Weekly Economic And Financial Commentary – September 07, 2020

Foreign Trade in Goods Statistics (Q2 2020) released by the NBS last week showed Nigeria recorded a trade deficit of N1.8 trillion in Q2 2020 compared to a deficit of N139.9 billion in Q1 2020 following a sharp fall in exports by 51.7% YoY (-45.6% QoQ) to N2.2 trillion. The decline in total exports emanated from decline in crude oil exports by 60.5% YoY (-47.2% QoQ) to N1.55 trillion following crunch in average Brent oil price to $32.30/barrel (vs. $52.50/barrel in Q1 20) and lower production of 1.81mbpd in Q2 compared to 2.07mbpd in Q1 20. Exports of other oil products and manufactured goods declined by 28.0% YoY and 139.6% YoY respectively. Elsewhere, imports grew 0.4% YoY and fell 10.7% QoQ. The QoQ moderation in imports was driven by decline in import of mineral fuel (82.4% QoQ) which outweighed increases recorded in the importation of raw materials, solid mineral and energy goods. The modest increase YoY stemmed from 129.8% YoY growth in the importation of energy goods. Overall, total value of Nigeria’s merchandise trade fell by 37.6% QoQ and 27.5% YoY to N6.2 trillion (the lowest value since Q4:2017).