Nigeria's trade balance weakens as oil prices, currency controls bite

Nigerian exports plunged in the third quarter from a year ago and imports also fell, the national bureau of statistics (NBS) said, as currency controls introduced by the central bank this year to support the economy start to bite.
The balance of trade in the third quarter was 645 billion naira, down from 2.87 trillion naira in the third quarter a year ago ($14.42 billion - $3.24 billion).
Africa's biggest economy relies on oil exports for about 58 percent of government revenue. But the price of crude has been falling, reaching its lowest in more than six years last week.
Consequently, Nigeria faces its worst economic crisis in years, since exports of oil also bring in the hard currency that pays for imports. And because of its limited manufacturing, Nigeria imports most of what it consumes.
Nigeria's exports fell by 50.3 percent in the third quarter from a year ago and imports declined 7.3 percent, the NBS said. The fall in crude oil exports, which accounted for 69.1 percent of total domestic exports this year, hit the economy the most.
"The sharp decline in exports and slight decrease in imports contributed to a continued fall in the country's trade balance, by 32 percent," the NBS said in a report.
Crude exports fell 18.8 percent in the third quarter from the second. Imports dropped 1 percent from the second quarter, the NBS said.
Currency controls imposed by the central bank are one reason for the decline in imports. The bank was forced to devalue the naira in November as oil prices plummeted and pegged it to the dollar in February in a de facto devaluation.
In June, it curbed access to the interbank currency market for importers bringing in a variety of goods. In an effort to conserve its dollar reserves, the bank said that importers could no longer get hard currency to buy 41 items, ranging from toothpicks and rice to steel products and private jets.
The bulk of Nigeria's imports were food and beverages, along with machinery and appliances, vehicles and aircraft parts and petroleum products. They came mostly from China, United States, Belgium, the Netherlands and India. Intra African imports accounted for 3.9 percent of the total.
The United States and the European Union in November raised concerns at the World Trade Organization about Nigeria's curbs on access to foreign currency, a WTO official said.