Economy | Nigeria Economy

MoM Rise in the Trade Surplus for May 2022; Increased by 4% to USD10.9bn

Sep 19, 2022   •   by   •   Source: FBNQuest   •   eye-icon 118 views

The most recent monthly economic report published by the CBN shows that the total value of Nigeria’s merchandise trade increased by c.4% m/m and almost 40% y/y to USD10.9bn. The total value of goods exported amounted to USD5.9bn, up 5% from the previous month, while the value of imports rose to USD5.0bn, up 2% m/m. Notably, the value of goods exported and imported rose significantly from the same period last year, by roughly 47% and 32% y/y, respectively. The external trade position resulted in a 26% m/m increase in the trade surplus to USD0.8bn.


A breakdown of merchandise export showed that crude oil (ex-gas), Nigeria’s main export, accounted for c.77% of the total value of export trade at USD4.5bn, representing a m/m increase of c.5%.


The higher value of crude oil exports was primarily driven by a c10% m/m rise in the average price of Nigeria’s benchmark crude blend during the month. The gains from pricing were partially offset by a reduction in the average crude oil output to c.1.28 million barrels/day (mbpd) from 1.35mbpd the previous month.


Non-oil exports increased by c.6% m/m to USD0.75bn. Despite the rise, non-oil exports accounted for only 13% of Nigeria’s merchandise trade. Although the CBN and other agencies have rolled out various initiatives to promote non-oil export growth, their efforts continue to be hampered by well-known structural factors.


The low-single-digit increase in import value m/m was driven by a 52% m/m rise in oil-related imports (mainly refined petroleum products) to almost USD1.5bn due to the m/m rise in crude oil prices in May. However, the rise in oil imports was almost entirely offset by a -10% decline in non-oil exports to c.USD3.6bn.


We expect Nigeria’s merchandise trade balance to swing to monthly trade deficits sometime in Q3 due to a combination of declining crude oil prices which are down c.-36% from their peak this year, and  decreasing crude oil output which was recently put at 1.1mbpd in August from c.1.2mbpd in July according to secondary OPEC sources.


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