Nigeria’s Trade Surplus Rises To N1.88trn In Q3

Nigeria’s trade surplus recorded an improvement to N1.88 trillion in the third quarter (Q3), 2023.

This was contained in the recently published Foreign Trade Statistics report by the National Bureau of Statistics (NBS).

Nigeria’s total merchandise trade value went up to N18.80 trillion in the third quarter of 2023.

This indicates an increase of 54.6 per cent quarter on quarter from the N12.16 trillion recorded in the prior quarter and a 53.16 per cent year-on-year (Y-o-Y) increase from the N12.28 trillion reached during the corresponding quarter of 2022.

Within a nine months period, Nigeria’s total merchandise trade value stood at N43.01 trillion as total exports continue to outperform the total import value at N23.27 trillion and N19.74 trillion to give a net trade balance of N3.52 trillion for the first time since 2018.

In the face of the surge in total merchandise trade during the period, trade surplus for the period recorded an improvement to N1.88 trillion for the first time since the second quarter of 2018 when Nigeria’s trade surplus hit N2.08 trillion. This comes as export earnings outweigh the surging import bills to maintain the uptrend in the total trade balance for the fourth consecutive quarters since Q3,2022 after the N409.4 billion recorded in trade deficit at that time.

This strong position in trade earnings for Nigeria was largely driven by a considerable increase in trade activities within the period and comes as total export trade during the period was dominated by crude oil exports valued at N8.54 trillion, which accounted for 82.5 per cent of total exports while the non-crude oil exports was 1.81 trillion and then the non-oil export products contributed a 6.55 per cent (N677.6 billion) to the total exports.

On the other hand, the value of imports widened further to N8.46 trillion in the third quarter of 2023 and was primarily dominated by mineral fuels import amounting to N2.85 trillion, trailed by machinery and transport equipment with N2.32 trillion and Chemicals & related products worth N1.07 trillion.

Cowry Asset Management Limited stated that, “in our view, the Q3, 2023 trade numbers suggest a substantial upswing in trading activities, primarily propelled by a resilient export performance, notably in crude oil.

This surge is buoyed by favourable global oil prices exceeding $90 per barrel during the period, coupled with a slight increase in domestic and condensate production, reaching an average daily output of 1.45 million barrels per day.

“This production level surpasses the daily average observed in Q3, 2022 by 0.25 million barrels per day and exceeds Q2, 2023 figures. Contributing factors include a moderation in pipeline vandalism and oil theft, attributable to ongoing repairs and maintenance at crucial oil facilities, and the recent removal of fuel subsidies.”

It explained that, “the emergence of a net trade surplus in Q3, 2023 is a noteworthy deviation from previous quarters, underscoring Nigeria’s trade resilience amid global economic shifts. This positive development is intricately linked to the impact of recent currency devaluation, strategically employed to enhance the competitiveness of the country’s exports.

“The weakened domestic currency, in tandem with robust global oil prices, has positioned Nigeria favourably, potentially stimulating export volumes as a response to escalating import costs. In essence, the Q3, 2023 trade landscape reflects a convergence of factors, including resilient crude oil exports, improved global oil prices, increased production, and strategic economic measures, collectively shaping Nigeria’s adaptive response to the intricate dynamics of the global economic landscape.”