Research Document: NESG Foreign Trade Alert 2022

Posted Mon, Jun 6, 2022 2:18 PM

Nigeria’s external trade value rose sharply by 65.4% (year-on-year) to N13 trillion in the first quarter of 2022 from N7.9 trillion in the corresponding period of 2021. It reflects an improvement in the value of external trade when compared with the fourth quarter of 2021 (N11.7 trillion). It also represents the sixth consecutive quarterly growth in the value of external trade since the third quarter of 2020 (see Figure 1). This suggests that the impact of the global pandemic on cross-border trading is fading away amidst the renewed outbreak of COVID-19 in China.

The geopolitical tensions between Russia and Ukraine will continue to support global oil prices, but OPEC's decision to raise crude oil output in the coming months could ease the upward pressure on crude oil prices, with low oil-producing countries at the receiving end. Unless Nigeria can meet its new quota of 1.8 million barrels per day, the expected fall in oil price coupled with low domestic crude oil production could constrict fiscal space and narrow the country's trade surplus going forward.