Following the rally in crude oil market and improvement in diaspora remittances. Nigeria’s current account deficit had dropped to its lowest level in over two years in Q2 2021.

The current account balance stood at a deficit of $424 million in Q2 2021, representing a significant leap compared to a deficit of $2.1 billion in Q1 2021. Meanwhile, the positive movement at the time was attributed to the increase in crude oil export earnings.

Notably, crude oil export increased by 73% quarter-on-quarter in Q2 2021 from $6.48 billion to $11.22 billion. Compared to the corresponding period of 2020, crude oil export increased by 116.7% from $4.31 billion.

A positive current account or balance of payment is very much desired by any economy and is a welcomed development for the Nigerian economy, as it indicates a net inflow of foreign exchange into the economy.

Recall that Nigeria had been suffering from a forex crunch since the outbreak of the covid-19 pandemic, owing to crash in crude oil prices, halt in economic activities, downtrend in foreign capital inflows.

Balance of Payment (BOP) 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. It is ideal in measuring whether a country has a surplus or deficit of funds.