Earlier in the week, the National Bureau of Statistics (NBS) released the Foreign Trade Statistics for Q3-2022. According to the report, Nigeria’s total trade merchandise printed at N11.6tn in Q3-2022, up 10.7% y/y compared to its N10.5tn print in Q3-2021. The increase was primarily driven by improved trading activities during the period in relation to Q3-2021, when the economy was recovering from the impact of the Covid-19 pandemic and lockdown measures. However, on a quarterly basis, the country’s total trade declined by 9.7% q/q from N12.8tn recorded in the prior quarter. That said, Nigeria’s trade surplus widened to N269.3bn from a deficit of N199.3bn in Q3-2021 due to faster growth of export bills but fell 86.3% q/q.
 
Providing further perspective, total exports grew by 15.5% y/y to N5.9tn, driven by higher crude oil exports as demand for crude oil remained strong. In addition, higher crude oil prices supported the growth in export value. Interestingly, crude oil export contributed 78.5% of the total export bills as Nigeria made N4.7tn from crude oil exports, up 15.7% y/y. However, export receipts declined on a q/q basis by 19.9% due to low production levels recorded in Q3-2022. According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil output fell through Jul to Sep-2022, printing at 937,766bpd at the end of the period. This reduced crude oil export receipts compared to Q2-2022. On the other hand, import bill expanded to N5.7tn, up 6.2% y/y and 4.2% q/q, largely due to improved local demand for imported goods. In addition, we note that the global inflationary environment was broadly elevated impacting the nominal value of trade activities and consequently Nigeria’s import.

Looking ahead, we expect further upticks in trading activities. Export receipts will remain elevated due to the persistently high crude oil prices (albeit lower than Q2 average). In addition, improvements in crude oil production (up 8.2% in Oct-2022) owing to oil theft recoveries and illegal pipeline discoveries will bolster export bills. Nevertheless, we reiterate the need for the government to diversify the economy’s export proceed sources given the agelong vulnerability of export proceeds to shocks in the crude oil market.