Loss of momentum in trade growth extends into Q4

…Non-oil exporters project 2019 for recovery in Nigeria

Trade growth is likely to slow further into the fourth quarter of 2018 according to the WTO’s latest World Trade Outlook Indicator (WTOI) released on Monday.

The most recent WTOI reading of 98.6 is the lowest since October 2016, and reflects declines in all component indices. It is below the previous value of 100.3 and falls under the baseline value of 100 for the index, signalling that trade growth in the coming months is expected to be below-trend.

The latest results are consistent with the WTO’s downgraded outlook for global trade issued in September amid escalating trade tensions and tighter credit conditions in important markets. The revised forecast anticipated trade expansion to slow to 3.9% in 2018 and 3.7% in 2019 from 4.7% in 2017.

For Nigeria, non-oil exporters who spoke with The Guardian had expressed pessimism about the potential earnings of the country in the third and fourth quarter, of the year, citing challenges in the area of infrastructure, especially as it relates to access to the nation’s ports.

According to them, the adverse travel time, waiting time and transaction time have led to the waste of agricultural commodities and economic loss.The continued moderation in the overall WTOI index was driven by the steady decline in the export orders index (96.6), which remains below trend and is approaching the weakest point recorded in 2012 during the eurozone crisis.

The Lead Consultant, 3T Impex Consulting Limited and LCCI Export Group Chairman, Bamidele Ayemibo, regretted that non-oil export challenges became intensified since the beginning of the year.He said: “Countries considered great are mainly non-oil export-oriented. It is interesting to note that while other countries are taking this seriously, Nigeria is not. Every policy is geared to support import, but that which is supposed to support export is either on paper and never implemented or partially implemented. It is a sad one.”

He said, typically, exports volumes rise in Q1 and Q4 and that is because the operators deal in agro-based products, in which Q3 and Q4 are peak periods.On the estimated time of recovery of the non-oil export sector,Manufacturers Association of Nigeria Export Promotion Group (MANEG)

Chairman, Chief Ede Dafinone said while the significant damage to non-oil export was done in 2015 and 2016, when access to foreign exchange was difficult for the manufacturing sector, as well as the suspension of the EEG, recovery is happening slowly and may not be fully realised until 2019.

Indices for automobile production and sales (96.9), electronic components (93.9), and agricultural raw materials (97.2) have meanwhile moved from on trend to below trend. International air freight (100.0) and container port throughput (101.2) have dipped but remain on trend.