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Analysts: Nigeria’s Import Bill Declining On Naira Depreciation - NEW TELEGRAPH
Analysts at FBNQuest Research have attributed the steady drop in Nigeria’s import bill in recent times to the depreciation of the naira.
The analysts stated this in a report which focused on the Central Bank of Nigeria’s (CBN) latest Quarterly Statistical Bulletin (QSB).
According to the analysts, the depreciation of the naira has made the prices of imported goods and services very expensive thus discouraging importers’ demand for such products.
The analysts said: “In its latest Quarterly Statistical Bulletin (QSB), the Central Bank of Nigeria (CBN) revealed that the total value of Nigeria’s merchandise trade declined by -10 per cent quarter-on-quarter (QoQ) and -11 per cent year-on-year (YoY) to $23.5 billion in Q2’24.
The trade figure comprises export and import trade positions of $13.9 billion and $9.5 billion, respectively. The external trade balance resulted in a higher trade net surplus of $4.4 billion compared with a net surplus of $2.2 billion in the previous quarter.
“Both export and import activities contributed to the q/q reduction in the overall value of Nigeria’s merchandise trade.
“However, the decline in import trade value was more significant, decreasing by -20 per cent QoQ. On the other hand, merchandise exports fell slightly by -2 per cent QoQ.”
They further stated: “Consistent with historical patterns, crude oil exports, which accounted for about 73 per cent of the total value of Nigeria’s merchandise exports, decreased by -8 per cent QoQ to $10.1 billion.
“In terms of non-oil exports, earnings from non-oil commodities declined by -1 per cent QoQ but increased by +4 per cent YoY to $1.8 billion.
“Turning to imports, the consistent reduction in Nigeria’s import bill can be attributed to the naira depreciation stemming from ongoing FX liquidity bottlenecks. This has led to higher pricing of imported items, thus discouraging importers’ demand for products.
