Surge in Trade Surplus in Q3 2019 to N1.3trn


Friday, December 27, 2019 / 09:55 AM / by FBNQuest Research / Header Image Credit: Wall Street Journal

The latest data from the NBS in its report on foreign trade in goods for Q3 2019 show the total value of trade as N9.1trn, representing an increase of 7% on the preceding quarter. Compared with Q2, the total export value rose by 15% q/q to N5.23trn, and the import value decreased by 3% q/q to N3.9trn. The net result is a surplus of N1.3trn; this is 125% higher than the figure recorded in the previous quarter. The data were drawn primarily from the Nigeria Customs Service.


From the bureau's commentary we note that the decline in import values was primarily due to q/q decreases recorded in the importation of agricultural products, raw materials and solid minerals. Meanwhile, machinery and transport equipment accounted for 47% of total imports in Q3.


As for exports, crude oil accounted for the largest share in Q3, representing 71% of the total. That said, the value of crude oil exports declined by -5% q/q and -10% y/y. Data released by same source show that average daily oil production hit 2.04 million barrels per day (mbpd) in Q3. Its highest in over three years. The decreases recorded in export value could be linked to softer demand or prices.


In the quarter under review, Nigeria exported goods valued at N1.1trn to ECOWAS members. This represented 78% of total exports within Africa. According to the Bureau, the value of exports to ECOWAS was notably high in Q3 due to exports of cable sheaths of iron and submersible drilling platforms exported to Ghana.


Merchandise trade values (N' trn)

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Sources: National Bureau of Statistics (NBS); FBNQuest Research


The African Continental Free Trade Area (AfCFTA) agreement remains topical.  The agreement has been signed by Nigeria. We understand that conversations around ratification for Nigeria are currently underway. However, the National Assembly maintains that it is yet to receive specific official documents required to move this process forward.


Looking ahead, we expect an increase in import value in Q4. Following the ongoing border closure which kicked off in August, our assumption is that the reduction in smuggled goods on the back of this closure will result in importation of some commodities through official channels which will be captured by the Nigeria Customs Service.

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