Nigeria’s current account balance rose to a 9-year high of $7.7 billion in the first half of 2022, five times higher than the $1.13 billion recorded in the second half of last year.
It is also significantly higher when compared to the negative balance of $2.98 billion recorded in the corresponding period of 2021.
This is according to data tracked by Nairalytics from the Central Bank of Nigeria. Nigeria’s current account also known as the balance of payment, is a statement that records all the monetary transactions made between residents of a country and the rest of the world during any given period.
Nigeria recorded a crude oil export of $27.8 billion in H1 2022, a 37.7% increase when compared to $20.16 billion recorded in the second half of 2021 and an 85.1% increase from $14.99 billion recorded in the corresponding period.
Nigeria’s earnings for electricity export also improved by 70.4% year-on-year to stand at $3963 billion from $2.31 billion recorded in H1 2021.
The significant improvement in Nigeria’s current account balance may be attributed to the favorable position in its international trade balance in the period due to the uptick in the crude oil export earnings largely driven by the rally in the crude oil market reported earlier in the year.
Naira has depreciated significantly at the parallel market year-to-date, hinging on increased demand for dollars and lack of supply, leading to a market disparity of over N300 between the official and black markets.
However, with the improvement in Nigeria’s current account balance occasioned by improved oil earnings, and an increase in remittance inflows, the apex bank could begin to find liquidity to continue to defend the local currency against volatility.
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