Oil leads Nigeria’s N19 trn H1 export income
Sopuruchi Onwuka
Growth in Nigeria’s trade surplus jumped by 6.5 percent in the second quarter of the year, propelled by rising crude oil volumes as the Nigerian National Petroleum company (NNPC) Limited posts both increasing revenue and low production losses in the first the year.
The enhanced trade balance indicates an improvement in the value of crude oil exports, non-crude oil and non-oil exports.
Data collated by the Nigerian Bureau of Statistics (NBS) show that the country’s total trade surplus increased by N418 billion from N12,474 billion in first quarter (Q1) to N6,945 billion in Q2, 2024.
The data also show a favorable balance of payment differential of N6,945 billion between total exports of N19,419 billion and total imports of N12,474 billion in the second quarter of the year.
Crude oil exports, according to the reports, led trade surplus in the period despite experiencing a 5.99% contraction between first and second quarter of the year. The export value declined fromN15,487 billion in Q1 to N14,560 billion in Q2, reflecting a corresponding dip in crude oil revenues.
The drop in crude oil export highlights a trend in the first half of the year when production reduced by 11% between January and June 2024, declining from 1.4 million barrels per day (mbd) in January to 1.28 mbd in June.
The NBS data showed that of the petroleum oils and oils obtained from bituminous minerals, crude oil represented the highest export category, with a total value ofN14.56 trillion.
However, export of non-crude oil commodity, including petroleum derivatives such as natural gas and other petroleum gases, saw a significant value increase of 32.1% between first and second quarter of the year. The export value of non-crude oil comodities rose from N3,681 billion in Q1 to N4,859 billion in Q2, reflecting a substantial quarter-on-quarter growth in the non-crude oil segment.
Non-oil exports value increased by 9%, rising from N1,779 billion in Q1 to N1,944 billion in Q2; led by raw materials and manufactured goods. Exports of raw materials increased by 4.01%, rising from N353 billion in Q1 to N367 billion in Q2; driven by Urea – whether or not in aqueous solution and non-monetary gold, including gold plated with platinum existing in powder form.
Manufactured goods export value also increased by 78.95%, rising from N269 billion in Q1 to N481 billion in Q2 202the second quarter. Manufacturing exports were driven in the period by unwrought aluminum alloys, floating or submersible drilling, or production platforms and other floating structures.
On the downside, agriculture and solid mineral sectors indicated fall in export volumes in the period. The two sectors posted export decline value of N65.85 billion in the second quarter.
According to the NBS, agricultural exports suffered 5.93% dip, falling from N1,035 billion in first quarter to N974 billion in second quarter.
Also, solid mineral exports plunged 7.65% within the same time period, falling fromN63.41 billion in first quarter to N58.56 billion in the second quarter.
The positive net export position, analysts point out, is valued in Naira and not in foreign exchange equivalents which are actually the mediums of exchange in international trade. The use of Naira, according to them, actually exaggerates the value of trade volumes.
Analytical medium, Dataphyte, also noted that the trade surplus might not be as a result of an increase in export demand and production, but the effect of the devalued Naira which has made export cheaper and discouraged imports.
Within the last 7 months, the Naira has devalued by 80%, falling from N891.06 toN1599.89 against the dollar in July.
So, while the country recorded a trade surplus, the CBN Purchasing Managers ‘ Index (PMI) on new export orders and output suggests that economic activities and production shrunk between first and second quarters of the year.
Also, the lowest output and new export order index were recorded in February and March; while the index for both months stood at 37.2 on output and 38.1 on new export orders.
