Nigeria’s favourable balance of trade looks set to vanish

The recent data released by the National Bureau of Statistics (NBS) depicting favourable balance of trade looks set to vanish on slumping oil prices.

Nigeria’s external merchandise trade stood at N6.65 trillion in the second quarter of 2014.

Relative to the N5.51 trillion recorded in the preceding quarter, the value of the nation’s total merchandise trade increased by N1.14 trillion or 20.8 percent.

At a value of N3.26 trillion, the crude oil component of exports represented 69.8 percent of total exports for the period.

By continent of destination, the greatest values of Nigerian exports were sent to

Europe, Asia, and The Americas with values of N2.08 trillion or 44.5 percent, N1,076.4 billion or 23.0 percent and N753.9billion or 16.1 percent of the second quarter 2014 total values.

The value of Nigeria’s imports totalled N1.97 trillion in the second quarter of 2014, representing a rise of N431.8 billion or 27.9 percent above the level in the first quarter of 2014.

The balance of trade stood at N2.7 trillion, representing a rise of N280.9 billion or 11.6 percent from the N2.4 trillion of the first quarter of 2014, and N560.2 billion or 24.68 percent from the N2.14 trillion of the corresponding quarter of 2013.

Despite the country’s balance of trade surplus for second quarter, the data is backwards looking and we expect deterioration in coming months following the 32 percent slump in oil prices since July 2014.

Businessday