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Nigeria’s trade surplus, the difference between exports and imports, rose to N6.95 trillion in the second quarter of 2024, according to the latest foreign trade statistics report released by the National Bureau of Statistics (NBS) on Wednesday.

This shows a 33.63 percent increase from the N5.19 trillion recorded between January to March 2024, bringing the total value to N12.14 trillion in the first half of 2024.

This is, however, higher than N154.12 billion recorded in the first six months of 2023, the NBS data revealed.

The report showed that the country recorded a positive trade balance for the sixth straight quarter in Q2, signifying key economic development. A trade surplus occurs when a country’s exports exceed its imports.

Total merchandise trade in Africa’s most populous nation stood at N31.8 trillion in Q2, a decline of 3.76 percent compared to the preceding quarter and a 150.39 percent jump compared to a year ago.

“Exports accounted for 60.89 percent of total trade with a value of N19,418.93 trillion, showing a marginal increase of 1.31 percent compared to the value recorded in Q1 2024 (N19,167.36) and a 201.76 percent rise over the value recorded in the second quarter of 2023 (N6,435.13),” NBS said.

Analysts attribute the surge in exports to the exchange rate depreciation caused by the foreign exchange reform implemented last June.

Tobi Ehinmosan, a fixed income and macroeconomic analyst at the Lagos-based FBNQuest Capital, said the major factor for this significant trade surplus is the decline in import trade.

“No doubt, our export performance has been on the rise but then the main driver is the drop in import trade, especially from June 2023 when the exchange rate was floated,” he said.

“A reasonable explanation for the lower import figure is the challenges traders face in sourcing for FX,” Ehinmosan noted, adding that the scarcity of FX has led to lower import of commodities into the country.

Echoing the same sentiment, Michael Adeyemi, an economics lecturer, said the surplus suggests a reduction in imports, caused by such factors like currency devaluation or high import costs.

“A trade surplus strengthens the balance of payments, which can help stabilise Nigeria’s currency, the naira,” Adeyemi said.

“It also allows the country to build foreign reserves and pay off international debt obligations more comfortably,” the university lecturer explained.

The naira has tumbled by over 70 percent this year following a two-time devaluation last year. The official exchange rate increased from N463.38/$ on June 9, 2023, to N1.558.7/$ as of September 12, 2024. At the parallel market, the naira depreciated to over N1,600/$ from 762/$.

Recent data from the International Monetary Fund (IMF) highlighted that Nigeria’s current account balance, a measure of its net trade in goods, services, and transfers with the rest of the world, rose to $1.43 billion this year from $1.21 billion surplus in 2023.

“A growing current account surplus can be a sign of economic strength, indicating that the country’s industries are competitive internationally and that its exports are in demand,” Ibrahim Bakare, a professor of Economics said.

“It may also lead to an appreciation of the country’s currency, as increased demand for its goods and services boosts the value of its currency relative to others,” he added.

Exports in Q2 was dominated by crude oil valued at N14.5 trillion representing 74.98 percent of total exports while the value of non-crude oil exports rose to N4.8 trillion, accounting for 25.02 percent of total exports; of which non-oil products contributed N1.9 trillion or 10.01 percent of total exports.

On the other hand, the share of total imports declined by 10.71 percent in Q2 with the value of imports amounting to N12.4 trillion, but a rise of 97.93 percent from the value recorded in the corresponding quarter of 2023 (N6,301.95 trillion).

China ranked highest among the top trading partners on the import side in Q2, followed by Belgium, India, the United States of America, and The Netherlands.

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On the export side, the top trading partners with Nigeria were Spain, the United States of America, France, India, and The Netherlands.

The most traded commodities were Motor spirit ordinary, Gas oil, Durum wheat (Not in seeds), Butanes, Cane sugar meant for sugar refinery.