Thursday, February 18, 2016 09:10 AM /FBNQuest Research
The latest monthly Economic Report from the CBN puts non-oil exports provisionally at US$244m in November, indicating a decline of 25% from the preceding month and a 75% decrease on a y/y basis. The fall in receipts from the food products and minerals sectors was the major driver for the m/m decline. The largest proceeds came from industrial products, which earned US$79m.
The breakdown by sectors shows that proceeds from manufactured products, agricultural products and the industrial sub-sector grew by 13.3%, 13.5% and 38.3% on a m/m basis respectively. In contrast, the proceeds from food products and minerals decreased by 86.4% and 49.2% respectively.
Non-oil exports in November remained very low, at approximately 1% of GDP. The agriculture and manufacturing sectors, which underpinned non-oil exports in November, grew by 2.6% y/y and contracted by -1.8% in Q3 2015 respectively. The national accounts for Q4 are due for release later this month.
According to the Lagos Chamber of Commerce and Industry, difficulties with sourcing fx in the country have affected exporters, particularly for transport, logistics and the settlement of debt obligations. Furthermore, shipping companies, which play a vital role in the non-oil export process, are burdened with their own fx challenges.
Apart from fx related issues, the global economy has slowed down and demand for goods has softened. In January the IMF trimmed its forecast for world output growth in 2016, from 3.6% to 3.4%. We would not be surprised if we see a moderation of earnings from the non-oil export sector in the near to medium term.
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