Friday, December 27, 2019 / 09:55 AM / byFBNQuest Research / Header Image Credit: Wall Street Journal

Thelatest data from the NBS in its report on foreign trade in goods for Q3 2019show the total value of trade as N9.1trn, representing an increase of 7% on thepreceding quarter. Compared with Q2, the total export value rose by 15% q/q toN5.23trn, and the import value decreased by 3% q/q to N3.9trn. The net resultis a surplus of N1.3trn; this is 125% higher than the figure recorded in theprevious quarter. The data were drawn primarily from the Nigeria CustomsService.

From the bureau's commentary we note that the decline in import valueswas primarily due to q/q decreases recorded in the importation of agriculturalproducts, raw materials and solid minerals. Meanwhile, machinery and transportequipment accounted for 47% of total imports in Q3.

As for exports, crude oil accounted for the largest share in Q3,representing 71% of the total. That said, the value of crude oil exportsdeclined by -5% q/q and -10% y/y. Data released by same source show thataverage daily oil production hit 2.04 million barrels per day (mbpd) in Q3. Itshighest in over three years. The decreases recorded in export value could belinked to softer demand or prices.

In the quarter under review, Nigeria exported goods valued at N1.1trn toECOWAS members. This represented 78% of total exports within Africa. Accordingto the Bureau, the value of exports to ECOWAS was notably high in Q3 due toexports of cable sheaths of iron and submersible drilling platforms exported toGhana.

The African Continental Free Trade Area (AfCFTA) agreement remainstopical.  The agreement has been signed by Nigeria. We understand thatconversations around ratification for Nigeria are currently underway. However,the National Assembly maintains that it is yet to receive specific officialdocuments required to move this process forward.

Looking ahead, we expect an increase in import value in Q4. Followingthe ongoing border closure which kicked off in August, our assumption is thatthe reduction in smuggled goods on the back of this closure will result inimportation of some commodities through official channels which will becaptured by the Nigeria Customs Service.

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