Nigeria’s trade surplus – the difference between imports and exports – rose to N6.52 trillion in the first quarter of 2024, as per the National Bureau of Statistics (NBS)’s most recent report on foreign trade statistics, which was published on Sunday.
According to the report, the nation’s trade balance increased by 79.1 percent from N3.64 trillion to N2.82 trillion in Q1, marking the sixth consecutive quarter of positive trade balance. Additionally, it increased from N20.9 billion in the previous year.
A nation has a trade surplus if its exports are greater than its imports.
The largest country in Africa had a 46.3 percent growth in merchandise trade in Q1 over the previous quarter and a 145.6 percent increase over the same period last year, totaling N31.8 trillion.
The NBS report stated: “With a value of N19.2 trillion, exports accounted for 60.3 percent of total trade in the reviewed quarter, showing an increase of 51 percent compared to Q4 (N12.7 trillion) and 195.5 percent over the value recorded in Q1 2023 (N6.48 trillion).”
Analysts blamed the foreign exchange reform that was put into place last June for the exchange rate depreciation that resulted in the spike in exports.
According to Israel Odubola, a research economist based in Lagos, “the increased trade surplus can be linked to the devaluation effect, with the country getting more naira from export proceeds per dollar.”
According to him, a positive trade surplus benefits the current account by easing external pressure. According to Odubola, “a trade surplus is quite significant in current account composition.”
The managing director of Afrinvest Consulting, Abiodun Keripe, also linked the decline in currency value to the increase in trade surplus.
“Due to the weaker naira, which would draw more dollar inflows through trade or other means, exports would improve significantly,” Keripe stated.
Following a 40% depreciation in June of last year, the naira had a devaluation of about 30% this year. As of June 7, 2023, the official currency rate was N1.483.9/$, up from N463.38/$ on June 9, 2023. The value of the naira dropped to N1,495/$ from 762/$ on the black market.
Nigeria’s current account balance, which indicates its net trade in goods, services, and transfers with the rest of the globe, increased to $1.21 billion last year from $1.02 billion in 2022, according to recent data from the International Monetary Fund.
According to economist Ibrahim Bakare, “a growing current account surplus can be a sign of economic strength, indicating that the country’s industries are competitive internationally and that its exports are in demand.”
Crude oil was the main export commodity in Q1 with a value of N15.4 trillion, or 80.8 percent of total exports. Non-crude oil exports made up N3.68 trillion, or 19.20 percent of total exports, with non-oil products accounting for N1.78 trillion, or 9.28 percent of total exports.
However, with the value of imports being N12.6 trillion, up 39.6% from Q4 (N9.05 trillion) and 95.5 percent from Q1 2023 (N6.47 trillion), the percentage of total imports accounted for 39.7 percent of all commerce in Q1.
China was the largest trading partner for imports in Q1, followed by the US, Belgium, The Netherlands, India, and the United States of America.
The most traded goods were motor spirit regular, gas oil, cane sugar intended for sugar refineries, durum wheat (without seeds), and other liquefied petroleum gases and gaseous hydrocarbons.
