January 6, 2025/CSL Research
Provisional data from the Central Bank of Nigeria for October 2024 highlights a positive trade performance, driven by stronger growth in export earnings compared to imports. The trade surplus expanded to US$2.21 billion, up from US$2.07 billion in September. This improvement was fueled by a 3.51% rise in total exports, which increased to US$5.02 billion from US$4.85 billion the previous month. The growth in exports was attributed to higher values in both crude oil and non-oil products. Meanwhile, imports saw a slight increase of 1.08%, reaching US$2.81 billion compared to US$2.78 billion in September driven by both oil and non-oil imports. Non-oil imports rose to US$2.18 billion, while petroleum product imports increased by 0.90%.
Crude oil and gas exports continued to dominate Nigeria’s export landscape, accounting for a significant 87.74% of total exports. The sector saw remarkable growth, with total receipts rising to US$4.40 billion in October, up from US$3.77 billion in September. This increase was driven by higher crude oil prices, with Bonny Light crude reaching US$76.69 per barrel, and an uptick in domestic crude oil production excluding condenate to 1.32 million barrels per day.
The production boost was attributed to enhanced pipeline surveillance and concerted efforts to combat crude oil theft. Gas exports also played a vital role in the sector’s performance, contributing US$0.64 billion, fueled by rising demand for liquefied natural gas (LNG) in rapidly expanding Asian markets. Non-oil exports recorded impressive growth as well, increasing by 19.23% to US$0.62 billion from US$0.52 billion in September. This growth was primarily driven by higher export receipts for key agricultural commodities such as cocoa beans, urea, sesame seeds, cocoa products, aluminum, and copper. Brazil emerged as the top destination for Nigeria’s non-oil exports, followed by the Netherlands, Malaysia, Japan, and Germany.
The devaluation of Nigeria’s local currency in the official market has boosted export values, spurring export activity while making imports more expensive. This has contributed to an improved trade balance. However, crude oil remains the dominant contributor to total exports, highlighting the country’s heavy reliance on oil for foreign exchange earnings and its vulnerability to external shocks. Strategic investments in agriculture offer significant potential to enhance non-oil export contributions and strengthen economic resilience.
The current positive trade performance is a promising indicator for Nigeria’s economy. To sustain and build on this momentum, diversifying the export base is crucial. Expanding non-oil exports in high-growth sectors such as agriculture, manufacturing, and technology can reduce dependence on crude oil, fortify the economy, and ensure long-term stability.
