Nigeria’s all products terms of trade (calculated as the receipts of exports as a percentage of payments for imports), indicated increases in the three months of 2018Q2. Indexed at an average of 110.8% in 2018Q21, the favourable TOT reflects improvement from an average of 99.2% in 2018Q1. A further breakdown shows that TOT indices for April, May and June stood at 100.5%, 111.1% and 109.2% respectively which implies that the value of exports exceeded imports by 0.5%, 11.1% and 9.02% in each of the months. The positive trade position is attributable to improvements in mineral, animal and vegetable products group, as reported. With renewed interest in the Agric and mineral sectors by the government and private sector, we expect an improvement in the trade position.
Macroeconomic Report & Economic Updates
African countries have been left out of the recent benefits accruing from international trade. For example, they accounted for only 3.2 percent of world trade in 2013 compared to 5 percent in the mid-1960s. Regional integration can reverse this weak performance as it holds the promise for countries to gain from the resultant economies of scale and enhanced competitiveness. It will also help to expand the markets for foreign direct investment.
A recent report by the National Bureau of Statistics (NBS) indicates that Internally Generated Revenue (IGR) at the subnational level decreased slightly between 2014 and 2015. Specifically, the report shows that on the average, the IGR of all 36 states declined by 3.6 per cent from N707.9 billion in 2014 to N683.6 billion in 20157. A further disaggregation reveals that while IGR in 11 states improved in 2015 compared to 2014, IGR in 24 states were below their 2014 levels. As expected, Lagos state generated the most IGR during the period. Given that domestic resource mobilization is the most viable alternative to complement the shortfalls (driven by lower oil prices) in budgetary allocations to states from the federal government, state governments need to do more to improve the effectiveness and efficiency of revenue collection.
Export and its Components: In 2015 and 2016Q1, overall export earnings declined significantly to a record low of less than $3000 million in 2016Q1, as against the peak of above $10,000 million in 2008
In the third quarter of 2017, NBS report show that Nigeria recorded a marginal quarter-overquarter and significant Year-on-Year increases in the value (in Naira terms) of merchandise (goods) foreign trade. At N5.92 trillion, total merchandise trade increased 3.9 percent over the preceding quarter and 23.9 percent over the corresponding quarter in 2016. Specifically, with exports rising QOQ by 15.2 percent to N3.57 trillion and imports shrinking by 9.4 percent to N2.35 trillion, trade balance amounted to a surplus of N1.22 trillion in 2017Q3- a substantial 142 percentage increase (QOQ) in trade surplus value.