Total value of Nigeria’s merchandise trade contracted in 2018Q2. Valued at N6.6 trillion1, total trade fell quarter-on-quarter by 8.9 percent from the N7.2 trillion recorded in the previous quarter. Both exports and imports declined during the period: Exports shrunk by 4.9 percent down to N4.5 trillion and was triggered by a huge fall in solid minerals and manufacturing exports. On the other hand, imports declined from N2.5 trillion to N2.1 trillion. Further review shows that crude oil accounted for 83.5 percent of total foreign merchandise trade, and trade to GDP lowered to 22.5 percent from 25.5 percent. However, there was a recorded trade surplus during the period, valued at N2.4 trillion. Going forward, there is a need for export promotion strategies, including subsidies, tax exemptions, and special credit lines to support non-oil business growth.
Macroeconomic Report & Economic Updates
This study investigates the effects of merchandise trade and investment flows on the transmission of business cycles between members of ECOWAS and the major trading partnersbetween 1985 and 2014. Total trade and FDI significantly influence the transmission of business cycles with elasticities of 1.1% and 0.7%, respectively in the long run. There are little variations across the major trading partners and other measures of trade flows. Intra-industry trade flows with all partners, EU and USA influences the cross-country business cycles with elasticities of 1.0%, 0.5% and 1.8%, respectively.
Recent report in the media highlights that Nigerias GDP has dropped to $296 billion in 2016, in contrast to the $481 billion recorded in 20151 and Nigeria has lost its position as Africas largest economy to South Africa. This conclusion was based on the computation of GDP with current naira-dollar exchange rate. However, while the naira has significantly lost its official value since the adoption of a flexible exchange rate, estimating GDP merely with a single exchange rate figure (rather than its yearly average) cannot be regarded as an appropriate method to conclude on Africas largest economy.
Business Confidence Index: After its peak in 2011, business confidence fell sizeably in 2012 as well as 2015Q2. Most recently, BCI has declined to a negative levels in 2016Q1 and Q2. The recent declin
Recently released data by the National Bureau of Statistics (NBS) shows that there was significant increase in Nigerias total merchandise trade for 2016Q3. Basically, the total merchandise trade increased (quarter-on-quarter) by 16.29 percent to N4, 722 billion in 2016Q3;owing to 29.1 percent increase in exports and 6.2 percent rise in imports. Oil exports increased by 31 percent to N1, 943 billion, while non-oil exports increased by 20.5 percent to N440 billion. However, on the aggregate, Nigeria recorded yet another trade deficit of N104 billion, indicating continuous higher imports relative to exports. Overall, though there is improvement in the performance of non-oil sector, however, this is insufficient to effectively complement the loss in oil trade sustained since the beginning of oil price crash. This suggests that diversification into non-oil sector may not be able to rescue the economy in the short term. However, while the diversification efforts should be sustained, eliminating hurdles in oil production may be instrumental to higher exports, especially as oil price increase is gaining momentum.