Nigeria’s Trade Statistics – Oil Dependence Persists


Friday, July 06, 2018 /09:30 AM /FDC

The Central Bank recently released its Balance of Payment (BOP) report for the first quarter of 2018. The statistics showed a significant improvement in the country’s foreign trade position as both the overall and other components of the BOP statistics recorded significant improvements. According to the report2, the balance of payment surplus came in at $7.32bn, 18.47% above $6.18bn in the fourth quarter of 2017. This implies that the revenue receipts from the country’s exports surpassed import payments– this is positive for external reserves accretion and exchange rate stability. 

The current account balance which shows the net amount of a country’s income, remained in a surplus position, increasing from $3.66bn in Q4’17 to $4,47bn in Q1’18. This was due to an increase in the country’s export earnings as well as the net surplus in its current transfers. Export earnings grew by 10.2% to $14.39bn in the period under review, supported by an increase in both oil and non-oil revenue. In addition, the net Current transfers advanced by 9.9% to $6.43bn com-pared to Q4’17. 

During the quarter, the earnings from crude oil and gas increased 10.2% to $13.43bn, owing to the spike in oil prices. The average oil price in Q1’18 was $67.23pb, 9.58% higher than the average of $61.35pb in Q4’17. During the period, oil prices reached a peak of $70pb supported by the high compliance level (152%) to the OPEC output cut deal and supply disruptions in Venezuela, Libya and Angola. 

The success of the OPEC-Russia alliance led to a depletion in global oil inventories, and this bolstered oil prices. Exports are still dominated by oil (93.3% of total); so negative shocks to global oil prices or disruptions to domestic production would lead to major deterioration in the trade balance.

The earnings from non-oil and electricity exports increased by 12.3% to $0.97bn. Also noteworthy is the fact that the payment for imports of goods grew by 13.9% to $8.64bn, owing to the 99.5% increase in the import of petroleum products. The spike in importation of petroleum products was in response to the domestic fuel scarcity that was witnessed in late Q4’17 and early Q1’18. Mean-while, the surplus in the goods account in-creased to $5.75bn from $5.47bn in the preceding quarter.


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The net out-payments for ser-vices declined by 5.1% to a deficit of $4.45bn compared to a deficit of $4.69bn in Q4’17. However, this is a 201.2% in-crease when compared to the deficit of $1.48bn in Q1’17. Net income account deficit also soared to $3.27bn from $2.98bn in Q4’17. The capital and financial account balance indicated a net acquisition of financial assets of $10.29bn from $3.86bn. While assets re-corded a negative of $22.88bn from $8.63bn in Q4’17, liabilities increased to $12.59bn from $4.77bn. 

Direct investment inflow dipped by 15.7% to $0.81bn from $0.96bn in Q4’17, partly due to the economic and political uncertainties induced by the delay in the MPC meeting. Surprisingly, portfolio investment advanced by 35.77% to $5.14bn from $3.79bn. Other investment liabilities increased to $6.64bn compared to $0.24bn in the preceding quarter.


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