Weekly Economic and Financial Commentary – June 22, 2020
Preliminary estimates released the Central Bank of Nigeria last week showed the current deficit widened to $4.9 billion in Q1 2020 compared to $2.7 billion in Q1 2019. Decline in exports and remittances, more than outweighed moderation in imports services deficit (-2.3% YoY to $7.8 billion) and income deficits (-7.3% YoY to $2.8 billion), to account for the widening of the deficit. While import expenses fell 5.2% YoY to $13.8 billion, export earnings declined by 12% YoY $13.4 billion, resulting in a trade deficit of $440 million compared to a surplus of $634 million in Q1 19. Also, following the decline in remittances, the current transfer moderated 20% YoY to $6.1 billion. Overall, the current account (CA) deficit widened to 4.2% of nominal GDP in Q1 20, compared to 2.6% in Q1 19. Elsewhere, the financial account booked a negative net balance of $6.3 billion over Q1 20, from a positive net balance of $4.8 billion same period in the prior year. The negative balance over Q1 20 emanated largely from the exodus of portfolio investment over the period, with a negative net outflow of $8.3 billion compared to net inflow of $14.4 billion in Q1 19.
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