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Nigeria’s external position improves as current account posts $3.3bn

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Nigeria’s external position improved for the second consecutive quarter with the current account posting a $3.3billion (4.0% of GDP) surplus in third quarter (Q3) 2023 compared to the $810.0million (0.8% of GDP) in Q2. Experts at Afrinvest (West) Africa attributed the surplus to increased export earnings and lower import bills. Specifically, export earnings increased 7.0percent quarter on quarter (q/q) to $13.7billion on account of increased oil revenue (oil price and production up 12.2% and 5.3% respectively) while import bills fell 16.7percent q/q to $10.5billion due to lower importation of oil and non-oil products.

“From our analysis of imports by sector, we observed that raw materials and machinery accounted for the largest share (63.6%), followed by manufactured products (12.0%), food products (10.0%), petroleum products (6.2%), transport (3.8%), agricultural products (2.2%), and minerals (2.1%).

“Notably, our analysis of services showed that the total payments rose to $4.5billion from $4.3billion in Q2 due to higher payments for travel (52.2%), financial (89.9%), and government goods and services (62.2%), further widening the deficit in the services account to $3.3billion, from $3.2billion in Q2, “ the experts noted.

Looking ahead, there are expectations that the current account would sustain its surplus position in Q4:2023 and 2023 overall on the back of improved oil prices, increased oil production, reduced imports, and resilient remittances.

 

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