- Nigeria’s Balance of Trade Projected to Hit $3.8bn Next Year
Nigeria’s balance of trade is expected to improve from -$0.5 billion to $3.8 billion before the end of next year, the Chief Executive Officer of the Financial Derivatives Company Limited, Mr. Bismarck Rewane, has said.
The balance of trade is the difference between a country’s imports and its exports for a given time period.
Rewane made the forecast in a presentation he delivered at a foreign exchange sensitisation seminar titled: “The Nigerian Foreign Exchange Market- Paving the Way towards Restoring Confidence: A Market Perspective,” that was organised by Access Bank Plc in Lagos on Wednesday.
He however disclosed that Nigeria’s terms of trade in 2017 is now 15.9 as against 18.9 in 2015.
“The oil companies are still compelled to sell their FX to the CBN. The current naira appreciation is as a result of four factors – mainly a sharp increase in our oil revenue estimated at a monthly value of $2.5 billion; a policy shift towards a discriminating crawling peg effectively depreciating invisibles from N305/$ to N360/$; a 16.9 per cent increase in the quantity supplied over first quarter 2016 to $6 billion; and the opening of a new investor/exporters window as a proxy for price discovery.”
He noted that with oil price averaging $52 per barrel and production at 1.8mbpd, revenue would be enough to meet trade finance obligations. According to Rewane, Nigeria will struggle to meet capital and infrastructure funding obligations.
Earlier, the Chief Executive Officer, Access Bank Plc, Mr. Herbert Wigwe, said that recent developments in the foreign exchange market and the attendant impact on the market and businesses at large, necessitated the forum.
“I will like to thank the Governor of the Central Bank, Mr Godwin Emefiele, and his team for the bold and laudable policy directives given in recent times to jump start the Nigerian Economy and reactivate liquidity in the FX market. This not only provides hope for businesses all around Nigeria hereunto incapacitated by the constrained liquidity of the FX market; but also shows clearly the roadmap to bringing the country back as an investment hub of the financial world.
“As a bank, our commitment to the development of the Nigerian financial market is unflinching and deeply rooted in our desire to see a liquid, structured, sustainable and well developed market that is global in its reach and conducive for businesses both great and small,” he added.