Nigeria’s Trade Surplus Drops 4.8% in Q1 2019

• Nigeria’s Trade Surplus Drops 4.8% in Q1 2019

Nigeria’s trade balance remained positive in the first quarter despite imports expanding faster than exports.

Trade surplus moderated by 4.8 per cent to N831.6 billion as imports accelerated by 3.4 percent in the quarter. Year-on-year, imports grew by 25.8 percent.

The surge in imports was attributed to the increase in importation of capital goods and industrial supplies as there was a surprising contraction in fuels and lubricants.

Analysts at Afrinvest, however, noted that imports actually reduced in the first quarter when compared with the average of 69.5 percent recorded in the previous quarters. The said the number was pushed up by one-off capital equipment.

“Exports contracted 3.9 per cent on a Year-on-Year basis to N4.5 trillion in first quarter 2019, due to a 5.7 per cent Year-on-Year moderation in crude oil exports to N3.4 trillion. We attribute this to a reduction in oil production which contracted one per cent Year-on-Year to an estimated 1.96mb/d in first quarter2019 and oil price which was 5.8 per cent lower at US$63.3/bbl,” the analysts said in emailed reports to investors.

However, exports rose 1.8 per cent Quarter-on-Quarter, supported by improved oil production even as oil prices moderated. “Notably, the NBS revised downwards the crude oil exports data for fourth quarter of 2018 to N3.6 trillion from N4.2 trillion, and in turn total trade data to N18.5 trillion in fourth quarter of 2018 from N19.1 trillion. For non-oil exports, there was a moderate 4.6 per cent increase Year-on-Year to N604.4 billion, although this was faster at 159.9 per cent on a Quarter-on-Quarter basis. We expect exports growth to remain weak in subsequent quarters mainly due to weak oil prices,” they said.