Nigeria’s Trade Deficit Drops By 61% To $340m

The nation’s trade deficit fell year-on-year (YoY) by 61 per cent to $340 million in July 2021 from $880 million in July 2020.

However, receipts from crude oil and gas exports rose by 127 per cent to $3.99 billion in October 2021 from $1.76 billion in 2020.

The Central Bank of Nigeria, CBN, disclosed this in its Monthly Economic Report for July 2021.

The report stated: “Trade balance improved in July 2021, resulting from risk sentiments emanating from the spread of the Delta-variant of COVID-19, which subdued imports.

“A lower trade deficit of $0.34 billion was recorded in July 2021, compared with $2.4 billion in June 2021.

“Aggregate exports increased marginally by 0.2 per cent to $4.45 billion, while total import declined significantly by 30 per cent to $4.80 billion, compared with $4.44 billion and $6.85 billion, respectively, in June 2021.

“Nigeria’s crude oil and gas export receipts decreased due largely to lower crude than-expected gas export.

“The value of crude oil and gas export decreased by 1.0 per cent to $3.99 billion, compared with $4.04 billion in June 2021.

“A breakdown indicates that the value of gas export decreased by 17.9 per cent to $0.46 billion.

“The decline in gas export was due, majorly, to the lower export of liquefied petroleum gas (LPG) in the review period.

“The value of crude oil export, on the other hand, increased by 1.7 per cent to $3.53 billion in July 2021.

“The increase in crude oil receipts was due, majorly, to improvement in both price and production to $75.93 pb and 1.50 mbpd in July 2021, relative to $73.46 pb and 1.47 mbpd in June 2021.

“Crude oil and gas exports component remained dominant, contributing 89.7 per cent of total exports, with oil accounting for 79.3 per cent and gas export 10.4 per cent.”

Similarly, non-oil exports earnings grew by 35 per cent to $460 million in July 2021 from $340 million in July 2020.

The apex bank attributed the growth to growing global demand, especially from sub-Saharan Africa.

It stated: “Non-oil export grew by 11.7 per cent to $0.46 billion in July 2021, relative to $0.41 billion in June 2021.

“A disaggregation of non-oil export shows that the value of electricity export remained at $0.07 billion, while other non-oil increases by 13.3 per cent to $0.44 billion, from $0.39 billion in June 2021, as a result of increased export of agricultural produce, particularly sesame seeds.

“As a share of total export, non-oil constituted 10.3 per cent. “Import demand fell in the review period, reflecting supply chain disruptions, due to containment measures to stem the spread of the COVID-19 in some trading partner economies.”