In the external sector, newly released foreign trade statistics report showed that merchandise goods worth N32.26 trillion were traded in FY 2018, 39.31% higher than N23.16 trillion recorded in FY 2017.
Of the total goods traded, value of exports increased y-o-y by 40.46% to N19.10 trillion in FY 2018 while the value of imports also rose y-o-y by 37.67% to N13.17 trillion in FY 2017, resulting in a 47.05% y-o-y increase in trade surplus to N5.93 trillion in FY 2018. According to the report, crude oil exports which grew y-o-y by 42.60% to N15.72 trillion, constituted 82.33% of total export value in FY 2018. Non-crude oil exports, on the other hand, increased y-o-y by 31.27% to N3.38 trillion in FY 2018, constituting 17.67% of the total export value.
Further breakdown of the non-crude oil exports showed that agricultural and manufactured goods registered a sharp rise of 796.51% and 178.28% to N302.28 billion and N645.74 billion respectively from N33.72 billion and N232.06 billion respectively in FY 2018. On the import side, fuels & lubricants constituted 29.16% of the total imports in FY 2018 (up from 27.44% in FY 2017) while capital goods (plants and machinery for the production of other goods), industrial supplies and food & beverages constituted 28.42% (up from 18.93%),19.17% (down from 26.45%) and 10.63% (down from 15.23%) respectively in the same period under review.
Europe and Asia dominated Nigeria’s export destinations as exports value to the two regions rose by 64.63% and 33.04% respectively to N8.39 trillion and N5.32 trillion in FY 2018, from N5.10 trillion and N3.99 trillion in FY 2017. On a quarterly basis, total trade rose by 42.89% to N8.61 trillion in Q4 2018, from N6.02 trillion in Q4 2017 (but moderated q-o-q by 5.08% from Q3 2018).
Of the total goods traded, value of exports increased y-o-y by 28.46% (and q-o-q by 3.52%) to N5.02 trillion while the value of imports rose astronomically y-o-y by 69.59% (but fell q-o-q by 14.99%) to N3.58 trillion, resulting in a 19.85% y-o-y decrease (but a signifcant q-o-q rise of 125.54%) in trade surplus to N1.44 trillion in Q4 2018.
In another development, Nigeria’s Nembe Creek Trunk Line (NCTL), a key oil pipeline to the Bonny terminal located in the Niger-Delta area was recently shut down. The 150,000 barrels of oil per day (bpd) capacity pipeline which Shell Petroleum Development Company of Nigeria uses in evacuating its Bonny Light crude grade to the Atlantic coast for export also witnessed an explosion at one of the wells feeding into its trunck line on Saturday, March 2, 2019.
This might further enlongate the re-opening of the closed pipeline by the operator, Aiteo Eastern Exploration & Production, and also have a negative impact on the total volume of crude export from Nigeria in the month of March.
Meanwhile, according to the February 2019 edition of Opec’s Monthly Oil Market Report, Nigeria’s crude oil production increased month-on-month (m-o-m) by 2.99% to 1.79 mbpd in January 2019 from 1.74 mbpd in December 2018. However, Nigeria’s foreign exchange reserves decreased month-on-month (m-o-m) by 1.99% to USD42.31 billion as at Thursday, February 27, 2019, despite 6.65% m-o-m increase in bonny light crude oil price to USD67.70 per barrel as at February 27, 2019.
While we note the significant 47.05% increase in trade surplus to N5.93 trillion in FY 2018, given the rise in trade exports, the fact that crude oil exports constituted 82.33% of the total exports remained a concern. This, which further emphasizes the over-reliance of Nigerian economy on crude oil price, leaves Nigeria vulnerable to external shocks without adequate external buffers.
Thus, an urgent need for the Federal Government to quickly facilitate the implementation of its Economic Recovery Growth Plan (ERGP) as its impact has not really been felt in the non-oil sector (Non-oil export only contributed 17.67% to the value of exports).