Nigeria Records $2.8m Balance of Payment Surplus

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Obinna Chima

Nigeria’s provisional Balance of Payments (BOP) estimates for the fourth quarter (Q4 2018) showed a significant improvement as it recorded a surplus of $2.80 million, compared to the huge deficit of $4.542 billion recorded the preceding quarter, according to a report by the Central Bank of Nigeria (CBN).

It had also recorded a surplus of $6.180 billion in the corresponding period of 2017.
The apex bank disclosed this in its “Brief on Balance of Payments Statistics for Fourth Quarter 2018,” released yesterday.
A balance of payments surplus meant that Nigeria exported more than it imported during the period under review.
Continuing, the report also showed that the country’s current account balance (CAB) improved from a deficit of $1.544 billion in Q3 2018, to a surplus of $1.104 billion in period under review.

The financial account balance indicated a net acquisition of financial assets of $2.328 billion in the review period as against a net incurrence of financial liabilities of $4.615 billion recorded in the preceding period.

Also, the current account indicated a positive outcome during the review period, recording a surplus of $1.104 billion as against a deficit of $1.544 billion and a surplus of $3.657 billion in the previous quarter and corresponding period of 2017, respectively.
This development was largely attributable to the decrease in imports and payments on income (net).

In addition, the CBN report showed that the surplus in the Goods Account increased significantly to $6.794 billion in Q4 2018, from surpluses of $3.760 billion in the preceding quarter and $5.473 billion recorded in the corresponding period of 2017.

The report added that Nigeria’s export earnings rose by 2.8 per cent to $16.655 billion in Q4 2018, when compared with Q3 2018, just as it also indicated an increase of about 27.6 per cent when compared to corresponding period of 2017.
Earnings from crude oil and gas, which accounted for 93.8 per cent of total export earnings during the review period, increased by 2.1 per cent to $15.621 billion in Q4 2018, compared with the preceding quarter.

Available data showed that payments for import of goods (fob) to the economy in the review period decreased significantly by 20.7 per cent to $9.862 billion below the level recorded in the preceding quarter. This was largely as a result of 19.9 per cent decrease in the imports of non-oil products.

Furthermore, it disclosed that net out-payments for services during the review period increased by 16.5 per cent to a deficit of $8.287 billion, compared with the level recorded in Q3 2018. When compared with the corresponding period of 2017, it indicated a much higher increase of about 76.9 per cent.
However, the deficit in the income account (net) decreased by 10.8 per cent to $3.714 billion in the review period, from a deficit of $4.162 billion recorded in the preceding quarter.

When compared with the level in the corresponding period of 2017 it indicated an increase of about 24.5 per cent.
The surplus in the current transfers (net) increased by 5.7 per cent to $6.312 billion in Q4 2018, when compared with the preceding quarter. However, the level of surplus was 7.8 per cent higher than the level recorded in the corresponding period of 2017.

“Provisional Q4 2018 BOP estimates for the Financial Account showed an overturn from a net incurrence of financial liabilities of US$4,615.17 million recorded in Q3 2018 to a net acquisition of financial assets of US$2327.91 million in the review period.

“This is also significantly lower than the net acquisition of financial assets of $3,528.62 million recorded in the corresponding period of 2017.
“Direct Investments inflow decreased by 28.3 per cent to $314.44 million when compared with the preceding quarter of 2018. It however, indicated a decline of 67.2 per cent when compared to the corresponding period of 2017.
“Portfolio Investments inflow to the economy decreased significantly to $1,382.40 million in Q4 2018 from $1,790.83 million and $3,787.16 million in the preceding quarter and the corresponding period of 2017, respectively,” it added.