 14% within the same period under study. Remarkably, 5 out of 46 mostly traded food products accounted for 78%, 93% and 92% of total food exports to the world, EU28 and ECOWAS, respectively.
The LFI further reveals that Nigeria has comparative advantages and positive TBI in trading with the world, the EU28, and ECOWAS with food products, such as crustaceans, cocoa, and oilseeds. On the other hand, Nigeria has comparative disadvantages and adverse TBI in about half out of the ten most traded products with the world, EU28, and ECOWAS. The study further reveals that Nigeria mostly exports unprocessed and imports high processed food products. Food processing and export promotion policies should be heightened to diversify export food baskets and reduce excessive reliance on food imports.

Keywords: cocoa; comparative advantage; crustaceans; Lafay index; milk and cream; trade balance index

Date published: 2021-06-04