Nigeria’s trade balance remained in a surplus but moderated 4.8% to N831.6 billion in the first quarter of fiscal year 2019 as imports expanded faster than exports.
Overall, the nation’s weak export pulls trade surplus back in the period. The data shows that imports continued to accelerate, recorded a 25.8% increase year on year and 3.4% upsurge for quarter on quarter basis.
The increase was mainly driven by an expansion in the importation of capital goods and industrial supplies as there was a surprising contraction in fuels and lubricants import.
Afrinvest noted that imports growth moderated in the first quarter, compared to the average of 69.5% in the previous quarters which was partly due to import of a large-sized one-off capital equipment.
“Although we expect sustained growth in imports driven by industrial and household demand, we expect the pace to moderate in subsequent quarters”, Afrinvest stated.
Analysis of the trade data shows that the nation’s exports contracted by 3.9% year on year to N4.5 trillion in the first quarter of 2019. This was due to a 5.7% year on year moderation in crude oil exports to N3.4 trillion.
“We attribute this to a reduction in oil production which contracted 1.0% year on year to an estimated 1.96 million barrels per day (mb/d) in the first quarter of 2019 and oil price which was 5.8% lower at US$63.3/barrel per liter. However, exports rose 1.8% quarter on quarter, supported by improved oil production even as oil prices moderated”, the analysts remarked.
Notably, the Nigerian Bureau of Statistics, NBS, revised downwards the crude oil exports data for fourth quarter of the year 2018 to N3.6 trillion from N4.2 trillion, and in turn total trade data to N18.5 trillion in the fourth quarter of 2018 from N19.1 trillion.
For non-oil exports, there was a moderate 4.6% increase year on year to N604.4 billion, although this was faster at 159.9% on a quarter on quarter basis.
“We expect exports growth to remain weak in subsequent quarters mainly due to weak oil prices”, Afrinvest stated.
