'Oil Curse’: Nigeria Has No viable Future As A Petrostate

 By Olu Fasan

The latest foreign trade data show that Nigeria recorded a trade balance of N6.52 trillion in the first quarter of this year, according to the National Bureau of Statistics, NBS. Expectedly, President Bola Tinubu seized on the figure as evidence that his economic reform is working. Given that the positive trade balance significantly reversed the negative balance of minus N1.4 trillion recorded in the fourth quarter of last year, one should cut Tinubu a slack. After all, a trade surplus, any trade surplus, is better than a trade deficit! 

However, dig deeper, there’s little to gloat about: for nothing has changed in the structure of Nigeria’s export trade. Crude oil exports, at N15.5 trillion, account for 80.8 per cent of the total exports. If you add other petroleum oil products, including natural gas, at N1.9 trillion or 9.92 per cent, oil and gas represent 91 per cent of Nigeria’s total exports. Thus, non-oil exports, at N1.8 trillion, account for a minuscule nine per cent of Nigeria’s total exports. Surely, then, Tinubu’s economic reform has done nothing to change the structure of Nigeria’s export trade, which remains almost totally dominated by crude oil and natural gas. 

How Much Is Nigeria’s External Reserve?

 By Marcel Okeke

The deafening silence of the Central Bank of Nigeria (CBN) since JP Morgan’s very shocking revelation a few weeks ago that Nigeria’s foreign exchange (FX) reserves stood at about US$3 billion as at end-December 2022 is really worrisome. 

According to the American financial services firm, a combination of foreign exchange forwards, securities lending, currency swaps, and outstanding contracts has weakened Nigeria’s net external reserves to an all-time low of US$3.7 billion as of the end of last year. Although data from the CBN had shown that Nigeria’s external reserves stood at US$33.88 billion as of August 10, 2023, down from US$37.08 billion at the end of last year, JP Morgan says the country’s “net forex reserves are significantly lower than previously estimated.”