The Organisation of Petroleum Exporting Countries (OPEC) announced that Nigeria’s oil exports increased by 60.8% in the third quarter of 2023.
“Throughout 3Q23, exports witnessed a remarkable 60.8% increase, and imports soared by 47.7%, culminating in a trade surplus of NGN1,888.92 billion in that period,” its Monthly Oil Report released Tuesday for February 2024.
It also revealed that exports rose by 115%, y-o-y, reaching an unprecedented high of NGN3,867 billion, while imports surged by 34.5% to NGN2,429 billion.
According to the report, ”Nigeria boasted a significant trade surplus of 1,438.4 billion naira (NGN), a strong rebound from the NGN7.2 billion deficit recorded in September 2022.”
”In late January, the naira exchange rate was devalued from NGN975/US$
to NGN1,414/US$. As a consequence, imported inflation may rise, although the weakened local currency could offer further support to non-oil exports.”
Nigeria’s current oil output is below the nation’s 2024 budget target of 1.78mbpd with the budget heavily dependent on proceeds from crude sales.
Nevertheless, there is significant uncertainty regarding the currency’s trajectory, given historical trends. Additionally, concerns persist regarding inflationary pressures in Nigeria, with the inflation rate reaching 28.9% in December, marking the highest level in 2023.
Meanwhile, growth in the private sector persisted, as Nigeria’s January Stanbic IBTC Bank Purchasing Managers’ Index (PMI) rose to 54.5 in January 2024, up from 52.7 in December 2023. This improvement in business conditions is attributed to an expansion in purchasing activities.
”Moreover, business confidence has improved compared to the previous month, with firms maintaining a positive outlook on output growth in the year ahead. Nigeria’s near-term downside risks may be driven by challenges in the power grid, an intensification of monetary tightening, exchange rate fluctuations, inflation volatility, and global geopolitical uncertainty.” the report also said.
On the part of the total crude production in the 12 OPEC states an average of 26.34mbpd was producedc last month, reducing by 350,000 bpd.
“According to secondary sources, total OPEC-12 crude oil production averaged 26.34 mb/d in January 2024, lower by 350 tb/d, month-on-month. Crude oil output increased mainly in the UAE, Saudi Arabia and Venezuela, while production in Libya, Kuwait, Iraq and Algeria decreased,” the report said.