+Nigeria’s Automobile Industry: Going in Reverse?
Bumper Harvest?: Nigeria’s Trade Surplus
In Q2 2024, Nigeria sustained its record of trade surplus, reflecting a positive net export position.
This indicates an improvement in the balance of trade driven by increased value in crude oil exports, non-crude oil and non-oil exports.
Also, 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 to ₦1599.89 against the dollar in July.
The total trade surplus expanded by 6.5% quarter-on-quarter. It increased from ₦6,527 billion in Q1 to ₦6,945 billion in Q2 2024.
Total exports stood at ₦19,419 billion while total imports stood at ₦12,474 billion in Q2 2024.
Despite being the primary driver of Nigeria’s trade surplus, crude oil exports experienced a contraction of 5.99% between Q1 and Q2 2024. The export value declined from ₦15,487 billion in Q1 2024 to ₦14,560 billion in Q2 2024, reflecting a quarter-on-quarter reduction in crude oil revenues.
On a per barrel basis, crude oil production reduced by 11% between January and June 2024, declining from 1.4 Mbpd in January to 1.28 Mbpd in June.
Non-crude oil exports, including products classified under other petroleum derivatives such as natural gas and other petroleum gases, saw a significant value increase of 32.1% between Q1 and Q2 2024. The export value rose from ₦3,681 billion in Q1 2024 to ₦4,859 billion in Q2 2024, reflecting a substantial quarter-on-quarter growth in the non-crude oil segment.
Non-oil exports recorded a quarter-on-quarter value increase of 9%, rising from ₦1,779 billion in Q1 2024 to ₦1,944 billion in Q2 2024. This expansion was primarily attributed to an increase in the export value of raw materials and manufactured goods.
Exports of raw materials increased by 4.01%, rising from ₦353 billion in Q1 2024 to ₦367 billion in Q2 2024. This increase was driven by the export of Urea – whether or not in aqueous solution – and Non-monetary gold (including gold plated with platinum) in powder form.
Manufactured goods export value experienced a substantial increase of 78.95%, rising from ₦269 billion in Q1 2024 to ₦481 billion in Q2 2024. This sharp increase was driven by exports of unwrought aluminium alloys, floating or submersible drilling, or production platforms and other floating structures.
Conversely, agricultural exports experienced a 5.93% decline between Q1 and Q2 2024, decreasing from N1,035 billion in Q1 2024 to N974 billion in Q2 2024.
Also, solid mineral exports decreased by 7.65% within the same time period. It declined from ₦63.41 billion in Q1 to ₦58.56 billion in Q2 2024.
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 of ₦14.56 trillion.
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 Q1 and Q2 2024.
The lowest output and new export order index were recorded in February and March. The index for both months stood at 37.2 on output and 38.1 on new export orders.
Nigeria’s Automobile Industry: Going in Reverse?
The real growth rate of the Motor vehicle and assembly sector contracted by 151% between Q1 and Q2 2024 according to the latest NBS GDP report.Although the real growth rate of motor vehicle and assembly declined, the purchase of new cars in Nigeria has been on the increase in the last six months.