Nigeria Records 7th Quarterly Trade Deficit

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…As foreign trade rises 23% to N12trn

Nigeria has recorded a goods trade deficit of N1.9 trillion in the second quarter of 2021 as imports bills (N6.9tr) outweighed export earnings (N5.1tr) for the seventh consecutive quarter since Q3:2019.

According to data released by the National Bureau of Statistics (NBS), the latest deficit however represents an improvement of 52.6% compared to the Q1:2021 goods trade deficit of N3.9tr.

This came as export earnings improved by 74.7% q/q to N5.1tr, while import bills only grew by 1.5%.

Analysts at Financial Derivative Company (FDC) attributed the improved export earnings in Q2:2021 to further recovery of more activity sectors in Q2:2021 (Q1:2021 – 8) and gains in the average crude oil price to $69.1/pbl, compared to $61.3/pbl in Q1:2021.

Nigeria Records 7th Quarterly Trade Deficit

Year to date (i.e., H1:2021), Goods trade deficit stood at N5.8tn, translating to an increase of 157.9% over H1:2020 (N2.25tr). We linked this to a record high N3.9tr trade deficit recorded in Q1:2021 and the 14.2% devaluation of the naira between H1:2020 (N360.00/$1.00) and H1:2021 (N411.50/$1.00).

Crude oil share of exports earnings increased to 75.2% (N6tr) in H1:2021 from 71.0% (N4.5tr) in H1:2020.

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In terms of region of trade direction, Asia remains Nigeria’s largest import source and export destination, with 65.9% (N6.8tr) and 37.3% (N3.8tr) share respectively.

Of the five regions of trade, Nigeria booked a trade deficit with America (N573.4bn), Asia (N3.8tr), and Oceania (N72.9bn) but reported a surplus of N601.7bn and N1.5tr over Africa and Europe, respectively.