Nigeria Q2'18 Trade Report - Trade Surplus Widens Amid Dip In Petrol Imports
Trade surplus widens amid dip in petrol imports
Nigeria’s current account surplus improved 8% q/q to ₦2.4 trillion in Q2’18 amid a decline in both exports (5%) and imports (16%). Following this, H1’18 current account surplus came in at ₦4.5 trillion, higher than FY’17 surplus (₦4.0 trillion) and the highest since 2014—pointing to the turnaround in Nigeria’s current account since the 2014 oil price crash.
At ₦2.1 trillion, Q2’18 imports were down 16% q/q, reaching their lowest point since Q1’16, which is notable for being the final quarter before a significant currency devaluation in June 2016. The decline in imports can be attributed to much lower motor spirit imports in the quarter (from ₦718 billion to ₦278 billion), which is consistent with National Bureau of Statistics (NBS) data on petroleum imports which shows a 15% q/q dip in motor spirits imports.
Admittedly, we have not seen this happen, but recent challenges in agriculture caused by the Herdsmen crisis may put upward pressure on Nigeria’s imports, although the effect may be tempered by weakening global food prices. On the exports front, strong crude oil exports and resilient prices should support Nigeria’s current account balance, and we do not expect any material change in Nigeria’s trade profile in the near-term.
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