The performance of Nigeria’s external sector for 2013 has been described as impressive, evidenced by the higher current account surplus, increased home remittances and robust foreign reserves.
PANA reports that the External Sector Development Report, posted on the Central Bank of Nigeria (CBN) website, gave insights into the major developments in the external sector of the economy during the 4th quarter of 2013 relative to developments in 3rd quarter of 2013 and 4th quarter of the previous year.
”The exchange rate was relatively stable in all segments of the market. The stock of external debt rose to US$8.82 billion, but was within sustainable level, as Nigeria remained a low risk debt country.
“The Real Effective Exchange Rate (REER) index fell marginally to 72.95 from 73.55 in the preceding quarter, indicating an appreciation of the naira in real terms relative to the currencies of its major trading partners and, hence, a marginal loss of external competitiveness. This development was influenced by the relatively higher inflation rate in Nigeria compared to the rates in the trading partners,” it said.
The report added that at US$5.38 billion, the current account surplus was higher than the US$3.65 billion and US$4.93 billion recorded in the 3rd quarter of 2013 and 4th quarter of 2012, respectively.
The development was largely traceable to the lower investment income repatriations as well as improved financial inflows (home remittances) from Nigerians in Diaspora.
Furthermore, the report revealed that aggregate exports of goods declined by 3.6% and accounted for by the oil and gas component.
Non-oil exports increased by 21.3% in the 4th quarter of 2013 above the level in the 3rd quarter.
“The improved performance of the non-oil exports may not be unconnected with the current policy emphasis on the promotion of non-oil commodity exports, particularly output from commercial agriculture,” the report explained.
Similarly, aggregate imports declined by 7.2%.
Out-payments in the services account increased by 9.9% when compared with the level recorded in the 3rd quarter of 2013, while the deficit in the income account improved from US$6.96 billion in the 3rd quarter of 2013 to US$5.47 billion in the 4th quarter of 2013.
Current transfers surplus, which was driven largely by remittances from Nigerians in Diaspora, widened by 1.7% and 11.1% to US$6.06 billion in the 4th quarter of 2013 when compared with the respective levels recorded in the 4th quarter of 2012 and 3rd quarter of 2013.
Provisional data for 4th quarter of 2013 indicate that the value of external trade was US$36.10 billion, compared with US$37.98 billion and US$35.80 billion in the 3rd quarter of 2013 and 4th quarter of 2012, respectively.
Further analysis showed that the deficit in the services account (net) increased over its level in 3rd quarter of 2013 by 9.9 %.
The continued overwhelming performance of the exports over imports resulted in a trade balance of US$9.01 billion or 11.9% of Gross Domestic Product (GDP) in the 4th quarter of 2013, compared with US$8.80 billion and US$8.81 billion, respectively in the 3rd quarter of 2013 and 4th quarter of 2012.