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Nigeria’s import, export transactions hit N12.7tr in Q2

The value of Nigeria’s total trade in the second quarter of 2023 (imports and exports combined) stood at at N12.7 trillion, data from National Bureau of Statistics (NBS) showed.

For the third consecutive quarter, Nigeria recorded a positive trade balance amounting to N1.3 trillion, aided by the faster growth in export earnings (up 8.1 per cent quarter-on-quarter (q/q) to N7 trillion) as against import expense (up three per cent q/q to N5.7 trillion).

The improvement in export earnings was mainly spurred by crude oil receipts which rose 8.5 per cent q/q to N5.6 trillion (about 79.6 per cent of total exports), though production level was unimpressive as per NBS data (down 19.2 per cent q/q to 1.22mbpd).

Afrinvest analysts said  the improvement in oil receipt was also impacted by exchange rate revaluation gain given that the Central Bank of Nigeria (CBN) switched from a hard-pegged exchange rate regime to a managed float in June 2023, causing the official conversion rate of oil proceeds to rise from N461.00/$ to over N650.00/$. Hence, nullifying both the effect of lower crude oil production and price in second quarter (1.22mbpd and $78.13/bbl.) relative to first quarter (1.51mbpd and $81.11/bbl.).

The analysts said official, and parallel market rates at N775.31/$ and N1007.00/$, crude oil output (August average: 1.18 mbpd), Forex reserves ($33.3 billion), and foreign capital inflows ($1.1 billion) – are all at their lowest ebbs in a decade.

Similarly, non-crude oil and non-oil exports also grew 6.8 per cent and 5.6 per cent q/q to N1.4 trillion and N688.7 billion respectively.

It is important to highlight that Agricultural goods remain Nigeria’s largest source of non-oil export earnings (four per cent of export share), while manufacturing, raw material goods, and solid mineral goods trailed with three per cent, 2.1 per cent, and 0.5 per cent, share respectively.

Cashew nuts (shelled and unshelled), sesame seeds, and cocoa beans combined accounted for 65.7% of the total N278.4 billion Agric exports in the period – an indication of potential investment opportunity in these cash crops amid high global demand.

“Given the sustained positive momentum in trade performance since fourth quarter 2022 and the expected gains from the gradual pick-up in economic activities post-first quarter disruptions, we anticipate a sustained positive net-trade position in third quarter , 2023 . Nevertheless, rampant cases of crude oil theft, oil price volatility, weak infrastructure, and other structural challenges are potential downside risk factors to our expectations,” the analysts said.
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