UK-Nigeria Trade Dynamics and Economic Shifts
The United Kingdom’s trade relationship with Nigeria has seen significant changes in recent years, particularly in the flow of goods and services. According to a comprehensive report released by the UK Department for Business and Trade, refined oil accounted for over two-thirds of the total goods exports from the UK to Nigeria during the four quarters ending June 2025. This figure rose sharply to £1.5 billion, reflecting a substantial increase compared to previous periods.
Key Export Categories and Growth Trends
Refined oil was the dominant export category, making up 68.8% of all goods exported from the UK to Nigeria during this period. This represents a 62.8% increase compared to the same period in 2024. The report highlights that total UK exports to Nigeria increased by 12.3% to £5.6 billion, while imports from Nigeria rose by 8.2% to £2.3 billion. As a result, total bilateral trade in goods and services between the two countries reached £8 billion, marking an 11.1% increase or £793 million from the previous year.
In addition to refined oil, other key export categories included toilet and cleansing preparations valued at £55.8 million, general industrial machinery worth £42.7 million, textile fabrics at £40.1 million, and mechanical power generators estimated at £35.1 million. All five of these categories experienced growth compared to the previous year, with industrial machinery exports rising by 36.4%, toilet and cleansing products increasing by 26.5%, textile fabrics growing by 14.5%, and mechanical power generators expanding by 8.7%.
Services and Goods Exports
While goods exports accounted for £2.2 billion—approximately 38.4% of total UK exports to Nigeria—services made up the remaining £3.5 billion, or 61.6%. However, there was a slight decline in services exports, which fell by 1.1% during the period. Despite this, the overall trade in goods and services remained robust.
On the import side, crude oil was Nigeria’s top export to the UK, amounting to £1.3 billion and representing 73.1% of all goods shipped to Britain. Refined oil followed closely at £223.8 million, accounting for 13.1%, while gas exports totaled £167.8 million, or 9.8% of total imports. Other notable exports included beverages and tobacco valued at £14.6 million, which saw a 29.8% increase, and plastics in primary forms worth £12.8 million.
Economic Implications and Policy Changes
The data also revealed that gas exports from Nigeria to the UK surged by 75% year-on-year, making it the fastest-growing category. Refined oil exports increased by 62.6%, and crude oil shipments grew by 7.9%. These trends are partly attributed to the expansion of Nigeria’s refining capacity, such as the Dangote Petroleum Refinery, which is designed to process up to 650,000 barrels of crude per day and plans to double its production capacity.
The UK recorded a trade surplus of £3.3 billion with Nigeria in the four quarters ending June 2025, up from £2.8 billion a year earlier. While the goods trade surplus widened to £441 million from £51 million, the services surplus remained steady at £2.8 billion.
Trade Position and Investment Flows
Nigeria ranked as the UK’s 36th largest trading partner and 27th largest export market, accounting for 0.4% of total UK trade. It was the 47th largest import partner, representing 0.2% of total imports. However, despite the growth in trade, investment flows between the two countries weakened. The stock of UK foreign direct investment in Nigeria fell by 24.7% to £385 million at the end of 2023, while Nigeria’s investment in the UK declined by 41.2% to £489 million during the same period.
Market Share and Regional Trade Concentration
London and the South East of England accounted for the largest share of the UK’s goods exports to Nigeria in 2024, highlighting the concentration of trade activity in those regions. The UK’s overall market share in Nigeria rose to 11% in 2024 from 9.7% a year earlier, driven largely by stronger goods exports, which increased the UK’s share of Nigeria’s total goods imports to 5.2%.
Policy Impact and Industry Reactions
Recent policy changes in Nigeria have introduced a 15% import levy on petrol and diesel, aimed at protecting the country’s growing local refining capacity. This move is expected to reduce the import of refined oil in the coming months. The new levy, applied on Cost, Insurance and Freight values, is anticipated to raise the landed cost of imported refined products by about N99.72 per litre, making foreign fuel imports less competitive.
Industry experts and petroleum marketers have raised concerns about the timing and potential impact of the 15% import tariff. Analysts suggest that the policy could redirect market demand towards domestic suppliers like the Dangote Petroleum Refinery and other modular refineries. While some argue that the levy might initially push up pump prices, it is likely to stabilize supply and strengthen Nigeria’s refining sector in the medium term. Others view it as a double-edged policy that could boost government revenue but also exacerbate economic hardship for Nigerians.