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Nigeria’s Foreign Trade hits N9.18 trillion in Q3, as non-oil export rose by 374.5%

Nigeria’s foreign trade rose to N9.18 trillion in the Q3f 2019, up from N8.60 trillion recorded in the previous quarter. That is, the nation’s total foreign trade rose by 6.67% within the quarter, an increase of N582.3 billion.

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Nigeria’s total foreign trade (value of exports and imports) rose to N9.18 trillion in the third quarter (Q3) of 2019, up from N8.60 trillion recorded in the previous quarter (Q2).

According to the latest foreign trade report released by the National Bureau of Statistics (NBS), the total foreign trade increased by 6.67% within the quarter, a rise of N582.3 billion.

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Basic Highlights

Nigeria’s value of the export rose significantly more than import. According to the foreign trade report, export component stood at N5.28 trillion, a 15.02% increase when compared to N4.59 trillion in Q2 2019.

[READ: Korea expresses desire to deepen trade ties with Nigeria]

  • On the other hand, Nigeria’s total import in Q3 was valued at N3.89 trillion, a 2.70% drop against N4.01 trillion in Q2 2019.
  • According to the NBS report, the increase in exports coupled with the decrease in imports led to a positive trade balance of N1.38 trillion during the period under review.
  • Trade balance rose by 135.3% when compared to N590.4 billion recorded in Q2 2019.
  • A quick breakdown shows that Nigeria’s non-oil export rose faster than oil export within the period under review.
  • Specifically, non-oil export rose by 374.5% from N227.6 billion in Q2 to N1.08 trillion in Q3 2019.

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Export gains momentum as Agric. sector down again

Nigeria’s total export trade rose significantly in Q3 2019, the biggest in the year. According to the report, the value of total exports in Q3 2019 increased by 15.02% compared to the level recorded (8.97%) increase in Q3, 2018.

  • The value of total exports in Q3, 2019 stood at N5.28 trillion.
  • Crude oil export accounted for N3.74 trillion or 70.84% of total exports during the period under period. On the other hand, non-crude oil export grew significantly, valued at N1.54 trillion or 29.13% growth.
  • Further breakdown showed that the value of agricultural exports decreased by 42.69% in Q3 2019 relative to Q2.
  • Meanwhile, the value of manufactured goods exports increased by 839.44% in Q3, 2019 when compared with the value recorded in Q2. Specifically, the export of manufactured goods accounted for N996.8 billion.
  • The notable increase recorded in the export of manufactured goods was due to the re-exports of high-value cable sheaths of iron, as well as submersible drilling platform, Vessels and other floating structures.
  • Analysis of trade by region disclosed that Nigeria exported most products to Europe (N1.86 trillion or 35%), followed by Africa (N1.45 trillion or 27.6%), Asia (N1.36 trillion or 25.74%), America (N598.3billion or 11.3%) and Oceania (N8.1 billion or 0.1%).
  • Within Africa, exports to ECOWAS member states was worth N1.14 trillion, or 21.56% of total exports.
  • According to the Bureau, the value of exports to Africa and ECOWAS was notably high in Q3 2019 due to exports of Cable sheaths of iron and submersible drilling platforms exported to Ghana.

Import down by N108.2 billion in 3-month

Nigeria’s import dropped by N108.2 billion (2.70%) in the period under review, and this was largely driven by a fall in the importation of solid minerals and other oil products.

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  • The importation of solid minerals dropped by 31.73%, lower than the value in Q2, 2019.
  • The value of other oil products imported decreased by 41.85% in Q3, 2019 against the level recorded in Q2.
  • Meanwhile, the importation of manufactured goods grew by 12.46% in Q3 2019 against the value recorded in Q2 2019.
  • Importation of energy goods increased by 243.92% in Q3, 2019. This was due to the rise in import of other wood charcoal, electrical energy and charcoal of bamboo.
  • During the quarter, Nigeria imported goods mainly from Asia and valued at N1.99 trillion or 51.3% of total imports.
  • Other major imports originated from Europe, valued at N1.19 trillion or 30.6% while imports from the Americas and Africa amounted to N576.7 billion (14.8%) and N106.0 billion (2.7%).
  • Also, import from Oceania stood at N23.8 billion (0.6%) of total imports while goods valued at N19.1 billion originated from ECOWAS.

Implications for the Nigerian economy

The latest foreign trade report shows some positives as Nigeria’s trade balance rose a high N1.38 trillion. This means the country’s trade balance (export-import) rose by N582.3 billion, and this was largely triggered by a fall in imports.

  • When a country’s exports are greater than its imports, it has a trade surplus. This implies Nigeria’s trade surplus rose within the period and this is good for the economy.
  • Also, the export of manufactured goods rose significantly, and this drove the country’s non-oil exports. This suggests the country’s diversification agenda may be yielding some positive results.
  • However, despite the improvements in the country’s trade, agricultural exports suffered a major setback within the period.
  • In Q3 2019, Nigeria exported only N42.1 billion worth of agricultural export, the lowest since Q4 2017. This means the nation’s agricultural sector has continued to witness slow momentum for investors.
  • Also, despite the improvement in total trade, Nigeria is still largely an oil-dependent economy, as the country’s oil export constituted 70.87% of total export revenue in the period.

Patricia

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Financial Services

Zenith Bank and GTBank are considering paying interim dividends despite COVID-19

Analysts earlier predicted that banks may hold off on dividend payments as a way of cutting down on costs in view of COVID-19.

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Zenith Bank’s board of directors is set to meet on July 23rd, 2020 to consider the tier-1 bank’s audited financial statements for half-year 2020. The directors will also consider “the proposal for recommendation of interim dividend for shareholders,” said a notice that was sent by the company to the Nigerian Stock Exchange.

In a similar development, Guaranty Trust Bank Plc said in a statement to the NSE that “issues relating to half-year dividend may also be discussed” when its board of directors meet later this month.

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Zenith Bank and GTBank, which are two of the most profitable banks in Nigeria, have always paid interim dividends to their shareholders. However, analysts earlier predicted that many banks may hold off on dividend payments as a way of cutting down on costs, in view of COVID-19 and its attendant economic implications. It is, therefore, fascinating to see that Zenith Bank and GTBank are considering interim dividends nonetheless.

Elsewhere, banks around the world have either been warned not to pay dividends at all or to be careful with dividend payouts. In April, The Economic Times reported that the Reserve Bank of India advised Indian banks to suspend dividend payments in order to conserve their capital amid the pandemic. In a similar development, regulators in Europe also banned European banks from paying any dividend in 2020. In Australia, banks were advised to slash their dividend payouts. Meanwhile, over in North America, the US Federal Reserve announced in late June that it will temporarily restrict dividend payouts by some of the country’s biggest banks, the New York Times reported.

As Nairametrics had repeatedly reported, the COVID-19 pandemic is expected to adversely impact different sectors of the Nigerian economy, including the financial institutions. An earlier report by Nairametrics quoted Augusto & Co to have predicted how the pandemic would weaken Nigerian banks’ assets. An April report by PwC also highlighted some of the ways COVID-19 could impact Nigerian banks.

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In the meantime, the Banking Industry Risk Indicator (BIRI) in Nigeria stands at a score of 12.14 out of 100, according to a recent analysis by Fitch Solutions, as Nairametrics reported.


Do note that Zenith Bank Plc has declared a closed period for the trading in its stock starting from July 6th, 2020. The closed period will last until 24 hours after the company’s half-year 2020 financial report is released to the public. In the meantime, all persons with inside knowledge of Zenith Bank’s affairs shall be prohibited from buying and selling the company’s stock during the closed period. 

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Financial Services

GTBank declares closed period as directors meet July 22nd to consider H1 result

GTBank reported a net interest income of N64.28 billion in Q1 2020 as against N53.58 billion in Q1 2019.

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GTBank H1 2020 result

Guaranty Trust Bank Plc (GTBank) has declared a closed period ahead of the release of its audited half-year 2020 financial statements.

A corporate disclosure that was signed by the Company Secretary (Erhi Obebeduo) and sent to the Nigerian Stock Exchange said the closed period commenced on July 3rd, 2020. In line with the listing rules of the NSE, the closed period is expected to last until twenty-four hours after the bank’s financial statements have been released to the public.

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Note that the implication of the closed period is that all persons with insider knowledge of the company’s affairs are hereby prohibited from trading the company’s stock.

READ ALSO: Fidelity Bank announces closed period as it readies to release unaudited Q1 2020 result

Meanwhile, members of GTBank’s board of directors are scheduled to meet on July 22nd to consider the audited HI 2020 financial statements. A separate notice that was sent to the NSE said:

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“Pursuant to the post-listing requirements of the Nigerian Stock Exchange for quoted companies, Guaranty Trust Bank Plc hereby informs you that the board of directors of our bank is scheduled to meet on Wednesday, July 22, 2020, to consider the audited financial statement for the half-year ended June 30, 2020. Issues relating to half-year dividend may also be discussed at the meeting.”

The audited financial statements for half-year 2020 shall be sent to the Central Bank of Nigeria for approval prior to being made public through the Nigerian Stock Exchange.

READ ALSO: Analysis: GTB is minting profits but CBN is squeezing its cash.

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Recall that GTBank reported a net interest income of N64.28 billion in Q1 2020 as against N53.58 billion in Q1 2019. In the same vein, the tier-1 bank’s profit before tax grew by 2.1% to N58.2 billion, up from N57 billion in Q1 2019. Profit after tax also grew from N49.3 billion in Q1 2019 to N50 billion in Q1 2020.

GTBank closed last week’s trading on the Nigerian Stock Exchange with a share price of N20.80, according to trading reports seen by Nairametrics. Year to date, the stock has lost by more than -19%.

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Coronavirus

COVID-19: WHO stops hydroxychloroquine, HIV drugs trial after failure 

The WHO boss had earlier warned that the worst is yet to come from the coronavirus pandemic.

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Dr Tedros Adhanom, Head of the World health organization (WHO), COVID-19

The World Health Organization (WHO) has announced that it was going to abandon its trials of the malaria drug, hydroxychloroquine and combination of HIV drug, lopinavir/ritonavir on hospitalized patients that have coronavirus disease after they failed to reduce the death rate. 

This is a major setback for the WHO in the face of a second wave of the virus outbreak in US, China, Asia and some American countries. The United Nations (UN) health agency reported over 200,000 new cases of the disease globally, the first time in a single day. 

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According to a statement from the WHO, ‘’These interim trial results show that hydroxychloroquine and lopinavir/ritonavir produce little or no reduction in the mortality of hospitalized COVID-19 patients when compared to standard of care. Solidarity trial investigators will interrupt the trials with immediate effect.’’ 

READ ALSO: Nigeria’s ratings risk downgrade over rising debt and lower revenue

The WHO has hinged its decision on the recommendation of the trial’s international steering committee and does not affect other studies where those drugs are used for non-hospitalized patients. 

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Another aspect of the WHO-led trial is looking at the potential effect of Gilead’s antiviral drug remdesivir on COVID-19. The European Commission gave remdesivir a conditional approval for use on Friday after it was discovered that it helps reduce hospital recovery times. 

The trial which is led by WHO started with five branches looking at possible treatment approaches to coronavirus. They include, standard care, remdesivirhydroxychloroquinelopinavir/ritonavir, and lopanivir/ritonavir combined with interferon. 

The WHO Director-General, Tedros Adhanom Ghebreyesus, disclosed on Friday that almost 5,500 patients in 39 countries had been recruited into its clinical trials and that interim results were expected in the next two weeks. 

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There are about 18 experimental COVID-19 vaccines that are being tested on humans with almost 150 treatments under development. 

A top emergency expert from WHO, Mike Ryan, said it would not be wise to predict when a vaccine could be ready because while a vaccine candidate might show its effectiveness by the end of the year, the challenge might be how soon it could be mass-produced. 

READ MORE: Developing countries will pay less for COVID-19 drug – Gilead reveals 

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The WHO boss had a few days ago warned that the worst is yet to come from the coronavirus pandemic due to lack of global solidarity and the susceptibility of most people to the virus, which still has a lot of room to move. He stated that contact tracing of people that are infected with the virus is the most important step in fighting the coronavirus pandemic. 

The UN health agency had also revealed its plans with its partners to buy 2 billion doses of COVID-19 vaccines for the most vulnerable people across the globe. The plan projects that the doses of the COVID-19 vaccine will be distributed to countries with special priority on high-risk persons like people above 65 years, health care personnel and other adults with ailments like diabetes.  

 

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