By Obinna Chima in Lagos and James Emejo in Abuja

One of the biggest global rating agencies, Standards & Poor’s (S&P) has revised Nigeria’s sovereign credit outlook to negative, from the stable it was previously. Nigeria currently has a B+ rating by the agency.
It also emerged on the same day that the country’s total merchandise trade fell to N3.65 trillion in the fourth quarter of last year compared to N4.02 trillion in the previous quarter.
In a note yesterday, S&P stated that Nigeria’s foreign exchange policy was creating dislocations in product and financial markets. It stated that the negative outlook it assigned to Nigeria reflected the possibility of downgrade in coming 12 months, “if there is deterioration of Nigeria’s fiscal or external accounts.”
Furthermore, it stated that the decline in oil prices had continued to hurt the Nigerian economy.

It added: “Nigeria’s monetary policy has also weakened the country’s credit profile, in our view.”
The agency had last month stated that the Central Bank of Nigeria (CBN) would have to devalue the naira at some stage, possibly by more than 15 per cent this year.
S&P had however predicted that the currency adjustments were likely going to be gradual.
Director of Sovereign Ratings at Standard & Poor’s, Ravi Bhatia, said: “Another devaluation is inevitable… they will have no option but to devalue.”
But the Central Bank has maintained that its decision not to undertake a further devaluation of the naira was as a result of the need to safeguard the Nigerian economy from the shocks and negative impact this would have on the economy.
Foreign Trade Drops to N3.65tn in Q4 2015…
Meanwhile, Nigeria’s total merchandise trade reduced to N3.65 trillion in the fourth quarter of last year (Q4 2015) compared to N4.02 trillion in the previous quarter. This is according to the National Bureau of Statistics (NBS).
The country’s total trade value for 2015 stood at N16.42 trillion, which is N7.25 trillion or 30.6 percent less than the total trade value for 2014.



According to the Foreign Trade Statistics for Q4 2015 which was released yesterday, the statistical agency blamed the 9.2 per cent drop in foreign trade last quarter on the sharp decline in the value of exports which fell from N16,304.0 billion in 2014 to N9.72 trillion in 2015, representing a drop of 40.3 per cent.
Nevertheless, a decrease of N676.4 billion or 9.2 per cent in the total imports in 2015 helped to mitigate the declining trade balance, which stood at N3.03 trillion, less than the N5.89 trillion in 2014.

According to the NBS, the crude oil component of total trade decreased by N4.94 trillion or 41.6 percent in 2015 as against the level recorded in 2014.
Total value of imports in quarter under review stood at N1.57 trillion, representing 6.6 percent decline when compared with N1.68 trillion in Q3 2015.
Compared to the corresponding quarter of 2014, imports showed a decrease of N454.6 billion or 22.4 per cent.
According to the NBS, the structure of the country’s imports was dominated by the imports of machinery and transport equipment, mineral fuel, and food and live animals, which accounted for 32.4 per cent, 18.5 per cent, and 15.0 per cent respectively in 2015.
They further contributed the most to the value of import trade in 2015. Similarly, commodities including crude inedible materials, oils, fats and waxes as well as beverages & tobacco contributed the least, accounting for 1.6 per cent, 1.0 per cent, and 0.5 per cent respectively to imports.

On the other hand, the value of the country’s exports was N2.07 trillion in Q4, representing a decrease of N256.5 billion, or 11.0 per cent over the value recorded in the preceding quarter.
At the end of 2015, however, total exports from Nigeria stood at N9.72 trillion, representing a drop of N6.57 trillion or 40.3 per cent over levels recorded in 2014.
But despite a steep decline in crude oil exports by N4.94 trillion or 41.6 per cent in 2015, the structure of the country’s exports is still dominated by crude oil exports which contributed N6.94 trillion or 71.4 per cent to total value of domestic export trade in 2015.

rozayx5:

According to the NBS, the
structure of the country’s imports
was dominated by the imports of
machinery and transport equipment, mineral fuel, and food
and live animals, which accounted
for 32.4 per cent, 18.5 per cent,
and 15.0 per cent respectively in
2015.
They further contributed the most to the value of import trade in
2015. Similarly, commodities
including crude inedible materials,
oils, fats and waxes as well as
beverages & tobacco contributed
the least, accounting for 1.6 per cent, 1.0 per cent, and 0.5 per cent
respectively to imports.

Adesiji77:
This should be expected...