Nigeria’s provisional Balance of Payments estimates for Q3, 2018, showed a significant turnaround in the country’s position as the overall balance of payments swung into a deficit of $4.54bn compared to surpluses of $503m and $2.78bn recorded in the preceding quarter and the corresponding period of 2017, respectively.
The BOP is a summary of all monetary transactions between a country and rest of the world. These transactions are made by individuals, firms and government bodies.
According to the third quarter 2018 brief on balance of payment statistics released by the Central Bank of Nigeria on Friday, the Current Account Balance also worsened from a surplus of $4.45bn in Q2, 2018 to a deficit of $3.1bn in Q3 2018.
The financial account balance indicated an increased net incurrence of financial liabilities of $10.72bn in the review period as against $2.57bn recorded in the preceding period.
It noted that the current account indicated a negative outcome during the review period, recording a deficit of $3.10bn as against surpluses of $4.45bn and $1.97bn in the previous quarter and the corresponding period of 2017, respectively.
This development was largely attributable to the increased payments for imports.
Export earnings rose by 2.8 per cent to $16.21bn in Q3, 2018 when compared with Q2, 2018.
The report also indicated an increase of about 35.3 per cent when compared to the corresponding period of 2017.
Earnings from crude oil and gas, which accounted for 94.4 per cent of total export earnings during the review period, increased by 9.5 per cent to $15.301bn in Q3, 2018, when compared with the preceding quarter.
Earnings from non-oil and electricity exports decreased by 49.3 per cent to $909m in Q3, 2018 when compared with the preceding quarter.
Available data showed that payments for the import of goods (fob) to the economy in the review period increased by 70.5 per cent to $14.085bn above the level recorded in the preceding quarter.
This was largely as a result of 79.7 per cent increase in the imports of non-oil products.
Direct Investments inflow increased by 0.7 per cent to $438.84m when compared with the preceding quarter of 2018.
It, however, indicated a decline of 45.0 per cent when compared to the corresponding period of 2017.
Portfolio investments inflow to the economy decreased significantly to $1.79bn in Q3, 2018 from $4.233bn and $3.320bn in the preceding quarter and the corresponding period of 2017, respectively.
However, other investment liabilities increased slightly to $4.28bn when compared with $3.226bn recorded in the preceding quarter.
The stock of external reserves as of the end of September 2018 stood at $42.60bn indicating a depletion of 9.6 per cent when compared with the level in the preceding quarter.
However, when compared with the corresponding period of 2017, it indicated an accretion of 28.5 per cent.
The level of external reserves could finance approximately 9.1 months of imports, compared with 17.1 and 11.6 months of imports cover recorded in the preceding quarter and the corresponding period of 2017 respectively.