Nigeria Economy | |
Nigeria Economy | |
1577 VIEWS | |
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Monday, July 27, 2020 / 10:06AM
/ PFI Capital/Header Image Credit: Import Export Data
Nigeria's
total merchandise trade stood at N8.30 trillion in Q1'20 (equivalent to c.23%
of nominal GDP during the same period) with total import printing at c.51% of
total trade while total export represent c.49% of total trade. We note a trade
deficit of N138.98 billion recorded during the period (N579.06 billion trade deficits
in Q4'19).
This
represents two consecutive quarters of import greater than export and we
highlight that while the trade deficit in Q4'19 is as a result of faster
increase in imports (relative to export which declined QoQ), that of Q1'20
majorly stemmed from tepid economic activities caused by the global pandemic
(total import and total export declined during the period). There was a trade
deficit of N174.30 billion and N162.25 billion in January and March
respectively while a trade surplus of N197.56 billion was recorded in February
with import printing at N1.23 trillion during the month while total export
value was N1.43 trillion.
Source: NBS, PFI Capital Research
Crude
oil which is Nigeria's dominant export product, constitute 72% of the total
export accounting for N2.94 trillion of the total export value of N4.08
trillion. When we add the value of other oil exports, we note that oil products
constitute c.85% of Nigeria's total exports in Q1'20 while the share of
agriculture to total exports printed at 3% (Q1'19: 1.90%) and the share of
manufacturing to total exports was 10.89% (Q1'19: 10.19%) during the same
period.
Manufactured
goods are the dominant import products and the importation of the goods
represents 63% of total imports during the period while the importation of
other oil products accounted for c.23% of total imports and the share of
agricultural goods to total imports printed at 6%. Energy goods and crude oil
are the only commodities Nigeria exported more than import during the period.
N4.99 billion worth of energy goods was exported in Q1'20 compared to N2.71
million worth of energy goods imported during the period. Also, the country did
not import crude oil during the period but exported N2.94 trillion worth of
crude oil in the same period.
Source: NBS, PFI Capital Research
Majority
of Nigeria's total exports in Q1'20 found their way to Asia and Europe with
goods worth N1.28 trillion exported to Asia and exports valued at N1.57
trillion found their way to Europe. India, Spain and Netherlands were the top 3
major export trading partners of the country during the period as they
accounted to 15.61%, 9.87% and 9.72% of Nigeria's total export trade
respectively. For imports, 26.28% of Nigeria's total import came from China,
while 11.14% and 10.45% of total imports came from Netherlands and the US
during the same period.
We
further highlight that majority of Nigeria's export to African countries was in
the form of manufactured products. We note that vessels and other floating
structures for breaking up were exported to Cameroon (N300.66 billion),
Equatorial Guinea (N57.94 billion) and Ghana (N4.86 billion) while helicopters
worth N33.23 billion were exported to Ghana during the same period under
review.
We
expect the value of both import and export to continue their downward
trajectories over the year, with exports declining faster due to the nature of
Nigeria's export commodities. Foreign trade is also expected to subdue due to
the gradual lockdown measures adopted by countries, particularly Nigeria's
trading patterns as well as the lower level of demand caused by low income. Hence,
we expect the country in FY'20 to record its first full year trade deficit
since 2016.
Previous
Report from PFI Capital Limited
1. Inflationary
Pressure Likely to Decelerate in July - PFI Capital Limited
2. Implications of
CBN's Exchange Rate Unification - PFI Capital Limited
3. A More than Expected Slowdown in
Global Growth - PFI Capital
4. Nigeria's Double-Whammy: Inflation
and Unemployment - PFI Capital
5. Performance Review of the Economic
Recovery and Growth Plan - PFI Capital
6. Implications of Nigeria's Consumption
Expenditure Pattern - PFI Capital Limited
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