Nigeria’s trade surplus experienced a significant year-on-year (YoY) increase of 69 percent, reaching $11.58 billion for the first ten months of 2022 (January to October), up from $6.85 billion in the same period of 2021, according to a report by Elizabeth Adegbesan on January 6, 2023. The Central Bank of Nigeria (CBN) highlighted this growth in its Economic Report for October 2022, released the previous day, reflecting a robust performance in the nation’s external trade.
Boost in Export Receipts
The surge in the trade surplus is largely attributed to a 14 percent YoY rise in export receipts, which climbed to $54.21 billion in 2022 from $47.46 billion in 2021. This increase underscores Nigeria’s strengthened export sector during the period. However, the CBN noted a sharp month-on-month (MoM) decline of 93.7 percent in the trade surplus, dropping to $50 million in October 2022 from $750 million in September, driven by a spike in import costs.
Merchandise imports also saw a modest YoY increase of 1.47 percent, rising to $42.61 billion in the first ten months of 2022 from $41.99 billion the previous year. In October alone, imports surged by 34.9 percent to $4.64 billion, up from $3.44 billion in September, with petroleum product imports jumping to $1.24 billion from $120 million, significantly impacting the trade balance.
Crude Oil and Non-Oil Contributions
The CBN’s report highlighted impressive gains in the crude oil sector, bolstered by the OPEC+ decision to cut global production by 2 million barrels per day (mb/d) from November 2022. This move led to higher crude oil prices on the international market, boosting Nigeria’s export earnings. Crude oil and gas export receipts rose to $4.30 billion in October 2022 from $3.81 billion in September, with crude oil exports alone increasing by 13.3 percent to $3.65 billion, accounting for 77.9 percent of total exports.
The price of Nigeria’s reference crude, Bonny Light, also rose by 3.5 percent to an average of $96.56 per barrel from $93.25 per barrel in September. Gas export receipts grew by 9.6 percent to $0.64 billion (13.7 percent of total exports) from $0.58 billion, while non-oil export earnings edged up by 3.6 percent to $0.40 billion from $0.38 billion, supported by favorable commodity prices globally.
Implications for Nigeria’s Economy
The data reflects a mixed economic picture, with a robust annual trade surplus offset by monthly volatility due to rising import bills. The increase in petroleum product imports highlights Nigeria’s reliance on refined products, a challenge that could influence future trade strategies. Meanwhile, the growth in crude oil and non-oil exports suggests a diversified export base, though the latter remains a smaller contributor.
This performance in 2022 positions Nigeria to navigate global economic shifts, particularly those tied to oil production cuts. However, sustaining the trade surplus will depend on managing import costs and enhancing non-oil export sectors in the long term.
