Analysis Trade Nigeria-UAE trade tipped to recover as Emirates restarts flights By Neil Halligan October 30, 2024, 5:36 PM Akintunde Akinleye/Reuters A construction worker walks through the Dangote Oil Refinery, southeast of Nigeria's capital. The refinery began processing in January 2024 Flag carrier resumes daily flights Non-oil trade $2.4bn in 2022 Inflation at 32.7% in Nigeria Nigeria’s trade with the UAE is expected to rise significantly following the resumption of Emirates flights to Lagos this month. The daily return flights from Dubai offer more than 300 tonnes of “bellyhold” capacity – cargo carried in the hold on passenger flights – every week. Emirates suspended the flights nearly two years ago after having difficulties repatriating ticket sales revenue from Nigeria. A resurgence in trade will be welcome in the West African country, where inflation has accelerated to 32.7 percent, spurred by higher food and energy costs. The cost-of-living concerns have been exacerbated by the government’s decisions to halt petrol and electricity subsidies and to devalue the naira twice since President Bola Tinubu took office in May last year. IRH of Abu Dhabi to invest in South Africa Opinion: UAE believes trade with Africa is worth the risk UAE pledges $30m for Ghana’s biodiversity push The opening of the $20 billion Dangote Petroleum Refinery in Lekki, southeast of Lagos, is tipped to lead to a big increase in fuel supply – and a possible drop in prices. The refinery, which opened in 2023 and began processing in January this year, said on Wednesday that it has a stockpile of 500 million litres of petrol and is capable of meeting Nigeria’s demand, according to Reuters. However, local fuel traders have increased imports in recent weeks. UAE government figures say non-oil trade reached approximately $2.4 billion in 2022, with Nigeria exporting about $520 million the same year. The main products exported to the UAE include gold, spices and wood coal, according to the UAE’s Ministry of Foreign Affairs. Refined oil and automobiles dominate exports to Nigeria. Trade in goods has trended downward over the past few years, Yemi Kale, group chief economist and managing director for research and trade intelligence at the African Export-Import Bank (Afreximbank), told AGBI. Before the pandemic blocked global supply chains, the annual trade in goods was about $3.8 billion. This had fallen to less than $1 billion by 2023. The decision to suspend flights “coupled with these existing economic challenges faced by both countries since 2019” has also noticeably impacted trade between the two countries, Kale said. However, there is a lack of data available on the services trade between the countries. Kale said the decline of travel services exports, which include flight services for non-residents, suggests a drop in the services trade. After peaking at $350 million in Q3 2022 thanks to a recovery from the pandemic, Nigeria’s travel services exports to the UAE have been consistently declining. They stood at $122 million in Q4 2023. "The decline was further exacerbated by currency devaluation and the suspension of flights, which not only impacted tourism but also hindered business travel and investor engagements,” Kale said. "Imports in travel services have similarly fluctuated, reflecting the instability that characterised the period when travel restrictions were in place." Travel restrictions imposed on several African countries, including Nigeria, have reduced the number of African tourists visiting the UAE. They have fallen from from just over 6 percent of all visitor arrivals in Dubai between 2015 and 2021 to 4 percent in 2023. “The ratio of African visitors to the UAE is expected to improve over the near term as the travel restrictions are lifted. This is set to help improve the level of travel services between the country and other African countries, including Nigeria,” Kale said. UAE-Nigeria trade The UAE government started issuing visas for Nigerians in July after a break of nearly two years. Dubai’s Emirates suspended flights in 2022 because of delayed repatriation of funds from ticket sales. The governments of the UAE and Nigeria reached an agreement to resume travel at the beginning of October 2024. Aliko Dangote, Africa’s wealthiest man with a net worth of $27.8 billion, announced plans in September to establish a family office in Dubai. The Nigerian billionaire recently opened the $20 billion Dangote Petroleum Refinery. Abu Dhabi NMDC Energy is looking at offshore and onshore projects in Libya, as well as seeking work in Nigeria and Angola, its CEO said in September. The Emirati company is looking for merger and acquisition targets after delivering the UAE’s biggest initial public offering of 2024. Nigeria’s United Bank for Africa set up operations in the Dubai International Financial Centre in 2022.