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Breaking the Surplus Streak

Recently, the National Bureau of Statistics (NBS) published the Foreign Trade in Goods statistics report for Q4:2023. On a Quarter-on-Quarter (QoQ) basis, Total Imports (+56.04% to NGN14.11trn in Q4:2023 vs. NGN9.04trn in Q3:2023) and Total Exports (+22.68% to NGN12.69trn in Q4:2023 vs. NGN10.35trn in Q3:2023) recorded significant increases. Consequently, we observed a 38.24% QoQ surge in Total Trade to NGN26.80trn in Q4:2023 from NGN19.39trn in Q3:2023. Notably, after four (4) consecutive quarters of staying in the surplus zone, the Balance of trade slipped into a NGN1.41trn deficit in Q4:2023 (vs. a NGN1.31trn surplus in Q3:2023).

In 2023FY, Total Trade grew by 37.21% year-on-year (YoY) to NGN71.88trn (vs. NGN52.39trn in 2022FY). The growth in total trade follows an upswing in both Total Imports and Total Exports by 40.36% YoY and 34.20% YoY each to NGN35.92trn and NGN25.59trn, respectively. Overall, Nigeria’s Balance of Trade rested at a surplus of NGN2.90bn in 2023FY, compared to the NGN1.21trn trade surplus recorded in 2022FY.

In Q1:2024, we expect the Balance of Trade to be buoyed by oil exports given the government’s efforts to improve oil production and mitigate oil theft and pipeline vandalism. Furthermore, the commencement of operation in Dangote Refinery is poised to improve crude oil production and by extension, oil exports. In addition, we believe that the continued depreciation of the Naira in Q1:2024 would increase the value of non-oil export.

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