Research Document: NESG 2022 Q2 Foreign Trade Alert, September 2022

Posted Tue, Sep 13, 2022 10:19 AM

External Trade rose by 32 percent as the Trade surplus widened in 2022 Q2

Nigeria’s external trade value increased by 32 percent (year-on-year) to N12.8 trillion in the second quarter of 2022 from N9.7 trillion in the corresponding period of 2021. On a quarterly basis, the value of external trade fell slightly by 1.5 percent relative to its level in 2022Q1 (N13 trillion). In the first half of 2022 (H1’2022), Nigeria’s external trade value rose by 46.6 percent to N25.8 trillion from N17.6 trillion recorded in the first half of 2021 (H1’2021).

Remarkably, growth in exports further outpaced that of imports, resulting in the further expansion of the trade surplus to N2 trillion in 2022Q2 from N327.3 billion and N1.2 trillion in 2021Q2 and 2022Q1, respectively (see Figure 2). Moreover, the favourable trade balance could be attributed to the persistent increase in the prices of oil and non-oil commodities on the global market, fuelled by the geopolitical tensions between Russia and Ukraine.

Oil and Non-Oil Export Earnings rose in 2022 Q2

The total value of goods exported increased by 48 percent (year-on-year) to N7.4 trillion in 2022Q2 from N5 trillion in 2021Q2. It also represents an improvement when compared with the total export earnings recorded in 2022Q1 (N7.1 trillion). Total export earnings in H1’2022 stood at N14.5 trillion, 81.3 percent above the value recorded in H1’2021 (N8 trillion). The growth in export earnings in 2022Q2 was driven by improvements in oil and non-oil exports. Oil exports – which accounted for 91 percent of overall export earnings in 2022Q2 – rose by 45.6 percent to N6.7 trillion in 2022Q2 from N4.6 trillion in 2021Q2. Despite the further decline in domestic crude oil production in 2022Q2, increases in oil export earnings could be attributed to higher global oil prices. Nigeria’s Bonny Light price averaged US$118.3/barrel in 2022Q2, compared with an average oil price of US$68.7/barrel in 2021Q2.