March 8, 2019

Increased trade surplus in Q4

The latest data from the NBS in its report on foreign trade in goods for Q4 2018 show the total value of trade as N8.61trn, representing a decrease of 5% on the preceding quarter. Also compared with Q3, the total export value rose by 2% q/q to N5.0trn, while the import value decreased by 14% q/q to N3.6trn. The net result is a surplus of N1.4trn; this is double the figure recorded in the previous quarter. The data was drawn primarily from the Nigeria Customs Service.

  • From the bureau’s commentary we note that the contraction in import value was primarily due to a reduction in the importation of agricultural products as well as manufactured goods. We note that machinery and transport equipment accounted for 40% of total imports in Q4. For the importation of specific machinery, the authorities have provided import waivers.
  • The import value for raw materials grew by 9.5% q/q to N310bn. There has been visible traction with local substitution; however, manufacturers still require imported inputs for production. According to the report, cane sugar for sugar refining and milk, as well as mixtures of odoriferous chemicals used mainly in the food and drink industry featured in the raw materials import list in Q4.
  • Similar to previous quarters, crude oil accounted for the largest share of exports in Q4, representing 84% of the total. The value of crude oil exports rose by 2% q/q and 30% y/y.
  • Merchandise trade values (N’ trn)

    Increased trade surplus in Q4

    Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research
  • The NBS report now captures preferred ports for export operations. As expected, Apapa port in Lagos accounted for 96% of total export transactions. Meanwhile, goods worth N67bn and N58bn were exported through Port Harcourt and Tin Can Island respectively.
  • In the quarter under review, Nigeria exported goods valued at N339bn to ECOWAS members. This represented 48% of total exports within Africa. The growing narrative of protectionism and trade barriers on a global level makes a good case for membership of the African Continental Free Trade Area (AfCFTA). However, Nigeria is yet to sign the agreement. There are currently 49 out of 55 possible signatures.