Nigeria’s merchandise trade surged by 153% YoY to N65.03 trillion in Q1 2024, driven by a 199% rise in exports, leading to a significant trade surplus. The Nigerian stock market also gained 1.06%, buoyed by investor optimism, banking stocks, and macroeconomic trends.
Nigeria’s total merchandise trade surged by 153% YoY to N65.03 trillion in Q1 2024, driven by a 199% YoY increase in exports, particularly crude oil and non-oil products. Imports stood at N26.44 trillion, reflecting the depreciation of the naira, making imports more expensive and exports cheaper. This resulted in a trade balance surplus of N12.14 trillion, a 7,779% increase from H1 2023. The improvement in the trade balance is attributed to the strong growth in exports, which benefited from both the devaluation of the naira and an increase in exportable products.
In Q2 2024, total trade amounted to N31.89 trillion, a 150.4% YoY increase from Q1 2024. Exports accounted for 60.9%, valued at N19.42 trillion, with crude oil exports being the most significant. Imports accounted for 39.1% of total trade, amounting to N12.5 trillion. Nigeria’s exports were mainly mineral products, followed by prepared foodstuffs, beverages, spirits and vinegar, tobacco, and vegetables.
Exports of agricultural goods fell by 5.93% to N973.69 billion but remained at a 246.67% rise from Q2 2023. Imports of agricultural goods increased by 2.96% to N96.38%, while raw material imports grew slightly by 0.96% to N1.48 trillion. Exports of manufactured goods rose by 78.95% to N480.82 billion, while imports decreased by 2.82% to N5.57 trillion. Solid mineral exports also saw a significant increase.
Nigeria’s top export destinations in Q2 2024 were Spain, the United States, France, India, and the Netherlands, with the leading export commodities being crude oil, liquefied natural gas, petroleum gases, high-quality cocoa beans, and urea. China remained Nigeria’s largest trading partner, followed by Belgium, India, the United States, and the Netherlands.
The Stock Market
The Nigerian stock market experienced a positive performance this week, driven by investor optimism about macroeconomic developments, anticipated fiscal and monetary policies, and stronger corporate earnings from dividend-paying banking stocks. The NGX All-Share Index rose by 1.06%, reaching 97,456.62 points.
The benchmark index of the equities market also soared by 1.06%, crossing the 97,000 mark. The market cap of listed equities increased by 1.10% to N56 trillion, with investors seeing N607.8 billion in weekly gains.
Trading activities were positive, with 52 gainers and 31 decliners. The weekly average traded volume advanced by 20.7% to 2.58 billion, with a total value of N51.21 billion. Positive momentum across key sectors such as banking, consumer goods, and oil & gas contributed to the market’s gains.
The NGX-Banking index was the leading gainer, with a 5.12% week-on-week uptick. The NGX-Oil & Gas index saw 2.00% weekly gains, followed by NGX-Insurance, NGX-Consumer Goods, and NGX-Industrial Goods indexes reporting gains. Stocks like CAVERTON, RTBRISCOE, UPDC, FBNH, and ETRANZACT emerged as the top advancers.
Conclusion
It is believed that Nigeria’s expansion in total merchandise trade in Q2 2024 indicates strengthening trade relations with global partners. However, foreign exchange volatility and inflationary pressures in advanced economies will impact Nigeria’s trade sector. Economic diversification efforts may lead to improved export performance, sustaining positive trade balances and supporting the current account balance of payments.
The bourse is expected to react to changing fundamentals and technicals, with positive sentiment on portfolio rebalancing and position-taking in value-giving and fundamentally sound stocks.
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