Nigeria’s trade position showed further improvement at the start of 2018 as current account surplus rose from ₦0.7 trillion and ₦1.8 trillion in Q1’17 and Q4’17 to ₦2.2 trillion in Q1’18. This represented more than half of FY’17 current account surplus (₦4.0 trillion) and a far cry from a FY’16 deficit of ₦0.3 trillion. Driving this was an 8% y/y and 56% y/y increase in imports and exports respectively.

Crude exports surge, one-off spike in non-oil exports

Nigeria’s exports rose 20% q/q to its highest value since Q3’14. Crude oil exports increased 10% q/q and 51% y/y, supported by recovered production volumes and much stronger oil prices. To be specific, crude oil output and average price distribution for the relevant periods were: 1.75 mb/d and $55/bbl in Q1’17, 1.95 mb/d and $61/bbl in Q4’17, and 2.00 mb/d and $67/bbl in Q1’18. Notwithstanding the improvement in crude exports, non-crude oil exports actually accounted for a greater share (58%) of the rise in total exports on a q/q basis. This is because non-crude oil exports rose 70% q/q and 76% y/y to ₦1.1 trillion (a four-year high), causing crude oil as a percentage of total exports to moderate to 76%, the lowest crude oil contribution to exports since Q3’15 (69%). Ordinarily, this development would be viewed positively as it is indicative of greater diversification of exports. However, the spike in non-crude oil exports can be traced to an unusually high exported value of transport equipment (vehicles, aircraft, or constituent parts) in February which actually represented a re-export. Therefore, as these goods were initially imported into the country before exported in February, we do not consider this development to be indicative of any change in Nigeria’s export profile.

Petroleum imports may point towards greater smuggling

After two consecutive quarterly declines, imports rose 19% q/q to ₦2.5 trillion. We note that imports in the quarter were skewed towards January – accounting for 42% of Q1’18 imports, highest month on record. Meanwhile, we highlight that Nigeria’s import profile remains tilted towards processed goods (c.80% of imports) such as manufactured goods and refined petroleum products, a stark contrast with exports which are mainly primary products (above 90%).

We draw attention to a significant jump in mineral fuel (petroleum product) imports in Q1’18 – up 183% q/q and 41% y/y respectively. Whilst this must have been partly driven by a higher landing cost of petroleum products on the back of stronger oil prices in the period, we are convinced that volumes also rose during the period. Indeed, this is supported by Ministry of Petroleum Resources data which shows a significant uptick in petrol truck out since the turn of the year – ytd monthly average of 52 million liters per day vs. 2017 average of 35 million liters and estimated national demand of 40 million liters. Furthermore, the extraordinary nature of the increase in PMS imports is evidenced by the fact that it accounted for 29% of total imports, compared to 5-year average of 17% and the previous high of 31% in Q1’13. In our view, as demand for petroleum products is little changed in recent times, this may indicate a larger amount of smuggling activities. If so, this would represent a non-trivial waste for Nigeria given the size of the implicit subsidy borne by the Nigerian National Petroleum Corporation and the additional pressure of excessive petroleum imports on Nigeria’s dollar holdings. Nevertheless, this status quo is likely to persist amid a strong oil price outlook for the rest of 2018 and high unlikelihood of a change to the petrol pricing template before the 2019 elections.

Positive oil outlook buoys current account

We expect non-crude oil exports to normalize from Q2’18 onwards and foresee oil & gas exports dominating Nigeria’s exports given the healthy pricing and volume outlook in the space. Meanwhile, we expect imports to remain stable amid continued foreign exchange market stability and strengthening consumer wallets. All in all, the positive outlook for crude oil prices should buoy Nigeria’s trade balance in 2018.

SOURCE: https://brandspurng.com/nigeria-q118-trade-report-current-account-dominated-by-petroleum-story/

We expect non-crude oil exports to normalize from Q2’18 onwards and foresee oil & gas exports dominating Nigeria’s exports given the healthy pricing and volume outlook in the space. Meanwhile, we expect imports to remain stable amid continued foreign exchange market stability and strengthening consumer wallets. All in all, the positive outlook for crude oil prices should buoy Nigeria’s trade balance in 2018.


Hopefully

Buhari will take the glory as Minister of Petroleum yet it is Kachikwu that is doing all the job. Baru stealing all the money

It is a good development, but the problem is...

After two consecutive quarterly declines, imports rose 19% q/q to ₦2.5 trillion. We note that imports in the quarter were skewed towards January – accounting for 42% of Q1’18 imports, highest month on record. Meanwhile, we highlight that Nigeria’s import profile remains tilted towards processed goods (c.80% of imports) such as manufactured goods and refined petroleum products, a stark contrast with exports which are mainly primary products (above 90%).

Personally speaking, I don't like this at all. This is how we have been running our economy since independence, and why our economy is forever vulnerable. We keep on exporting primary products...which are processed abroad for higher profits and end up benefiting foreign economies.

(Like now, we export crude...which is processed into all sorts of products, including PMS, and then we import the same PMS...at higher cost mind....and then we pay 'subsidy' on it. And we have been doing that for years. God help us.).

If we could at least be experting stuff like processed products from oil...eg plastics, etc...we could be quite proseprous.

And we are still importing refined petroleum products....and we exepct prices of PMS to remain low. We better be more realistic...we cannot be importing refined products, and selling them at lower prices than we import them for. Or else we are going to keep on having fuel scarcity whether we like it or not...unless we deregulate fully.

Gteat

Ok

Imagine if lord lugard didn't merge us. Niger delta is still carrying the burden of this fictitious country.

Crude oil the reason why we suffer!

K

sanandreas:
Imagine if lord lugard didn't merge us. Niger delta is still carrying the burden of this fictitious country.

OK...if Flora Shaw's boyfriend did not merge us...it would be the Niger Delta fighting with the rest of the South for control of oil resources.

The problem with our economy is that we prefer to export primary products...rather than use our brains to make things .
If you want a better economy, then you need to work for it. Stop expecting a free lunch.

Does it matter who gets the job done?

nairavsdollars:
Buhari will take the glory as Minister of Petroleum yet it is Kachikwu that is doing all the job. Baru stealing all the money

post=68312627:
GOOD DEVELOPMENT

You cant obviously read..

Nigeria’s exports rose 20% q/q to its highest value since Q3’14. Crude oil exports increased 10% q/q and 51% y/y, supported by recovered production volumes and much stronger oil prices.

Crude oil is 51% of that increase..

However, the spike in non-crude oil exports can be traced to an unusually high exported value of transport equipment (vehicles, aircraft, or constituent parts) in February which actually represented a re-export. Therefore, as these goods were initially imported into the country before exported in February, we do not consider this development to be indicative of any change in Nigeria’s export profile.

Non oil export

nairavsdollars:
Buhari will take the glory as Minister of Petroleum yet it is Kachikwu that is doing all the job. Baru stealing all the money

Go and wash plate n prepared to work...this morning....dont come n comments shit

Too much grammar. Where's the money?

nairavsdollars:
Buhari will take the glory as Minister of Petroleum yet it is Kachikwu that is doing all the job. Baru stealing all the money

1.At least Buhari is saving large chunks of the money in the reserve...my problem with him is that we are throwing away millions on things like that pretend fuel subsidy (Baru's stealing).

2.If you want to stop Baru 'stealing', then you should support deregulation, or the right of fuel marketers, big and small, to sell fuel at prices that they want to sell. That would end the stealing in the name of illegal subsidy that NNPC is up to, and would allow for massive investment in our oil sector. Sure prices will go up , but scarcity would end, and we would even have more money to save, and possibly direct to other things. Like railways.

theoldpretender:


OK...if Flora Shaw's boyfriend did not merge us...it would be the Niger Delta fighting with the rest of the South for control of oil resources.

The problem with our economy is that we prefer to export primary products...rather than use our brains to make things .
If you want a better economy, then you need to work for it. Stop expecting a free lunch.

We want true federalism and resource control. What happens to us when oil is gone?

Oiyel

Do you want to study and pass SAS certification in one sitting? Call Temitayo on 08162644554. All study materials, past questions and exam mode software available

sanandreas:


We want true federalism and resource control. What happens to us when oil is gone?

1.I don't like true federalisim. Not because it is a bad idea...it is a good idea...but because (ideally) we end up with six regions doing nothing but exporting oil, cocoa, cotton., minerals, etc...and sharing the money. Which is good...if prices of those things stay high. (And that isnt the case all the time).

2.What I want is increased manufactruing, using the raw materials we have. The North, for instance, can use groundnuts to make hundreds of products, which can be exported for higher profits than just selling groundnuts. Ditto oil cocoa, etc.

3.I also want to see an end to subsidies, because subsides on things like oil and fertilizer means that the government is dictating the profits of businessmen and investors who sell those things. You won't like it if you were a businessman, and govt forced you to sell your wares at a low price, and paid you insufficent money in the name of subsidy as your 'profit'. GSM works well because Obasanjo, in one of the wise moves of his admin, refused to force the GSM companies to sell data and airtime at low prices...which meant more investment and more players coming in (See 9 mobile...once eitsalat pulled out, 8 investors showed up to buy...because they are sure of a reutrn on investment).

[/b][color=#000099][/color]

post=68312627:
[b]We expect non-crude oil exports to normalize from Q2’18 onwards and foresee oil & gas exports dominating Nigeria’s exports given the healthy pricing and volume outlook in the space. Meanwhile, we expect imports to remain stable amid continued foreign exchange market stability and strengthening consumer wallets. All in all, the positive outlook for crude oil prices should buoy Nigeria’s trade balance in 2018.


Hopefully

Glaringly, the emphasis is on current account which i personally opine the uphill is remarkably as a result of Dollar to Naira appreciation. Nigerians are discouraged to order for foreign goods which in turn see us turn to locally manufactured goods due to the exchange rate. Most celebrities resort to craving out beautiful creativity from ankara. I think Kemi Adeosun deserves some accolades on this.

sanandreas:
Imagine if lord lugard didn't merge us. Niger delta is still carrying the burden of this fictitious country.

What is Niger delta?

slimbowwow:
[b][/b][color=#000099][/color] Glaringly, the emphasis is on current account which i personally opine the uphill is remarkably as a result of Dollar to Naira appreciation. Nigerians are discouraged to order for foreign goods which in turn see us turn to locally manufactured goods due to the exchange rate. Most celebrities resort to craving out beautiful creativity from ankara. I think Kemi Adeosun deserves some accolades on this.

Very good salient points from you bro.
Thumbs up

post=68312627:
We expect non-crude oil exports to normalize from Q2’18 onwards and foresee oil & gas exports dominating Nigeria’s exports given the healthy pricing and volume outlook in the space. Meanwhile, we expect imports to remain stable amid continued foreign exchange market stability and strengthening consumer wallets. All in all, the positive outlook for crude oil prices should buoy Nigeria’s trade balance in 2018.

Hopefully

We expect after three years of delivering change
Buhari is a disaster who has brought untold hardship on Nigerians who finally considered his application and employed him in 2015.
Buhari is a monumental error of gargantuan proportions that must be corrected in 2019!
Do you have your PVC ready?
Oya, let’s go there.

theoldpretender:
It is a good development, but the problem is...



Personally speaking, I don't like this at all. This is how we have been running our economy since independence, and why our economy is forever vulnerable. We keep on exporting primary products...which are processed abroad for higher profits and end up benefiting foreign economies.

(Like now, we export crude...which is processed into all sorts of products, including PMS, and then we import the same PMS...at higher cost mind....and then we pay 'subsidy' on it. And we have been doing that for years. God help us.).

If we could at least be experting stuff like processed products from oil...eg plastics, etc...we could be quite proseprous.

And we are still importing refined petroleum products....and we exepct prices of PMS to remain low. We better be more realistic...we cannot be importing refined products, and selling them at lower prices than we import them for. Or else we are going to keep on having fuel scarcity whether we like it or not...unless we deregulate fully.

just wondering how could you make so much a emphatic statement without mentioning 'Refinery ' even for once.

slimbowwow:
[b][/b][color=#000099][/color] Glaringly, the emphasis is on current account which i personally opine the uphill is remarkably as a result of Dollar to Naira appreciation. Nigerians are discouraged to order for foreign goods which in turn see us turn to locally manufactured goods due to the exchange rate. Most celebrities resort to craving out beautiful creativity from ankara. I think Kemi Adeosun deserves some accolades on this.

Accolades for wearing ankara or accolades for what

theoldpretender:


OK...if Flora Shaw's boyfriend did not merge us...it would be the Niger Delta fighting with the rest of the South for control of oil resources.

The problem with our economy is that we prefer to export primary products...rather than use our brains to make things .
If you want a better economy, then you need to work for it. Stop expecting a free lunch.

You're making the mistake blaming people.

The bucks stops at the governments door.

Lending rates in double digits are crushing the real sector of the economy.

How do you expect industrialist to borrow at 28% and you want the sector to boom? Dangote wondered how the government expects agriculture to thrive when interest rates are 20% (as of then)

High lending rates kill productivity which is extremely important for the country's companies to be globally competitive.

If lending rates were in single digits, they would feel confident importing advanced machinery from abroad that would make them highly competitive and productive.

With low interest rates, they can continue borrowing and investing until the Nigerian market becomes too small . They then turn aggressively to exports.

AMCON has been seizing company assets right left and center. Some are not some reprehensible fat cat who refuses to pay his debts but reputable blue chip companies.

I was at Victory Park Estate, Osapa London last year built by UAC.

Apparently, the estate had been taken over by AMCON!

theoldpretender:

1.At least Buhari is saving large chunks of the money in the reserve...my problem with him is that we are throwing away millions on things like that pretend fuel subsidy (Baru's stealing)

Baru is stealing on behalf of and for Buhari in the same way that Buhari was stealing for Abacha in PTF.
Have you seen how much loans Buhari has borrowed since 2015? He is not saving money. He is busy stealing like an hungry madman in an eatery.

Serious focus on generation of non-oil revenues will go a long way to boost our economy and the same time lead to slide in unemployment rate.Oil smuggling and illegal bunkering will not stop because the big wigs in and out of government are still savouring good taste of these illegal and shady deals, they will only stop when our big crude oil consumers begin to fully exploit areas of crude oil alternatives.

seguno2:


Baru is stealing on behalf of and for Buhari in the same way that Buhari was stealing for Abacha in PTF.
Have you seen how much loans Buhari has borrowed since 2015? He is not saving money. He is busy stealing like an hungry madman in an eatery.

1.Our reserve going up from $28bn in 2015 to $40bn in 2017 is not good enough for you?

2.We are borrowing because the oil price is not high enough for us to run an economy without borrowing. Oil was at $75 in May2015, and went down to $30 in May 2016 before rising to $70 now. Any one could see that we had to borrow to make ends meet. Diversification isnt a one day job.

3.Again, we need oil to be at $139 to balance the budget (see the article here). That is why we borrowed, even when GEJ was in power, because even when oil was between $100-120 in 2010-14...we still were not earning enough.

4.If we want to earn enough forex and stop borrowing too much...we need to remove subsidies, allow deregulaiton in things like the price of fuel and the price of electricity...which would in turn attract investors and money. We also need to end our dependence on exporting primary products...and use them to MAKE STUFF THAT WE CAN EXPORT...for higher profits.


Which is why I am no APC or PDP supporter. They run the economy on the idea that we need to keep on selling stuff to grow rich. And we share the money. That is not how we run an economy.

grandstar:


You're making the mistake blaming people.

The bucks stops at the governments door.

Lending rates in double digits are crushing the real sector of the economy.

How do you expect industrialist to borrow at 28% and you want the sector to boom? Dangote wondered how the government expects agriculture to thrive when interest rates are 20% (as of then)

High lending rates kill productivity which is extremely important for the country's companies to be globally competitive.

If lending rates were in single digits, they would feel confident importing advanced machinery from abroad that would make them highly competitive and productive.

With low interest rates, they can continue borrowing and investing until the Nigerian market becomes too small . They then turn aggressively to exports.

AMCON has been seizing company assets right left and center. Some are not some reprehensible fat cat who refuses to pay his debts but reputable blue chip companies.

I was at Victory Park Estate, Osapa London last year built by UAC.

Apparently, the estate had been taken over by AMCON!

Keep in mind that the economy...the high lending rates, and the bad debts...are because we really don't have enough money in the system, and because we rely too much on just revenues from oil (yesterday it was agric, etc.).

There is a simple route out of this...end subsides, deregulate everything...and while prices go up...investment flows in, jobs get created, and we have an end to bad investments.

Banks will even lend at lower rates because they are sure of getting their money back.

That is what this government needs to do...and that is what the past government should have done. (sigh).