December 13, 2022/CSL Research

Based on data released by the National Bureau of Statistics, Nigeria’s foreign trade position in Q3 2022 was a surplus for the third consecutive quarter as exports (N5.9tn) exceeded the value of the country’s imports (N5.7tn) in the period resulting in a surplus position of N269.3bn. Year-on-year, total exports (N5.9trn) grew 15.52% higher in Q3 2022 compared with N5.1trn reported in Q3 2021 while total imports (5.7trn) was 6.16% higher in Q3 2022 compared with N5.3trn recorded in Q3 2021.

Overall, the total trade value in Q3 2022 was N11.6tn, a y/y increase of 10.8% compared with N10.5tn in Q3 2021. We note that the yearon-year increases in trade values were influenced by both the 2.80% official devaluation from N410.28/US$ in Q3 2021 to N422.09/US$ in Q3 2022 and high crude oil prices as Brent crude averaged US$73.73/bbl in Q3 2021 compared with US$106.71/bbl in Q3 2022. Quarteron-quarter, total exports (N5.9trn) declined by 19.89% from N7.4trn in Q2 2022, while total imports (5.7trn) increased by 4.2% from N5.4trn in Q2 2022.

In terms of percentage contribution, crude oil continued to dominate the export earnings with a total value of N4.7trn representing 78.51%, followed by ‘Natural gas, liquefied’ with a value of N757.36bn accounting for 12.76%. On the other hand, Motor Spirit and Gas Oil accounted for the highest value (25.8%) of total imports in Q3 2022. Export earnings from manufactured goods remained low at N131.46bn in Q3 constituting only 2.2% of total
export earnings (N5.93trn).

The N470.08bn year-to-date value of export earnings and annualized value of N626.77bn (US$1.48bn) further underscores our concerns that the recent “Race to US$200bn in FX Repatriation (RT200 FX)” Programme introduced by the Central Bank of Nigeria may not be reaching forecasted targets.

This is particularly so as the policy is targeted at manufacturers of finished and semi-finished goods. The CBN recently noted it has paid a total of N81 bn in incentives for US $1.97bn inflows via the policy.

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