Nigeria Q3'18 Trade Report - EGINA FPSO shrinks trade surplus to ₦680 billion
NIGERIA CURRENT ACCOUNT
EGINA FPSO shrinks trade surplus to ₦680 billion
Nigeria’s current account surplus came in at ₦0.7 trillion (Q2’18: ₦2.1 trillion)—the weakest since Q2’17—due to the impact of the recorded import of the EGINA FPSO vessel (Floating, Production, Storage, Offloading) in August 2018. Stripping out the value of the FPSO, current account surplus was c.₦1.8 trillion. Overall, exports were up 8% q/q and 36% y/y to ₦4.9 trillion whilst imports were up 74% q/q and 68% y/y to ₦4.2 trillion.
Nigeria’s 2019 import bill should be reduced by lower oil prices (feeding through to petroleum product imports) and potential Central Bank of Nigeria restrictions on foreign exchange access for certain goods, as hinted at the November Monetary Policy Committee meeting. Meanwhile, crude oil would lead exports again in 2019, and we project stable (albeit constrained) volume of 2 mb/d in 2019. However, oil prices are expected to be weaker y/y—Vetiva forecast: $60/bbl, Brent crude average of $73/bbl between January and November 2018. Finally, we anticipate some currency depreciation in 2019 and expect this to bloat exports more than imports as import substitution makes Nigeria’s imports more elastic.
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