Based on a recent report from the National Bureau of Statistics (NBS), Nigeria recorded a trade surplus of N1.89trn in the third quarter of 2023, which is higher than the N1.25trn recorded in the preceding quarter. Total trade was N18.8tn, an increase of 54.66% and 53.16% over the N12.74tn and N12.28tn recorded in Q2 2023 and Q3 2022 respectively. Total exports grew to N10.35tn, up by 60.78% compared to the amount recorded in the second quarter of 2023 (N6.43tn) and up by 74.36% when compared to the corresponding quarter in 2022 (N5.93tn). Similarly, total imports amounted to N8.46tn, increasing by 47.70% compared to the value recorded in Q2 2023 (N5.73tn) and by 33.33% when compared to the value recorded in Q3 2022 (N6.34tn).
Crude oil is Nigeria’s major export product, representing 82.5% (8.54trn) of the country’s total exports in Q3 2023. This is followed by ‘Natural gas, liquefied’ at N1.02 trillion (9.82% of total export) and Urea at N109.68 billion (1.06% of total export). Spain received the highest exports from Nigeria, 12.31% of the country’s total exports. This was followed by India with N1.01tn representing 9.81% of the country’s total exports, and the Netherlands with ₦988.66 billion and 9.56% of total exports. Our top 5 import trading partners accounting for over 57.18% of the nation’s imports were China, Belgium, India, Malta, and the United States. The little contribution of non-oil products to total exports still revealed the nation’s over-reliance on crude oil for export earnings. We reiterate the need to diversify export proceeds away from oil.
The NBS noted that the significant rise in exports and imports in the third quarter of 2023 compared to the preceding and corresponding quarters was largely driven by an increase in trade activities within the period, but we believe the impact of the devaluation on crude export proceeds was a major contributor to the q/q growth in exports given that the devaluation would have only impacted June numbers in Q2. Crude oil production averaged 1.43mbpd in Q3 2023, marginally higher than an average of 1.39mbpd recorded in Q2 2023 while average crude oil price was US$89.19/bbl in Q3 compared with US$75.70/bbl in Q2 2023. We maintain our year-end projections that the current account (CA) balance will remain positive, riding on the gains from an improved export condition. We believe that the devaluation of the currency will be a disincentive for import activities as imports become more expensive.
Source CSL Research
