The Central Bank of Nigeria (CBN) recently released a brief on Nigeria’s Balance of Payment (BOP) account for Q1-18. The reading showed a significant improvement in the country’s position as the overall balance of payments saw a surplus to the tune of US$7.3bn compared to a surplus of US$6.2bn in the preceding quarter.
Within the BOP, the current account balance improved significantly from a surplus of US$3.7bn in Q4-17 to a surplus of US$4.5bn in Q1-18, which was largely attributable to increased export earnings and a net surplus in current transfers. The financial account balance also indicated a net acquisition of financial assets of a whopping US$10.3bn in the review period as against US$3.9bn recorded in the preceding period, on the backdrop of marked accretion in the stock of external reserves, as well as portfolio investments inflows of US$5.1bn in Q1-18 from US$3.8bn in Q4-17 and US$438.5mn in Q1-17.
Commenting on the BOP numbers, we note that the source of improvements remains rather oily with vulnerabilities to both internal and external shocks. Nevertheless, an aggressive growth in non-oil exports should bear some light for Nigeria as the economy pushes towards diversifying its export base away from oil.