Balance of trade deficit: Moderation in sight?
We continue with our series of excerpts from our core strategy document – The Nigeria Strategy Report. In today’s piece, we review Nigeria’s trade balance over H2 16 and delineate our outlook for same over 2017.
In line with patterns observed since the collapse of oil prices in 2014, Nigeria’s external trade balance continued to be adversely impacted by depressed oil receipts as available data over H2 2016 showed that exports ($10.5 billion) continued to trail imports ($11.3 billion) leaving the deficit picture intact. On the export front, though crude oil prices have rallied over 2016—posting a 55% gain which ought to have been favourable, average Bonny Light remained 37% lower YoY at $30.7/bbl due to the depressed price levels in January. Added to this, renewed unrest in the Niger Delta drove production to multi-decade lows (9M 16: -13% YoY to 1.84 mbpd) to leave exports softer in the review period (-17% YoY to 1.39mbpd).​
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