Nwizu: Trade Surplus Will Booster Investors’ Confidence in Nigeria

Co Founder, Comercio Partners Limited, a Lagos based investment bank, Mr. Nnamdi Nwizu, has stated that a surge in Nigeria’s foreign trade surplus in the first quarter of this year will booster investors’ confidence in the nation’s economy.

Data from the National Bureau Statistics showed that the country recorded 602 per cent, year-on-year, YoY, increase in Foreign Trade Balance to    N6.52 trillion in Q1’24, up from N928 billion in Q1’23.

Exports, which accounted for 60.25% of the total trade rose to N19.17 trillion in Q1’24, representing a 195.47% year-on-year increase from Q1 2023. The rise in exports was driven by 200 per cent YoY increase in crude oil exports stood to   N15.47 trillion from 5.15 trillion in Q1’23.

“The increase in the trade surplus exceeded market expectations significantly”, Nwizu said in a Comercio Partners report reviewing the trade data, adding that the surge in the trade surplus indicates an improvement in the country’s ability to earn foreign currency and enhances its overall economic outlook. 

Nwizu however, stated that, “investors will be keenly awaiting a more detailed report on financial inflows and outflows, which will be provided in the Balance of Payments. This report includes not only current account transactions but also activities in the Capital and Financial accounts.”

Speaking on impact on the on the economy especially the local financial market, Nwizu said:  this positive trade data is expected to boost investor confidence in the Nigerian economy.

“The Nigerian financial market tends to be less responsive to data of this nature. Nevertheless, the positive trade data might stimulate activity in the Eurobond market, potentially leading to increased bids for Nigeria’s Eurodollar bonds and pushing yields lower.

“A more significant market reaction could occur if this positive trade data and other favourable economic developments prompt one of the three major credit rating agencies (S&P, Fitch, and Moody’s) to improve Nigeria’s credit outlook.”