Nigeria achieved a notable trade surplus in the first quarter of 2024, driven by a significant increase in exports.

According to the latest report from the National Bureau of Statistics (NBS), the total trade value surged by 146% year-on-year to N31.8 trillion in Q1 ’24. On a quarterly basis, the trade value rose by 46%.

The export sector experienced a substantial boost, with total exports increasing by 51% quarter-on-quarter to N19.2 trillion, compared to N12.6 trillion in Q4 ’23.

Imports also saw an increase, rising by 39.6% quarter-on-quarter to N12.6 trillion from N9.1 trillion in the previous quarter. This resulted in a trade surplus of N6.5 trillion in Q1 ’24, a significant increase from the N3.6 trillion recorded in Q4 ’23.

Also, the total trade as a percentage of nominal GDP stood at 54% in Q1 ’24, up from 33% in Q4 ’23.

China was Nigeria’s largest import partner, accounting for N2.9 trillion (23.2% of total imports). Other key import partners included India (N1.1 trillion), the USA (N1.0 trillion), Belgium (N955.9 billion), and the Netherlands (N591.5 billion).

Collectively, these countries represented 52% of Nigeria’s total imports in Q1 ’24. Imports from ECOWAS countries totaled N113 billion, making up 28% of total African imports.

Manufacturing goods led the import categories, representing 45.4% of total imports. Other significant import sectors included oil products (35.2%), raw materials (11.6%), and agriculture (7.3%).

The solid minerals sector, though accounting for just 0.5% of imports, saw a notable year-on-year growth of 59.2%, reaching N71.4 billion in Q1 ’24.

France emerged as Nigeria’s top export destination in Q1 ’24, with exports valued at N2.1 trillion (11.1% of total exports).

Other leading export partners included Spain (N2 trillion), the Netherlands (N1.7 trillion), India (N1.6 trillion), and the United States (N1.3 trillion). Together, these countries accounted for 45.7% of Nigeria’s total exports in the quarter.

Crude oil remained Nigeria’s dominant export, comprising 81% of total exports. The value of crude oil exports grew by 50% quarter-on-quarter to N15.4 trillion, up from N10.3 trillion in Q4 ’23.

According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), average crude oil production, including condensates, was 1.54 million barrels per day (mbpd) in Q1 ’24, a slight increase from 1.53 mbpd in Q4 ’23.

Non-oil exports also performed strongly, rising by 54% year-on-year to N3.6 trillion and accounting for 19.2% of total exports.

Key agricultural export commodities included sesamum seeds, superior quality cocoa beans, soybeans, and cashew nuts.

Nigeria’s exports to ECOWAS countries were valued at N1.2 trillion in Q1 ’24, up from N686.7 billion in Q4 ’23, representing 56% of total African exports.

The Apapa Port was the primary hub for exports, with goods worth N18.1 trillion passing through, accounting for 94.3% of total exports. Other significant ports included Tin Can Island (N708.8 billion) and Port Harcourt (N270.9 billion).

The strong trade performance in Q1 ’24 highlights Nigeria’s growing export capabilities and the positive impact of strategic trade partnerships.

The substantial increase in both crude oil and non-oil exports indicates a positive trend for Nigeria’s economy.

Moving forward, a continued focus on diversifying export commodities and strengthening trade relations will be crucial to maintaining this upward trajectory.

Nigeria’s newly operational Dangote oil refinery is making waves in the oil industry, rapidly increasing its gasoil exports to West Africa and capturing significant market share from European refiners.

According to traders and shipping data, this $20 billion refinery is already altering the landscape of oil exports in the region.

Despite currently producing a lower grade of gasoil than anticipated, due to pending restarts of key units needed for cleaner fuel production, the refinery has been actively seeking buyers in neighboring markets.

In May, Dangote’s gasoil exports soared to nearly 100,000 barrels per day (bpd), almost doubling the levels recorded in April, as per data from analytics firm Kpler.

The majority of these exports were directed to West African countries, with one shipment reaching Spain.

However, preliminary data for June shows a significant decline in gasoil volumes. Despite this, overall oil product exports, including fuel oil, naphtha, and jet fuel, remained robust at 225,000 bpd.

The rise of Dangote’s refinery has significantly impacted European markets. A European distillates trading source told Reuters, “The refinery has shifted the balance in West Africa.”

This shift is reflected in Kpler data, which shows that EU and UK gasoil exports to West Africa fell to a four-year low of 29,000 bpd in May.

Russian exports to the region also dropped to an eight-month low of 87,000 bpd in the same month.

In Nigeria, Dangote has been selling some high-sulphur gasoil, leading to disputes with local fuel retailers over responsibility for distributing the dirtier fuel.

The Petroleum Industry Bill passed in 2021 mandates a sulphur content of 50 parts per million (ppm) to align with sub-regional ECOWAS standards.

However, the regulator allowed the sale of gasoil with sulphur content above 200 ppm locally from the beginning of the year until June, giving local refineries and importers more time to comply with the new standard.

As European countries tighten regulations on high-sulphur gasoil exports, cargoes from the Dangote refinery have found a market in regions with more lenient motor fuel standards.

This shift is crucial as European refiners face increasing constraints, while West African countries continue to demand more fuel.

Earlier in May, Aliko Dangote, the Chairman of the Dangote refinery, stated that once fully operational, the refinery would supply products to West and Central African countries due to its capacity being too large for Nigeria alone.

This expansion underscores the refinery’s potential to reduce the $17 billion in oil imports into the continent and could even lead to the closure of some European refineries.

The refinery’s impact is evident with West Africa becoming the largest regional recipient of Europe’s gasoline exports in 2023, receiving roughly one-third of the continent’s average exports, which totaled 1.33 million barrels per day (bpd).

The Dangote refinery’s rapid ascent and substantial increase in gasoil exports mark a significant shift in the oil export dynamics of West Africa, promising to reshape the region’s energy landscape for years to come.

Guinness Nigeria Plc, one of the leading brewery companies in the country, has reported a financial downturn in its latest unaudited report for the nine months ending March 2024.

The company recorded a loss before tax of N60.45 billion, its first loss in five years while in the same period last year, the company reported N9.94 billion in profit.

The loss is attributed to a combination of increased operational expenses and significant foreign exchange (FX) pressures. Operating expenses surged by 9% from N44.43 billion to N48.50 billion.

This rise in costs, coupled with an 89% increase in FX loss to N83 billion, largely driven by a $22.5 million loan from its parent company and the float in exchange rate in 2023, severely impacted the company’s bottom line.

Despite these challenges, Guinness Nigeria’s revenue saw a notable increase of 27%, climbing to N220.30 billion from N172.47 billion the previous year.

This revenue growth was primarily due to increased local sales, indicating a strong market presence despite the financial hurdles.

Analysts at CardinalStone noted that the elevated cost pressures are expected to persist in the coming quarters, driven by rising inflation affecting locally sourced raw materials and foreign exchange volatility impacting imported products.

They anticipate a flattish EBIT margin of 10.1% for the full year 2023/2024, influenced by high energy prices and increased marketing expenses due to intense industry competition.

The challenging economic environment has led to a significant increase in the prices of many commodities.

Nigeria’s headline inflation hit a 28-year high of 33.95% in May, reflecting the declining purchasing power of consumers.

Despite the current financial setback, there is optimism about the future. Analysts expect a recovery in EBIT margin to 10.2% in the 2024/2025 fiscal year, supported by the localization of raw materials, improved export earnings, and reduced foreign currency exposure.

The recent acquisition of a majority stake by Tolaram, coupled with long-term licensing agreements, is anticipated to provide synergistic benefits and strong revenue growth.