September 11, 2023/CSL Research
Based on a recent report from the National Bureau of Statistics (NBS), Nigeria recorded a trade surplus of N1.28trn in the second quarter (Q2) of 2023. Total merchandise trade was N12.74trn, an increase of 5.77% over the value recorded in Q1 2023 but declined by 7.60% when compared to the value recorded in Q2 2022. On trade classification, total exports stood at N7.01trn, making up 55.1% of total trade and an increase of 8.15% from N6.48trn recorded in Q1 2023. Total imports amounted to N5.74trn, up 2.99% compared to N5.6trn recorded in Q1 2023 and making up 44.9% of total trade.
Looking at the exports breakdown, of the N7.01trn total exports, crude oil export contributed 79.6% (N5.6trn) and non-crude oil export added about 20.4% (N1.4trn) of which non-oil products from agricultural goods, solid mineral, manufactured goods, and raw materials goods sectors contributed only N688bn i.e., only 9.82% of the total exports. Our top 6 export trading partners remain Netherlands, United States, Indonesia, France, Spain, and India –which accounted for over 50.83% share of the nation’s exports. Also, the top 6 import trading partners accounting for over 63.22% of the nation’s imports are China, United States, Belgium, India, Netherlands, and Malta.
In the second half of 2023, we project the current account (CA) balance will remain positive, riding the gains from an improved export condition. Specifically, we expect the devaluation of the currency at the official window to result in an increase in export value and a decrease in imports as imports become more expensive. The introduction of new tariffs on imports is also expected to discourage imports. That said, the little contribution of non-oil products to total exports still revealed the nation’s over-reliance on crude oil for her export earnings. We reiterate the need to diversify export proceeds away from oil. Agricultural products like cocoa beans, cashew and rubber are low-hanging fruits in our view, considering the mass and quality of our arable lands.
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