Nigerian current-account deficit is 0.1% GDP in Q4 2014

The CBN’s External Sector Development Report for Q4 2014 shows a modest current-account deficit equivalent to 0.1% of GDP. This was to be expected, given that the international oil price fell by about US$25/b over the quarter in question. The report also revised earlier data, notably for Q2 for which a surplus representing 1.1% of GDP was transformed into a 0.4% deficit. The deterioration predates the latest slide in the oil price and can be traced to the stagnation in the petroleum industry. Oil exports accounted for just 14.0% of GDP in Q4, compared with a recent peak of 25.0% in Q1/12.

Likewise, the quarterly Economic Report puts non-oil exports provisionally at US$2.57bn (N440bn) in Q4 2014. This marks an increase of 67% from the level recorded in the corresponding period in 2013. For the full year (2013) the CBN shows cocoa beans earning N151bn out of total non-oil merchandise exports of N709bn, and cocoa products a further N30bn. The drop in oil prices has reinforced the need to diversify the economy, which would inherently increase non-oil exports. The medium–term goal should be to shift the focus from raw agricultural commodities to processed agro-industrial goods. This is set to be boosted by a US$3m product development fund established by the United States Agency for International Development (USAID).

Based on information from the federal ministry of trade and investment, the FGN targets an increase in non-oil exports to fellow ECOWAS member states to US$705m this year from US$375m recorded in 2013. The implementation of the ECOWAS Common External Tariff (singular tax regime) 2015-2019 took effect on 11 April. Potential benefits include promoting regional trade and therefore non-oil export revenue and enhanced national productivity.