January 24, 2024/FBNQuest Research

The CBN’s recently published quarterly economic report shows that the provisional value of Nigeria’s total merchandise trade decreased by -5% q/q to USD24.2bn in Q3 ’23. Underscoring the lower m/m trade value was a reduction of -17% q/q in the value of merchandise imports to USD10.5bn. In contrast, export trade increased by +7% q/q to USD13.7bn. Consequently, the trade position resulted in a higher trade surplus of USD3.2bn, compared with USD0.2bn the previous quarter.

Driving the higher m/m exports trade was an increase of 14% m/m in crude oil exports to USD12.6bn.  

The rise in crude oil exports can be attributed to higher production of crude oil and Bonny light prices.  

According to the report, Nigeria’s average crude oil production increased to 1.20 million barrels per day (mbpd) from 1.14mbpd in Q2 ’23. Similarly, crude oil prices rose 12% m/m to USD89.9/barrel during the quarter.

A major factor responsible for the higher crude oil prices was Saudi Arabia and Russia’s decision to extend their voluntary oil production cuts through to the end of 2023.

Conversely, non-oil exports, which accounted for c.8% of the country’s total exports, decreased markedly by -37% q/q to USD1.1bn, primarily due to lower electricity receipts and other non-oil products.

Regarding import trade, the lower m/m trade value of the country’s trade reflects decreases in both imported oil and non-oil products.  

While non-oil imports fell by -13% q/q to USD7.0bn, the decline of petroleum imports was more significant by -23% q/q to USD3.5bn.    

Cumulatively, the total value of Nigeria’s merchandise trade stood at USD49.7bn over the 9M ’23 period, comprising exports of USD25.5bn and imports of USD23.2bn, implying a trade surplus of USD3.3bn.

Looking ahead, we expect Nigeria’s external position to remain in surplus driven by lower imports due mainly to challenges with fx liquidity.