December 8, 2023/FBNQuest Research

In its latest monthly economic publication, the CBN disclosed that the total value of Nigeria’s merchandise trade experienced a modest increase of 1% m/m to USD7.8bn in Aug ’23. However, the merchandise trade value was almost -20% lower y/y due to a significant decrease in import trade value. The total merchandise trade comprised of an export trade value of USD4.8bn, up 4.6% m/m (and 2% y/y). However, merchandise imports decreased by -5% m/m (and -40% y/y). Consequently, the net trade position resulted in a higher net trade surplus of USD1.8bn in Aug ’23, compared with USD1.5bn in Jul ‘23.

A breakdown of export trade shows that crude oil and gas accounted for 89% of total export trade value at almost USD4.3bn. This compares with nearly USD4.1bn in Jul ’23.

The increase was mainly due to a combination of higher crude oil production and prices during the month.

According to data from the Nigerian Upstream Petroleum Regulatory Commission, Nigeria’s average daily crude oil output (Inc. condensates) increased by 0.12 million barrels/ day (mb/d) m/m to 1.4 mb/d in Aug ’23.

The price of Nigeria’s benchmark crude blend, the Bonny light, was up by 9% m/m to USD89.3/barrel during the month.

Non-oil exports, which accounted for c.11% of merchandise export proceeds, increased by 3% m/m to USD0.5bn.

The top three non-oil export commodities were urea (for nitrogenous fertilizer), cocoa beans, and hibiscus flower, which contributed 15.7%, 11.2%, and 6.8%, respectively, to non-oil export earnings.

In terms of import trade, the 5% m/m reduction in merchandise imports was mainly driven by a m/m decrease in the value of imported petroleum products to USD0.9bn from USD1.2bn in Jul ’23.

Conversely, non-oil imports increased to USD1.9bn in Aug ’23 from USD1.8bn in the previous month.

Cumulatively, the total value of Nigeria’s merchandise export and import trade fell by c.-14% y/y and -37% y/y to USD39bn and USD30bn respectively, implying a net trade surplus of USD9.3bn for the period.