Nigeria to record current account deficit of $9.1bn in 2021 – Report

Nigeria is expected to record a current account deficit of $9.1 billion in 2021, an improvement compared to $16.98 billion recorded in the previous year.

This is according to the 2021 Nigerian Banking Sector Report by Afrinvest.

The report, which is titled “Resilience Amidst Endemic and Pandemic Constraints” projected Nigeria’s current account deficit at $9.1 billion due to Nigeria’s huge importation bill, which is estimated at $5.6 billion monthly.

Recall that Nigeria’s current account deficit dropped to $424 million in second quarter of 2021, driven by a significant rise in crude oil exports of $11 billion.

According to data from the Central Bank of Nigeria, the nation’s current account deficit stood at $2.52 billion in the first half of 2021, largely affected by a huge gap recorded in the first quarter of 2021.

In 2020, Nigeria booked a Current Account (CA) deficit of US$17.0 billion, which translates to 4.2 percent of the 2020 nominal GDP of N154.0 billion.

The sharp jump in the Goods Trade account deficit was driven by a 44.1 percent y/y decline in earnings from crude oil exports to US$26.8 billion (2019: US$47.9 billion), while refined oil imports remained disproportionately high at US$52.3 billion, despite moderating 15.7 percent y/y.

However, the deficit on the Services Trade and Income accounts moderated to US$15.8 billion and US$5.8 billion respectively, relative to US$33.8 billion and US$12.5 billion in 2019.