ECONOMIC REPORT
FIRST QUARTER 2018


CENTRAL BANK OF NIGERIA


C e n t r a l B a n k o f N i g e r i a
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Economic Report First Quarter

The Central Bank of Nigeria Quarterly Economic Report is designed for the dissemination
of financial and economic information on the Nigerian economy on current basis. The
Report analyses developments in the financial, fiscal, real and external sectors of the
economy, as well as international economic issues of interest. The Report is directed at
a wide spectrum of readers including economists and financial analysts in government
and the private sector, as well as general readers.


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The Quarterly Reports can also be freely downloaded from the CBN website: www.cbn.gov.ng


C e n t r a l B a n k o f N i g e r i a
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Economic Report First Quarter

Contents


C e n t r a l B a n k o f N i g e r i a
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Economic Report First Quarter


Text Tables

Appendix Tables


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Economic Report First Quarter

Figures


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Economic Report First Quarter

C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

1.0 Summary1
The CBN maintained its non-expansionary monetary policy stance in
the first quarter of 2018, aimed at curbing inflationary pressure. Broad
money supply, (M2) rose marginally by 0.1 per cent to N24,019.09
billion , above the level at end-December 2017, mainly, on account
of the growth in net domestic credit of the banking system. Narrow
money supply (M1), however, fell by 2.8 per cent, below its level at
end-December 2017, due to decline in its currency and demand
deposit components.
Developments in banks’ deposit and lending rates were mixed in the
review quarter. With the exception of the 7-day and 1-month
deposit rates, which fell to 4.18 and 8.99 per cent, respectively,
below the levels at end-December 2017, all other rates of various
maturities, rose from a range of 7.34 – 11.23 per cent to a range of
8.40 – 11.51 per cent at end-March 2018. The average term deposit
rate rose by 0.24 percentage point to 9.06 per cent, while the
average savings rate fell by 0.01 percentage point to 4.07 per cent
at end-March 2018. The average maximum lending rate rose by 0.28
percentage point to 31.39 per cent, while the average prime
lending rate fell by 0.27 percentage point to 17.51 per cent at endMarch 2018. Consequently, the spread between the weighted
average term deposit and maximum lending rates widened by 0.04
percentage point to 22.33 percentage points at end-March 2018.
Similarly, the margin between the average savings and the
maximum lending rates widened by 0.65 percentage point to 27.21
percentage points. The weighted average inter-bank call rate fell by
5.04 percentage points to 18.98 per cent at end-March 2018.
The total value of money market assets outstanding declined by 0.2
per cent below the level at end-December 2017, to N12,094.97
billion, at end-March 2018. The development was attributed to the
fall in commercial paper and FGN Bonds outstanding in the review
quarter. Developments on the Nigerian Stock Exchange (NSE) were
mixed.
Federally-collected revenue, at N2,097.13 billion in the first quarter of
2018, was 21.9 per cent lower than the proportionate budget
estimate, but was 4.4 per cent above the receipts in the preceding
quarter. The development was due to the shortfall in both oil and
non-oil revenue in the review quarter. Federal Government
estimated retained revenue and total expenditure were N846.55
billion and N1,573.03 billion, respectively, resulting in an estimated

1 Data on monetary aggregates, government spending and foreign
exchange flows are provisional and subject to changes


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

deficit of N726.48 billion in the first quarter of 2018.
Agricultural activities in the fIrst quarter of 2018 were dominated by
preparations for the rainy season farming. In the livestock sub-sector,
farmers were engaged in activities to boost sales during the Easter
celebration. The end-period inflation, on year-on-year and 12-month
moving average basis for the review quarter were 13.34 and 15.60
per cent, respectively, in the first quarter of 2018.
World crude oil demand and supply were estimated at 97.27 mbd
and 98.0 mbd, respectively, in the first quarter of 2018. Nigeria’s
crude oil production, including condensates and natural gas liquids,
was estimated at an average of 1.95 million barrels per day (mbd)
or 175.5 million barrels (mb) in the review quarter. The average price
of Nigeria’s reference crude, the Bonny Light (370 API), was US$68.5
per barrel, compared with US$62.48 per barrel in the fourth quarter
of 2017.
Foreign exchange inflow and outflow through the CBN amounted to
US$16.19 billion and US$8.83 billion, respectively, resulting in a net
inflow of US$7.36 billion. Foreign exchange sales by the CBN to the
authorised dealers amounted to US$10.85 billion. The average
exchange rate of the naira vis-à-vis the US dollar appreciated in all
the segments of the market to N360.38/US$, N305.81/US$ and
N362.63/US$ at the investors’ and exporters’ window, inter-bank and
BDC segments, respectively, at end-March 2018. The external
reserves increased by 19.1 per cent to US$46.87 billion at the end of
the first quarter of 2018.
Major international developments of importance to the domestic
economy in the review quarter included: The 5th Meeting of the
Presidential Task Force on the ECOWAS Single Currency Programme,
held in Accra, Ghana from February 17 -21, 2018; the 36th Meeting of
the Committee of Governors of the West African Monetary Zone
(WAMZ) held at Kairaba Beach Hotel, Banjul, The Gambia, on
February 8, 2018; the 34th Meeting of the Board of Governors of the
West African Institute for Financial and Economic Management
(WAIFEM) held at the Kairaba Beach Hotel, Banjul, The Gambia on
February 8, 2018; the 51st Ordinary Meeting of the Committee of
Governors (COG) of Central Banks of ECOWAS Member States held
at Kairaba Beach Hotel, Banjul, The Gambia on February 9, 2018;
and the 39th Meeting of the Convergence Council of Ministers and
Governors of the Central Banks of the West African Monetary Zone
(WAMZ) held at the Kairaba Beach Hotel, Banjul, The Gambia, on
February 9, 2018.


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Economic Report First Quarter

2.0 Financial Sector Developments2
Over the level at end-December 2017, broad money supply (M2),
grew by 0.1 per cent, at end-February 2018, reflecting, wholly, the
rise in net domestic credit of the banking system. Narrow money
supply (M1), however, fell by 2.8 per cent, below the level at the end
of the fourth quarter of 2017. Developments in banks’ deposit and
lending rates were mixed in the review quarter. The value of money
market assets outstanding fell, while activities on the Nigerian Stock
Exchange (NSE) showed mixed developments in the review quarter.
2.1 Monetary and Credit Developments

Provisional data indicated that growth in money supply was
moderate in the review quarter. Over the level at endDecember 2017, broad money supply (M2) rose by 0.1 per
cent to N24,019.09 billion at end-February 2018, in contrast to
the decline of 5.9 per cent, at the end of the corresponding
period of 2017. The development, relative to end-December
2017, was attributed, wholly, to the 4.1 per cent growth in net
domestic credit, which more than offset the 2.8 per cent and
3.7 per cent fall in net foreign asset and other asset (net) of
the banking system, respectively.
Currency outside banks and demand deposit fell by 11.9 per
cent and 1.0 per cent, respectively, below their levels at endDecember 2017, reflecting the increased use of alternative
means of payment. Consequently, narrow money (M1) fell by
2.8 per cent to N10,730.86 billion, at end-February 2018, below
its level at end-December 2017, compared with a decline of
10.8 per cent at the end of the corresponding period of 2017.
Following sustained stability in the foreign exchange rate, due
to improvement in foreign exchange supply, foreign currency
deposit in banks rose by 3.4 per cent over the level at endDecember 2017. Thus, quasi-money increased by 2.5 per cent
to N13,288.23 billion over the level at end-December 2017, in
contrast to the decline of 1.4 per cent, at the end of the
corresponding period of 2017 (Figure 1, Table 1).

2 All monetary aggregate numbers are provisional and subject to revision
Grwoth in key
monetary aggregates
were moderate in Q1
2018.


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Economic Report First Quarter

Figure 1: Growth Rate of Narrow Money (M1) and Broad Money (M2)3

Source: CBN
Aggregate credit (net) to the economy, which stood at
N26,909.60 billion at end-February 2018, rose by 4.1 per cent,
over the level at end-December 2017, compared with the
growth of 1.3 per cent at the end of the corresponding period
of 2017. The development reflected the rise in claims on the
Federal Government and credit to the private sector, relative
to the levels at end-December 2017.
Relative to the level at end-December 2017, net claims on the
Federal Government rose by 20.0 per cent to N4,288.31 billion
at end-February 2018, compared with 2.1 per cent increase at
the
end
of
the
corresponding
period
of
2017.
The
development reflected, the rise in the banking system’s
holding of government securities.
Over the level at end-December 2017, banking system’s credit
to the private sector rose by 1.5 per cent to N22,621.28 billion
at end-February 2018, compared with the growth of 1.1 per
cent at the end of the corresponding period of 2017. The
growth in credit was due to rise in claims on the core private
sector and, the state and local government (Figure 2,Table 1).

3 QM1 and QM2 represent quarter-on-quarter changes, while CM1 and CM2 represent
cumulative changes (year-to-date).

-15
-10
-5

-15
-10
-5

Q1-16
Q2-16
Q3-16
Q4-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Feb -18
Quarterly (%)
Cumulative (%)
QM1 (RHS)
QM2 (RHS)
CM1 (LHS)
CM2 (LHS)
Banking system’s
credit to the Federal
Government rose in
Q1 2018


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Economic Report First Quarter

Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy4

Source: CBN
Foreign assets (net) of the banking system, at N14,396.25
billion, declined by 2.8 per cent below the level at endDecember 2017, compared with the 12.8 per cent fall at the
end of the corresponding period of 2017. The development
reflected the respective contractions of 2.2 per cent and 26.0
per cent in the foreign asset holdings of both the CBN and
banks.
Relative to the level at end-December 2017, other assets (net)
of the banking system fell by 3.7 per cent, to negative
N17,286.75 billion, compared with the decline of 4.5 per cent,
at the end of the corresponding period of 2017.
Table 1: Growth in Monetary and Credit Aggregates (Per cent) Over
Preceding Quarter
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Feb-18
Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Foreign Assets (Net)

Other Assets (Net)

Broad Money Supply (M2)

Quasi-Money

Narrow Money Supply (M1)

Memorandum Items:
Reserve Money (RM)

Source: CBN
*figures are provisional

4 QCP, QCG and QAC represent quarter-on-quarter changes in credit to private sector, credit to
government (net) and aggregate credit (net) to the domestic economy, respectively, while CCP, CCG


-30
-20
-10

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Feb-18
Quarterly (%)
Cumulative (%)
QCP (RHS)
QCG (RHS)
QAC (RHS)
Foreign assets (net) of
the banking system
fell at the end of the
review quarter.


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Economic Report First Quarter

2.2
Currency-in-circulation and Deposits at the
CBN

At N1,937.34 billion, currency-in-circulation (CIC), at endFebruary 2018, indicated a decline of 10.2 per cent,
compared with the 9.2 per cent fall at the end of the
corresponding period of 2017. The development reflected,
mainly, the fall in its currency outside banks component.

Total deposits at the CBN amounted to N12,814.89 billion at
end-February 2018, indicating a 2.7 per cent decline below
the level at end-December 2017. The development was as a
result of the fall in the deposits of the private sector and
Federal Government. Of the total deposits at the CBN, the
shares of the Federal Government, Banks and Private sector
deposits were N5,756.75 billion (44.9 per cent), N4,510.65
billion (35.2 per cent) and N2,547.49 billion (19.9 per cent),
respectively.
Reserve money fell by 0.5 per cent to N6,447.99 billion at endFebruary 2018, compared with decline of 5.0 per cent at the
end of the corresponding period of 2017. The development
reflected decline in currency-in-circulation and bank reserves,
due to increased use of electronic payment channels during
the review period.
2.3
Money Market Developments
Trends in the liquidity conditions of the market were mixed in
the first quarter of 2018. Liquidity was buoyed by inflow from
fiscal injections and maturing bills, while withdrawals arising
from open market operations moderated the liquidity level.
Moreover, settlements for the sale of government securities
and foreign exchange, also impacted on market liquidity.
Consequently, there was relative stabllity in the money
market, as rates moved in tandem with the liquidity condition
in the review period.
Total value of money market assets outstanding at the end of
the first quarter of 2018 was N12,094.97 billion, showing a
decline of 0.2 per cent, in contrast to 0.8 per cent increase, at
the end of the fourth quarter of 2017. The development was
attributed to fall in the FGN Bonds and commercial paper
outstanding during the review quarter.
The financial
market was
relatively
stable during
the review
period .
Reserve
money (RM)
fell at the end
of the review
period.


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Economic Report First Quarter

2.3.1
Interest Rate Developments
Developments in banks’ deposit and lending rates were mixed
in the first quarter of 2018. The 7-day and 1- month maturity
deposit rates fell from 4.55 and 9.12 per cent at endDecember 2017 to 4.18 and 8.99 per cent, respectively, at
end-March 2018. All other rates of various maturities, however,
rose from a range of 7.34 – 11.23 per cent at end-December
2017 to a range 8.40 – 11.51 per cent at end-March 2018. The
average term deposit rate rose by 0.24 percentage point to
9.06 per cent, while the average savings rate fell marginally
by 0.01 percentage point to 4.07 per cent at the end of the
review quarter.
The average prime lending rate declined by 0.27 percentage
point to 17.51 per cent, while the average maximum lending
rate rose by 0.28 percentage point to 31.39 per cent at endMarch 2018. Consequently, the spread between the weighted
average term deposit and maximum lending rates widened
by 0.04 percentage point to 22.33 percentage points at the
end of the review quarter. Similarly, the margin between the
average savings and the maximum lending rates widened by
0.76 percentage point to 27.32 percentage points at endMarch 2018. With inflation at 13.34 per cent in the review
period, all deposit rates were negative in real terms, while
lending rates were positive in real terms.
At the inter-bank funds segment, the weighted average interbank call rate, which stood at 24.02 per cent at endDecember 2017, fell by 5.04 percentage points to 18.98 per
cent at end-March 2018. Similarly, the Nigeria inter-bank
offered rate (NIBOR) for the 30-day tenor fell from 19.53 per
cent in the preceding quarter to 15.19 per cent at end-March
2018. Also, the weighted average rate at the Open-Buy-Back
(OBB) segment fell by 9.08 percentage points to 14.43 per
cent (Figure 3, Table 2).
Inter-bank call
rate fell in
Q1 2018.
Banks’ deposit and
lending rates
showed mixed
developments in
the first quarter of
2018.


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Economic Report First Quarter

Figure 3: Selected DMBs Interest Rates (Average)

Source: CBN
Table 2: Selected Interest Rates (Percent, Averages)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Average Term Deposits

Prime Lending

Interbank

Maximum Lending

Source: CBN
2.3.2
Commercial Paper (CP)
Commercial Paper (CP) outstanding held by banks amounted
to N1.64 billion in the first quarter, compared with N0.49 billion
at end-December 2017. The development was due to the
increase in investment in CP by the merchant banks during
the review quarter. Thus, CP constituted 0.01 per cent of the
total value of money market assets outstanding during the
review period, compared with 0.004 per cent in the preceding
quarter.

2.3.3
Bankers’ Acceptances (BAs)
Bankers’ Acceptances (BAs) outstanding stood at N11.57
billion in the first quarter of 2018, compared with N26.43 billion
at the end of the fourth quarter of 2017. The development was
attributed to fall in investment in BAs by commercial banks
during the review period. Consequently, BAs accounted for
0.1 per cent of the total value of money market assets
outstanding at end-March 2018, compared with 0.2 per cent
at the end of the preceding quarter.

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Percent per Annum
Percent per Annum
Prime
Interbank
Maximum
Average Term Deposits (RHS)
banks’ holdings
of BAs
decreased in Q1
of 2018.


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Economic Report First Quarter

2.3.4 Open Market Operations
The Bank intervened through direct Open Market Operations
(OMO) auctions conducted during the review quarter. The
tenors to maturity of the instruments ranged from 73 days to
266 days from January to March 2018. Total amount offered,
subscribed to and allotted were N7,180.00 billion, N4,508.62
billion, and N4,396.72 billion, respectively. The bid rates ranged
from 12.5000 per cent to 14.5500 per cent, while the stop rates
ranged from 12.6000 per cent to 14.5500 per cent. Repayment
of matured CBN bills was N2,090.45 billion, translating to net
withdrawal of N2,306.27 billion.
2.3.5
Primary Market
At the Government securities market, NTBs and long-term
(FGN Bonds) debt instruments were issued at the primary
market on behalf of the Debt Management Office (DMO).
NTBs of 91- 182- and 364-day tenors, amounting to N1,099.94
billion, N2,060.90 billion and N1,099.94 billion were offered,
subscribed to and allotted, respectively, at the auctions held
in the first quarter of 2018.
2.3.6
Bonds Market
Tranches of the 5- 7- and 10-year FGN Bonds were offered for
sale in the first quarter of 2018. The term to maturity of the
bonds ranged from 3 years 4 months to 9 years 11 months.
Total amount offered, subscribed to and allotted were
N280.00 billion, N410.40 billion and N253.68 billion, respectively.
There was no maturity and repayment in the review period.
Also, there was no allotment on non-competitive basis. The bid
rate on all tenors ranged from 12.5000 to 16.0000 per cent,
while the marginal rates were from 13.3800 to 13.9800 per
cent. The bid to cover ratio was 1.62, while the auction was
oversubscribed by 46.6 per cent.
2.3.7
CBN Standing Facilities
The banks continued to access the CBN’s Standing Facilities
window to square up their positions either by borrowing from
the standing lending facility (SLF) window or depositing excess
reserves at the standing deposit facility (SDF) window of the
CBN at the end of each business day. Total request for the
Standing Lending Facility (SLF) granted during the review
quarter reduced significantly to N2,586.66 billion (inclusive of
N646.49 billion direct SLF and N1,940.18 billion Intra-day
Subscription for
FGN Bonds of
various maturities
were reopened in
the Q1 of 2018.


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Economic Report First Quarter

lending facility (ILF) converted to overnight repo). Daily
average was N43.11 billion in the 60 transaction days from
January 1 to March 26, 2018. Daily request ranged from N15.50
billion to N100.17 billion. Total interest earned during the period
was N1.92 billion.
Total standing deposit facility (SDF) granted during the review
period was N4,313.60 billion, with daily average of N73.11
billion in the 59 transaction days in the period from January 1-
March 26, 2018. Daily request ranged from N0.30 billion to
N156.50 billion. Cost incurred on SDF in the month amounted
to N1.45 billion.
2.4
Deposit Money Banks’ Activities
The total assets and liabilities of the commercial banks stood
at N35,560.32 billion at end-February 2018, representing 2.8 per
cent increase above the level at the end of the fourth quarter
of 2017. The funds were sourced from redemption of claims
on the Central Bank, mobilisation of demand, time, savings
and foreign currency deposits as well as credit from the
Central Bank. The funds were used, mainly, for reduction of
unclassified liabilities and accretion to reserves.
At N20,126.44 billion, banks’ credit to the domestic economy,
at end-February 2018 fell by 1.4 per cent below the level at
end-December 2017. The development reflected, the decline
in claims on both the Federal Government and the private
sector in the review quarter.
Total specified liquid assets of the banks was N10,869.9 billion
at end-February 2018, representing 54.3 per cent of the total
current liabilities. At that level, the liquidity ratio fell by 2.0
percentage points below the level at the end of the fourth
quarter of 2017, but was 24.3 percentage points above the
stipulated minimum ratio of 30.0 per cent. The loans-to-deposit
ratio, at 70.16 per cent, was 2.68 percentage points and 9.84
percentage points below the level at end-December 2017
and the prescribed maximum of 80.0 per cent, respectively.


Liquidity ratio was
above the prescribed
minimum, while the
Loan-to-deposit ratio
was below the
prescribed maximum
in Q1 of 2018.


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Economic Report First Quarter

2.5
Capital Market Developments
2.5.1
Secondary Market
The bulish run in the capital market continued in the first
quarter of 2018 due to increasing investors’ confidence,
arising from sustained improvement in the macroeconomic
conditions and business environment. Consequently, on
quarter-on-quarter basis, the aggregate volume and value of
traded securities rose by 52.7 per cent and 29.6 per cent to
43.8 billion and N439.7 billion, repectively, in 384,472 deals,
compared with 28.7 billion shares worth N339.4 billion in
177,691 deals in the fourth quarter of 2017.
The Financial Services Sector (measured by volume) led the
activity chart with 29.8 billion shares valued at N260.7 billion,
traded in 237,028 deals. This constituted 64.1 per cent and 54.3
per cent of the total turnover volume and value of traded
securities, respectively, compared with 13.3 billion shares
valued at N106.4 billion, traded in 102,712 deals in fourth
quarter of 2017. This was followed by Consumer Goods. The
banking sub-sector (measured by volume) was the most
active in the review quarter.
Figure 4: Volume and Value of Traded Securities

Source: NSE
Table 3: Traded Securities on the Nigerian Stock Exchange (NSE)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Volume (Billion)
34.9


Value (N Billion)

Source: NSE

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Value (N billion)
Volume (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)


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Economic Report First Quarter

2.5.2
New Issues Market/Supplementary Listings
There were nine (9) new supplementary equity listings in the
first quarter of 2018.
Table 4: New and Supplementary Listing on the Nigerian Stock Exchange
S/N Company
Additional Shares (Units)
Reasons
Listing
1 Union Bank PLC
12,133,646,995
Ordinary Shares
Supplementary
2 Nigeria Breweries
67,801,163
Dividend
Supplementary
3 Seplat Petroleum Company PLC
25,000,000
Ordinary Shares
Supplementary
4 Lafarge Africa Plc
3.09 billion units
Right Issue
Supplementary
5 UAC Nigeria PLC
960,432,193 units
Right Issue
Supplementary
6 Vetbank
83,704,193 units
Outstanding Shares
Supplementary
7 VetGoods
14,281,216 units
Outstanding Shares
Supplementary
8 Vetindetf
5,526,523 units
Outstanding Shares
Supplementary
9 Morison Industries PLC
836,983,125 units
Right Issue
Supplementary
Source: NSE

2.5.3
Market Capitalisation
Aggregate market capitalisation for all listed securities
(Equities and Debts) rose by 8.5 per cent to N24.9 trillion at
end-March 2018 from N22.9 trillion at end-December 2017.
Similarly, market capitalisation for the equities segment rose by
10.2 per cent to N15.0 trillion and constituted 60.3 per cent of
the aggregate market capitalisation, compared with N13.6
trillion and 59.4 per cent at end-December 2017. The market
capitalisation of debt and Exchange Traded Fund (ETF)
securities grew by 6.1 per cent over the level at endDecember 2017 to N9.9 billion at end-March 2018.
2.5.4 NSE All-Share Index
The performance of quoted stocks on the Nigerian Stock
Exchange improved further in the first quarter of 2018,
following sustained positive sentiments and higher investors’
confidence. Relative to the level at end-December 2017, the
All-Share Index rose by 8.5 per cent to close at 41,504.51 at the
end of the first quarter of 2018.
Similarly,
the
NSE-Premium
index,
which
tracks
the
performance of large firms listed on the premium board, rose
significantly by 15.1 per cent to 2,950.23 at end-March 2018.
Overall, with the exception of the NSE-AseM, which fell by 9.1
per cent below the level at end-December 2017 to 988.53 at
end-March 2018, all other sectoral indices rose above the
levels in the preceding quarter. The NSE-Pension, NSE-Industrial


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Economic Report First Quarter

Goods, NSE-Banking, NSE-Insurance, NSE-Lotus Islamic, NSE-Oil
and Gas and NSE-Consumer Goods rose by 14.8 per cent, 11.0
per cent, 9.5 per cent, 8.4 per cent, 5.4 per cent, 4.9 per cent
and 0.2 per cent, respectively, to 1,584.56, 2,192.12, 520.57,
151.09, 2,698.99, 346.91 and 978.14 at end-March 2018.
Figure 5: Market Capitalisation and All-Share Index

Source: NSE
Table 5: Market Capitalization and All Share Index (NSE)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Market Capitalization (N trillion)

All-Share Index (Equities)
27,385.69

29,597.79

28,335.40

26,874.62

25,516.34

33,117.48

35,439.98

38,243.19

41,504.51

Source: NSE


Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Index
N billion
Market Capitalization (LHS)
All-Share Index (RHS)


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

3.0
Fiscal Operations5
Federally collected revenue in the first quarter of 2018 fell
below the provisional quarterly budget estimate by 21.9 per
cent, but rose above the receipt in the fourth quarter of 2017
by 4.4 per cent. Federal Government provisional retained
revenue for the review quarter was N846.55 billion, while total
estimated expenditure amounted to N1,573.03 billion, resulting
in an estimated deficit of N726.48 billion.

3.1
Federation Account Operations
Federally-collected revenue in the first quarter of 2018, at
N2,097.13 billion, was lower than the proportionate quarterly
budget estimate of N2,684.28 billion by 21.9 per cent. It was,
however, above the receipts in the preceding quarter by 4.4
per cent. The decline in federally-collected revenue (gross)
relative to the proportionate quarterly budget estimate6, was
attributed to the shortfall in receipts from both oil and non-oil
revenue during the review quarter (Fig. 6, Table 6).
Figure 6: Components of Gross Federally Collected Revenue


5 All figures on government revenue and expenditure are provisional and subject to changes\
6 The proportionate quarterly budget estimate is derived from the 2017 approved budget.

Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
N'Billion
Oil Revenue
Non-Oil Revenue
Gross
federally
-
collected
revenue
fell by 21.9 per cent
below
the
proportionate
budget estimate.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

Table 6: Gross Federation Account Revenue (N Billion)
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Federally-collected revenue (Gross)
1,446.12

1,546.71

2,315.84

2,008.87

2,097.13

Oil Revenue
817.48

795.55

1,270.62

1,226.04

1,288.06

Non-Oil Revenue
628.64

751.17

1,045.22

782.83

809.07

Source:Federal Ministry of Finance
* All figures are provisional

At N1,288.06 billion or 61.4 per cent of the total revenue, gross
oil receipt was lower than the proportionate quarterly budget
estimate by 4.5 per cent, but was above the receipts in the
preceeding quarter by 5.1 per cent. The decline in oil revenue
relative to the proportionate quarterly budget estimate was
attributed to the fall in receipts from crude oil/gas exports,
owing to the decline in crude oil production and exports,
arising from leakages and shut-ins/shut-downs at some NNPC
terminals (Fig. 7, Table 7).

Figure 7: Gross Oil Revenue and Its Components


Table 7: Components of Gross Oil Revenue (N Billion)
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Oil R evenue Gro ss
817.48

795.55

1,270.62

1,226.04

1,288.06

Crude oil/Gas Sales
101.33

111.84

345.53

236.69

98.21

PPT/Royalties
325.38

320.49

489.41

666.10

926.33

Others
390.78

363.22

435.69

323.24

263.51


Source: Federal Ministry of Finance
* All figures are provisional
Non-oil revenue, at N809.07 billion or 38.6 per cent of the total,
was below the proportionate quarterly budget estimate of
N1,335.41 billion, by 39.4 per cent. It was, however, above the
level in the preceding quarter by 3.4 per cent. The lower nonoil revenue relative to the proportionate quarterly budget

Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
N'Billion
Crude oil/Gas Sales
PPT/Royalties
Others


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

estimate was due to decline in most of its components,
except customs and excise duty (Fig. 8, Table 8).
Figure 8: Gross Non-Oil Revenue and its Components


Table 8: Components of Gross Non-Oil Revenue (N Billion)
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Non-Oil Revenue
628.64

751.17

1,045.22

782.83

809.07

Value-Added Tax (VAT)
222.00

243.31

248.89

253.46

277.26

Companies Income Tax & Other Taxes
158.95

206.38

543.40

297.56

256.86

Customs & Excise Duties
144.17

150.67

164.15

169.05

158.42

Others/1
103.51

150.81

88.78

62.76

116.53


1/Includes FGN Independent Revenue, Education Tax, NITDF & Customs Federation/Non-Federation Account Levies
(Port, Sugar, ETLS, Steel, CISS & Cement Levies)
Source: Federal Ministry of finance
* All figures are provisional

After statutory deductions and transfers of N117.24 billion and
N382.99 billion, respectively, a net sum of N1,596.90 billion was
retained in the Federation Account. Of this amount, the
Federal Government received N758.47 billion, state and local
governments received N384.71 billion and N296.59 billion,
respectively, while the balance of N157.14 billion was
allocated to the 13.0% Derivation Fund for distribution among
the oil-producing states.
In addition, the Federal Government received N38.89 billion,
while the state and local governments received N129.63
billion and N90.74 billion, respectively, from the VAT Pool
Account.

Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
N'Billion
Corporate Tax
Customs & Excise Duties
Value-Added Tax (VAT)
Others
The sum of N1,596.90
billion
of
the
gross
federally-collected
revenue was distributed
among the three tiers of
government
and
the
13.0% Derivation Fund
for oil producing states.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

Table 9: Summary of Federally-Collected Revenue Deductions and Transfers (Naira Billion)
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Total Deductions 1/
393.37

318.36

523.70

376.63

117.24

Oil Rev enue Deductions

Non-Oil Rev enue Deductions

Total Transfers
316.63

384.39

327.72

306.08

382.99

Federal Gov t. Ind. Rev enue

VAT Pool Account

Others 2/

1/ Refer to Table 1 for breakdown of deductions
2/Includes Federation and Non-Federation Special Levies, Education Tax & NITDEF
Source: Office of the Accountant General of the Federation (OAGF) and Federal Ministry of Finance
* All figures are provisional
Thus, the total statutory and VAT revenue allocation to the
three tiers of government in the first quarter of 2018 amounted
to N1,889.52 billion, compared with the proportionate
quarterly budget estimate of N2,350.72 billion.
3.2
The Fiscal Operations of the Three Tiers of
Government

3.2.1
The Federal Government
Provisional data on Federal Government finances indicated
that the Federal Government retained revenue for the first
quarter of 2018 amounted to N846.55 billion. This was below
the proportionate quarterly budget estimate by 37.2 per cent.
It was also below the receipts in the preceding quarter by 33.1
per cent. Of the total revenue, the Federation Account
accounted for 89.6 per cent, while VAT, Federal Government
Independent Revenue, Excess crude and Excess non-oil
accounted for 4.6, 4.0, 1.7 and 0.1 per cent, respectively (Fig.
9).
Figure 9: Federal Government Retained Revenue

Federation Acct.
89.6%
VAT Pool Acct.
4.6%
FGN Ind. Rev.
4.0%
Excess Crude
Acct.
1.7%
Excess Non-Oil
0.1%
At N846.55 billion,
the estimated FGN
retained
revenue
was lower than the
proportionate
quarterly budget
estimate by 37.2 per
cent.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

Table 10: Federal Government Fiscal Operations (N Billion)
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Retained Revenue
1,344.71

1,021.94

990.21

1,265.75

846.55

Expenditure
1,925.95

1,361.83

1,652.00

1,956.77

1,573.03

Current Surplus(+)/Deficit(-)
0.32

(57.70)

(307.49)

(192.05)

(293.12)

Primary Surplus(+)/Deficit(-)
42.90

(36.29)

(48.58)

(272.74)

(33.87)

Overall Balance: Surplus(+)/Deficit(-)
(581.25)

(339.89)

(661.79)

(691.02)

(726.48)

Source: Fiscal Liquidity Assessment Committee (FLAC), Ministry of Finance & the Office of the Accountant General
of the Federation
*All figures are provisional
At N1,573.03 billion, the estimated Federal Government
expenditure for the first quarter of 2018 was below both the
proportionate quarterly budget estimate of N1,937.98 billion
and the level in the preceding quarter by 18.8 per cent and
19.6 per cent, respectively. A breakdown of the total
expenditure
showed
that
the
recurrent
component
accounted for 72.5 per cent, while capital and statutory
transfers accounted for 24.6 and 2.9 per cent, repectively. A
further breakdown of the recurrent expenditure showed that
the non-debt component accounted for 39.2 per cent, while
debt service payments was 60.8 per cent.
Thus, the fiscal operations of the Federal Government resulted
in an estimated deficit of N726.48 billion, compared with the
proportionate quarterly budget deficit of N589.19 billion.
Figure 10: Federal Government Expenditure


Recurrent
72.5%
Capital
24.6%
Transfers
2.9%
Fiscal
operations
of the FG resulted
in an estimated
deficit of N726.48
billion in Q1 2018.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

3.2.2
Statutory Allocations to State Governments
Total allocation to state governments from the Federation
Account, including the 13.0% Derivation Fund and the VAT
Pool Account, at N683.32 billion, was lower than the
proportionate quarterly budget estimate by 19.5 per cent. A
breakdown showed that receipts from the Federation
Account was N553.69 billion (81.0%), while the share from VAT
Pool Account stood at N129.63 billion (19.0%). The receipts
from both the Federation and VAT Pool Accounts fell below
the proportionate budget estimate by 12.5 and 40.0 per cent,
respectively.
3.2.3
Statutory Allocations to Local Government Councils
Total allocations to local governments from the Federation
and VAT Pool Accounts in the first quarter of 2018 stood at
N393.38 billion. This was below the proportionate quarterly
budget estimate by 23.3 per cent. Of the total amount,
allocation from the Federation Account was N302.64 billion
(76.9%), while the VAT Pool Account stood at N90.74 billion
(23.1%).


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

4.0
Domestic Economic Conditions
Dry weather condition was prevalent in the Northern States in the
first quarter of 2018, while in the South, there were different levels of
rainfall, signaling the beginning of the rainy season. Agricultural
activities were, therefore, generally dominated by preparations for
the rainy season farming, while farmers in the livestock sub-sector
concentrated on preparation for increased sales during the Easter
celebration. The end-period inflation, on year-on-year and 12-month
moving average bases for the first quarter of 2018 were 13.34 per
cent and 15.60 per cent, respectively
4.1
Agricultural Sector
Notwithstanding the prevalence of dry weather conditions
during most part of the review quarter, varying degree of
rainfall was witnessed in the inland areas of the South, thus
signaling the commencement of the rainy season. The
Northern region, however, remained dry, with improved
moisture and some degree of raindfall in few states, including
Plateau and Bauchi, as well as the Federal Capital Territory
(FCT).
Consequently, the predominant agricultural activities during
the review quarter were preparations for rainy season farming.
Clearing of land and harvesting of tree crops were prevalent
in the Southern States, while nurturing of irrigation-fed
vegetables and crops dominated in the Northern States.
Incidences of insurgency attacks and farmers cum herders’
clashes in some states, however, continued to impact
negatively on agricultural activities. In the livestock sub-sector,
poultry, fishery and cattle farmers concentrated on activities
to boost sales during the Easter celebration.
4.2
Agricultural Credit Guarantee Scheme
A total of N825.72 million was guaranteed to 4,950 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the first quarter of 2018. This represented 44.5 per cent and
49.4 per cent decline below the levels in the fourth and the
corresponding quarters of 2017, respectively. Sub-sectoral
analysis showed that food crops accounted for the largest
share of N535.3 million (64.8 per cent) guaranteed to 3,492
beneficiaries. This was followed by livestock sub-sector, N97.7
million (11.8 per cent) guaranteed to 394 beneficiaries, while
cash crop sub-sector got N90.2 million (10.9 per cent)


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

guaranteed to 544 beneficiaries. The fisheries sub-sector
received N54.5 million (6.6 per cent) guaranteed to 213
beneficiaries; mixed crops sub-sector had N26.5 million (3.2
per cent) guaranteed to 172 beneficiaries, while the sum of
N21.4 million (2.6 per cent) was guaranteed to 135
beneficiaries in the ‘Others’ sub-sectors.
Analysis by state showed that 31 states and the Federal
Capital Territory benefited from the Scheme in the review
quarter. The highest and lowest sums of N152.6 million (18.5 per
cent) and N0.2 million (0.02 per cent) were guaranteed to
Anambra and Bayelsa states, respectively.
4.3 Commercial Agricultural Credit Scheme (CACS)
At end-March 2018, total amount released by the CBN under
the Commercial Agriculture Credit Scheme (CACS) from
inception to the participating banks for disbursement stood at
N551.93 billion for 561 projects. The projects included sixty-nine
(69) state government projects under CACS and nine (9)
projects under the Paddy Aggragate Sheme (PAS) (Table 11).


Source: CBN
Table 11: Disbursement of Credit Under the Commercial Agriculture Credit Scheme (CACS)
S/N
Participating Banks
Amt Disbursed (N billion)
Number of Projects/State Governments

Access Bank Plc
36.66

Citibank Plc
3.00

Diamond Baqnk Plc
4.85

ECOBANK
6.38

FCMB Plc.
12.43

Fidelity Bank Plc
21.18

First Bank of Nigeria Plc
42.89

GTBank Plc
39.70

Heritage Bank Plc
6.82

Keystone Bank
14.05

Jaiz Bank Plc
0.00

Skye Bank Plc
13.77

Stanbic IBTC Bank
27.66

Sterling Bank Plc
71.67

Union Bank Nigeria PLC
28.74

United Bank for Africa (UBA) Plc
74.06

Unity Bank Plc
25.18

Wema Bank
2.89

Zenith Bank
118.16

Suntrust Bank Ltd
1.85

TOTAL
551.93

C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

4.4
Industrial Production7
Activities in the industrial sector showed improvement over
the level in the fourth quarter of 2017. The development
reflected the impact of continued stability in the foreign
exchange market and easing inflationary pressure, which
promoted new orders, new export business and increased
output. Thus, at 107.8 (2010=100) in the review quarter, the
estimated index of industrial production rose by 0.9 per cent
over the level in the fourth quarter of 2017. The increase was
attributed to the rise in activities in all the sub-sectors.
The estimated index of manufacturing production in the first
quarter of 2018, at 188.6 (2010=100), showed 0.2 per cent
increase above the level in the fourth quarter of 2017. The
capacity utilisation was estimated at 54.8 per cent, indicating
a 0.3 percentage point increase over the level in the
preceding quarter. The improvement was due to continued
moderation of input prices, which led to expansion in new
orders and new export businesses (Fig.11).
Figure11: Manufacturing Capacity Utilization Rate

Source: Staff Estimate


7 Indices are staff estimates and subject to changes and revision

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Percent
Industrial activities
rose in the review
quarter due to
increased activities in
all sub-sectors.
Industrial capacity
utilisation stood at
54.8 per cent in the
review quarter.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

The index of mining production in the first quarter of 2018, at
71.4 (1990=100), rose by 2.5 per cent above the level in the
preceding
quarter.
The
development
reflected
further
increase in crude oil and gas production in the review quarter.
Estimated average electricity generation in the first quarter of
2018 fell by 8.7 per cent to 3,650 MW/h, below the level in the
fourth quarter of 2017. The fall was attributed, mainly, to
multiple system collapse and a decline in supply from thermal
stations.
At 3,217 MW/h, average estimated electricity consumed fell
by 7.4 per cent, below the level in the fourth quarter of 2017.
The fall was attributed to the decline in generation (Figure 12,
Table 11).
Figure 12: Index of Industrial Production (2010=100) 8

Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q1-18
Index
Mining
All Sectors
Manufacturing

Source: Staff Estimate

Table 12: Index of Industrial Production and Myanufacturing Capacity Utilisation Rate

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
All Sectors (1990=100)

Manufacturing

Mining


Capacity Utilisation (%)

Source: Saff Estimate


8 Index measurement (2010=100) from first quarter 2015
Average electricity
generation and
consumption fell in
the review quarter.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

4.5
Petroleum Sector
Nigeria’s crude oil production, including condensates and
natural gas liquids, averaged 1.95 mbd or 175.50 million barrels
(mb) in the review quarter. This represented 0.16 mbd or 8.7
per cent increase over 1.80 mbd or 165.60 mb in the fourth
quarter of 2017. The development was due to uninterrupted
production, on account of the sustained peace in the Niger
Delta region.
Crude oil export averaged 1.50 mbd/135.00 mb, representing
11.6 per cent increase, compared with 1.35 mbd or 124.20 mb
in the fourth quarter of 2017. Allocation of crude oil for
domestic consumption was maintained at 0.45 mbd or 40.50
million barrels in the review quarter.
The average spot price of Nigeria’s reference crude oil, the
Bonny Light (37° API) rose to US$68.50 per barrel in the review
quarter from US$62.48 per barrel in the fourth quarter of 2017.
This represented an increase of 9.6 per cent, attributed to
sustained compliance with the production-cut agreement
and relatively low supplies from the US. The UK Brent, at
US$66.83/b, the WTI at US$62.60, and the Forcados at
US$68.50/b exhibited similar trends as the Bonny Light.
The average price of OPEC basket of fifteen selected crude
streams was US$64.71/b in the first quarter of 2018. This
represented 9.0 per cent and 24.6 per cent increase over the
average of US$59.35/b and US$51.95/b in the fourth quarter
and the corresponding quarter of 2017, respectively (Figure
13, Table 13).
Crude oil and natural
gas production rose in
the first quarter of 2018.
Crude oil export
rose in Q1 2018.
Average crude oil
prices, rose in the
international crude oil
market in Q1 2018.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

Figure13: Trends in Crude Oil Prices

Source: Reuters

Table 13: Average Crude Oil Prices in the International Oil Market
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q4-17
Bonny Light

OPEC Basket


Source: Reuters

4.6
Consumer Prices9
The all-items composite Consumer Price Index (CPI), at endMarch 2018, was 252.4 (November 2009=100), indicating 0.84
per cent and 13.34 per cent increase above the levels in the
fourth and the corresponding quarters of 2017, respectively.
The development was attributed to price increase in both the
food and non-food categories. It also indicated fourteenth
consecutive month of decline in inflation, reflecting, mainly,
sustained moderation of exchange rate pass-through to
domestic prices.
The urban all-items CPI at the end-March 2018 was 255.6
(November 2009=100), indicating 0.86 per cent and 13.75 per

9 New CPI with November 2009 = 100 as base and new weight based on the
2003/2004 Nigeria Living Standard Survey (NLSS) was released by the National
Bureau of Statistics (NBS) ON 18TH October 2010. All values are staff estmates.

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
US$ per barrel
Bonny Light
OPEC Basket
The general price level
increased in Q1 2018
over the level in the
preceding quarter.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

cent increase, above the levels in the fourth quarter and the
corresponding period of 2017, respectively. Similarly, the rural
all-items CPI, at 249.9 (November 2009=100), represented
increase of 0.82 per cent and 12.99 per cent, respectively,
compared with the levels at the end of the fourth quarter and
the corresponding period of 2017 (Figure 14, Table 14).
The composite food index (with a weight of 50.7 per cent in
the CPI basket) was 267.9, compared with 261.0 and 230.8, at
the end of the fourth and the corresponding quarters of 2017,
respectively. The rise in the index was attributed to the
increase in the prices of bread and cereals, fish, oil and fats,
vegetables, fruits, coffee, tea and cocoa, meat, milk, cheese
and eggs.
Figure 14: Consumer Price Index

Source: NBS

Table 14: Consumer Price Index (November 2009=100)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Composite
189.9
201.7


Urban

Rural


Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Index
Composite
Urban
Rural


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

Despite the increased transport cost arising from scarcity of
petroleum products in the first month of the review quarter,
inflationary pressure maintained its downward trend in the first
quarter of 2018. This was premised on sustained intervention
by the CBN in the foreign exchange market, which continued
to moderate exchange rate pass through to domestic prices.
Consequently,
headline
inflation
was
13.34
per
cent,
compared with the 15.98 and 17.26 per cent in the fourth and
the corresponding quarters of 2017, respectively. Inflation was
driven, mainly, by rise in prices of selected food items, fuel and
lubricants for personal transport equipment and solid fuels,
among others.
On a twelve-month moving average basis, inflation fell further
to 15.6 per cent in the first quarter of 2018, from 16.50 per cent
and 17.26 per cent in the fourth and the corresponding
quarters of 2017, respectively (Figure 15, Table 15).
Figure 15: Inflation Rate

Source: NBS
Table 15: Headline Inflation Rate (%)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
12-Month Moving Average

Year-on-Year

Source: NBS

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Percent
12-Month Average
Year-on-Year
The headline inflation
(y-o-y) was estimated
at 14..98 per cent in
Q1 2018.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

5.0
External Sector Developments10
Foreign exchange inflow and outflow through the CBN in the first
quarter of 2018 rose by 10.1 per cent and 4.6 per cent, respectively,
above the levels in the fourth quarter of 2017. Total non-oil export
receipts fell by 14.4 per cent, below the level at end-December
2017. The average exchange rate at the invetsors’ and exporters’
window, and the inter-bank segment of the foreign exchange
market were N360.38/US$ and N305.81/US$, respectively, in the
review quarter. At US$46.87 billion, the gross external reserves rose by
19.1 per cent, above the level at end-December 2017.
5.1
Foreign Exchange Flows
Favourable international price and increased domestic
production of crude oil continued to strengthen the external
sector in the first quarter of 2018. Consequently, foreign
exchange inflow through the CBN amounted to US$16.19
billion and indicated 10.1 per cent and 142.6 per cent
increase over the levels in the preceding quarter and the
corresponding period of 2017, respectively. The increase
reflected the rise in both oil and non-oil receipts, including
proceeds from government debts, TSA and third party
receipts.
Aggregate outflow through the CBN increased to US$8.83
billion, above US$8.44 billion and US$ 3.70 billion in the
preceding quarter and the corresponding period of 2017,
respectively. The increase in outflow relative to the preceding
quarter was attributed to the rise in the foreign exchange
special payments, bank charges, external debt service and
inter-bank utilisation. Overall, a net inflow of US$7.36 billion was
recorded through the Bank, compared with US$6.27 billion
and US$2.98 billion in the preceding quarter and the
corresponding period of 2017, respectively (Figure 16, Table
16).


10 Data on foreign exchange flows through the CBN and the Economy are provisional and
subject to change
Foreign exchange inflow
and outflow through the
CBN rose and resulted
in a net inflow of
US$7.36 billion in Q1 of
2018.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

Figure 16: Foreign Exchange Flows Through the CBN


Source: CBN
Table 16: Foreign Exchange Flows Through the CBN (US$ million)
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Inflow
5,875.18

5,613.01

6,726.01

6,597.73

8,404.37

11,984.05

14,708.45

16,187.60

Outflow
6,023.10

7,912.02

4,649.85

3,646.89

7,725.49

9,343.06

8,444.27

8,829.03

Netflow
(147.92)

(2,299.01)

2,076.16

2,950.84

678.88

2,640.99

6,264.18

7,358.57


Source: CBN

Aggregate foreign exchange inflow into the economy
amounted to US$30.60 billion at end-March 2018, indicating
increase of 1.6 per cent and 103.9 per cent, relative to the
levels in the fourth and the corresponding quarters of 2017,
respectively. The development was as a result of, mainly, the
10.1 per cent increase in inflow through the Bank. Oil sector
receipts, which accounted for 10.6 per cent of the total, was
US$3.23 billion, compared with US$3.22 billion and US$2.33
billion in the fourth and the corresponding quarters of 2017,
respectively.
Non-oil public sector inflow, at US$12.95 billion (42.3 per cent
of the total), rose by 12.8 per cent and 199.1 per cent,
compared with the levels at end-December 2017 and the
corresponding period of 2017, respectively. Autonomous
inflow, at US$14.41 billion, fell by 6.5 per cent below the level in
the preceding quarter, but represented 72.9 per cent increase
over the level in the corresponding period of 2017. Inflow from
autonomous sources accounted for 47.1 per cent of the total.
-5,000


Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
US$ million
Inflow
Outflow
Netflow
Autonomous inflow
into the economy fell
by 6.5 per cent in Q1
2018 .


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Economic Report First Quarter

Aggregate foreign exchange outflow from the economy, at
US$9.95 billion, rose by 7.5 per cent and 128.4 per cent above
the levels in the preceding quarter and the corresponding
period of 2017, respectively. The development reflected,
mainly, the increase in inter-bank utilisation and outflow
through autonomous sources. Thus, foreign exchange flows
through the economy resulted in a net inflow of US$20.65
billion in the review quarter, compared with US$20.87 billion
and US$10.65 billion in the fourth quarter of 2017 and the
corresponding period of 2017, respectively.
5.2
Non-Oil Export Earnings by Exporters
Total non-oil export earnings recieved through the banks fell
by 14.4 per cent below the level in the fourth quarter of 2017
to US$0.50 billion in the review quarter. The development was
due, mainly, to the 54.9 and 50.7 per cent reduction in foreign
exchange receipts from agricultural and minerals sub-sectors.
A breakdown by sectors showed that proceeds were:
manufactured products, (US$154.09 million); industrial sector,
(US$142.59 million); agricultural sector, (US$112.57 million);
minerals, (US$53.37 million); and food products, (US$34.85
million). There were no proceeds from the transport sector.
The percentage shares of manufactured products, industrial
sector, agricultural products, minerals and food products in
the total non-oil export proceeds were 31.0, 28.7, 22.6, 10.7
and 7.0 per cent, respectively.
5.3
Sectoral Utilisation of Foreign Exchange

Provisional data showed that sectoral foreign exchange
utilisation amounted to US$7.03 billion in the first quarter of
2018, indicating 15.0 per cent decline below the level in the
fourth quarter of 2017. The development reflected the 5.5 per
cent and 24.0 per cent decline in disbursement/utilisation for
visible and invisible imports, respectively. The invisible sector
accounted for the bulk (45.9%) of total foreign exchange
disbursed in the first quarter of 2018, followed by the industrial
sector (22.9 %). Others were: manufactured products, 12.1 per
cent; food products, 9.0 per cent; minerals and oil sector, 6.8
per cent; transport sector, 2.1 per cent; and agricultural
products, 1.2 per cent (Fig.17).
The invisible sector
accounted for the
bulk of the total
foreign exchange
disbursed in Q1 2018.
Total non-oil export
earnings by exporters
fell in Q1 2018.


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Economic Report First Quarter

Figure17: Sectoral Utilisation of Foreign Exchange

Source: CBN

5.4
Foreign Exchange Market Developments
A total of US$10.85 billion was sold by the CBN to authorised
dealers in the first quarter of 2018. This represented 113.5 per
cent and 393.0 per cent rise above the levels in the fourth
quarter of 2017 and the corresponding period of 2017,
respectively. The development, relative to the preceding
quarter, reflected the rise in swap transactions, sales to BDCs,
inter-bank sales and foreign exchange forwards disbursed at
maturity. Of the total, foreign exchange forwards disbursed at
maturity amounted to US$6.21 billion or 57.2 per cent. BDC
sales, inter-bank sales and swap transactions were US$2.54
billion (23.4 per cent), US$1.66 billion (15.3 per cent) and
US$0.44 billion (4.1 per cent) (Figure 18, Table 17).


Percent of Total
Q3-17
Q4-17
Q1-18
Supply for foreign
exchange by
authorized dealers
rose in Q1 2018.


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Economic Report First Quarter

Figure 18: Supply of Foreign Exchange


Source: CBN

Table 17: Demand for and Supply of Foreign Exchange (US$ billion)
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Forex Sales at rDAS/Interbank

Supply of Swaps

Supply of Forex to BDC

Forward

Total Forex Supply(BDC and rDAS)


Source: CBN

The CBN, in conjunction with the Banker’s Committee,
abolished commission on retail foreign exchange transactions
in the first quarter of 2018. Banks therefore ceased to charge
commission on purchase of foreign exchange by end-users for
business and personal travel allowances as well as medical
and school fees. The CBN also sustained its interventions at
both the inter-bank and BDC segments of the foreign
exchange market in the review quarter. Consequently, the
average exchange rate of the naira vis-à-vis the US dollar at
the inter-bank segment appreciated by 0.04 per cent to
N305.81/US$, relative to the level in the preceeding quarter.
Similarly, at the BDC segement, the average exchange rate
was N362.63/US$, representing 0.1 per cent and 30.3 per cent
appreciation relative to the levels in the preceding quarter
and the corresponding period of 2017, respectively. At the
Investors’ and Exporters’ (I&E) Window, the average

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
US$ billion
Forex Sales at rDAS/Interbank
Supply of Swaps
The average naira
exchange rate vis-à-vis
the US dollar
appreciated in all the
segments of the market
in Q1 2018.


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Economic Report First Quarter

exchange rate appreciated by 0.03 per cent, to N360.38/US$
at end-March 2018, relative to the level in the preceding
quarter.
Consequently, the premium between the average inter-bank
and BDC rates narrowed by 0.01 percentage point, to 18.58
per cent in the review quarter, from 18.59 per cent in the
preceeding quarter. Similarly, the spread between the
average Investors and Exporters window and the BDC rates
further narrowed to 0.5 per cent, from 0.6 per cent in the
preceding quarter (Figure 19, Table 18).
Figure 19: Average Exchange Rate Movements

Source: CBN

Table 18: Exchange Rate Movements and Exchange Rate Premium
Average Exchange Rate (N/US$)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Investors and Exporters Window
N/A
N/A
N/A
N/A
N/A

BDC

Interbank

Premium (%)
rDAS/Interbank
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
BDC/Interbank


Source: CBN

Q1-16
Q2-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
N/US $
Average BDC
Average Interbank


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

Figure 20: Exchange Rate Premium

Source: CBN
5.5
Gross Official External Reserves
Gross external reserves was US$46.87 billion at end-March
2018. This indicated an increase of 19.1 per cent above the
level in the fourth quarter of 2017. The external reserves
position would cover 12.2 months of import of goods and
services or 17.2 months of import of goods only, based on the
estimated value of import for the fourth quarter of 2017. A
breakdown of the official external reserves by ownership
showed that CBN reserves stood at US$35.33 billion (75.4 per
cent), Federal Government reserves, US$9.58 billion (20.4 per
cent) and the Federaltion reserves, US$1.96 billion (4.2 per
cent) (Figure 21, Table 19).

Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Per cent
Interbank/BDC
Interbank/BDC
Gross external
reserves rose during
the first quarter of
2018.


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Economic Report First Quarter

Figure 21: Gross Official External Reserves


Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
US$ million

Table 19: Gross Official External Reserves (US$ million)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
External Reserves
27,336.4

26,505.4

23,806.5

26,986.2

29,994.4

30,341.0

33,159.7

39,353.5

46,621.0


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Economic Report First Quarter

6.0 Global Economic Conditions
6.1 Global Output
Global growth was estimated at 3.9 per cent in 2018,
compared with 3.7 per cent in 2017. The higher growth was
attributed, mainly, to increased stimulus and higher demand
in the advanced economies, as well as more favorable
commodity prices in the emerging market economies.

Growth in advanced countries was projected at 2.3 per cent
in 2018, same as in 2017, on account of tax reforms and fiscal
stimulus in the United States as well as stronger domestic
demand and higher external demand in europe and Japan,
respectively. Growth in the euro area was, however,
projected to slowdown to 2.2 per cent in 2018, compared with
2.4 per cent in 2017, on account of the effects of increased
political uncertainty on Brexit and its effects on confidence
and demand.
In the emerging markets and developing economies, growth
was estimated at 4.9 per cent in 2018, compared with 4.7 per
cent in 2017. This reflected anticipated stronger external
demand and favourable commodity prices. Among the key
emerging market economies, growth in Brazil was estimated
at 1.9 per cent in 2018, compared with 1.1 per cent in 2017, on
account of stronger commodity prices and easing financing
conditions.
In sub-Saharan Africa, growth was projected to rise to 3.3 per
cent in 2018, from 2.7 per cent in 2017. This reflected modest
upgrade of growth in Nigeria and subdued growth prospect in
South Africa.
6.2 Global Inflation
Rising energy prices continued to exert inflationary pressure in
the first quarter of 2018, leading to increased price level in
most advanced economies. In the US, average inflation was
estimated at 2.2 per cent in the first quarter of 2018, from 2.1
per cent in the fourth quarter of 2017. Inflation in the euro area
was estimated at 1.7 per cent, compared with 1.2 per cent in
the preceding quarter, while inflation moderated to 2.8 per
cent in the UK, from 3.0 per cent in the fourth quarter of 2017.


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Economic Report First Quarter

In the major emerging markets and developing economies,
trends in average inflation rate were mixed in the first quarter
of 2018. Average inflation in China and Brazil were estimated
at 2.0 per cent and 3.1 per cent, respectively, in the review
quarter. Inflation, however, remained at double digits in some
large developing economies in sub-Saharan Africa as effects
of past depreciation were yet to fully dissipate.
6.3 Global Commodity Demand and Prices
Global crude oil supply in the review quarter was estimated at
98.0 mbd, representing 0.8 per cent increase above the level
in the preceding quarter. World crude oil demand was,
however, estimated at 97.27 mbd, indicating a 0.6 per cent
decline below the level in the fourth quarter of 2017.
The average price of OPEC Reference Basket (ORB) of 14
selected crude streams was US$64.71/b in the first quarter of
2018 and represented 9.0 per cent increase over the level in
the preceding quarter. The development was attributed to
sustained compliance with the crude oil supply-cut by OPEC
and Non-OPEC members and indication of further extension
till 2019, as wll as, relatively low supplies from the US.
6.4
International Financial Markets
Developments in the international stock markets were
generally mixed in the first quarter of 2018. In North America,
the United States S&P 500, Canadian S&P/TSX Composite and
Mexican Bolsa indices fell by 2.2, 6.1 and 6.6 per cent,
respectively, below the levels at end-December 2017.
Similarly, in Europe, the United Kingdom FTSE 100, France CAC
40 and Germany DAX indices also declined by 10.4, 4.6 and
8.8 per cent, respectively, while the Russian MICEX index rose
by 8.3 per cent.
In South America, the Brazilian Bovespa Stock and Argentine
Merval indices rose by 10.4 and 5.0 per cent, respectively,
while the Columbian COLCAP index declined by 3.6 per cent.
In Asia, Japan’s Nikkei 225, China’s Shanghai Stock ExchangeA and India’s BSE Sensex indices fell by 8.8, 9.5 and 2.9 per
cent, respectively.
In Africa, the Nigerian NSE All-Share, Kenyan Nairobi NSE 20,
Egyptian EGX CASE 30 and Ghanaian GSE All-Share indices


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Economic Report First Quarter

rose by 8.4, 3.2, 13.9 and 27.8 per cent, respectively, while the
South African JSE All-Share index fell by 5.6 per cent, relative to
the level at the end of the fourth quarter of 2017.
In the foreign exchange market, most of the selected
currencies appreciated against the US dollar in the review
quarter. A summary of developments in the foreign exchange
market were as follows:

Africa: The Nigerian naira, South African rand, Kenyan
shilling, Egyptian pound and Ghanaian cedi appreciated
by 0.11, 6.41, 1.91, 0.99 and 2.27 per cent, respectively. The
significant appreciation recorded, especially in South
Africa rand was, largely, attributed to renewed investors’
confidence, following the emergence of a new President
and the relative ease in tension from US-China trade talk.


North America: The Canadian dollar depreciated by 1.89
per cent, due to rising US short-term yields. Mexican peso,
however, appreciated by 7.21 per cent, on account of
reduced uncertainty, following resumption of talks on North
American Free Trade Agreement (NAFTA) by the US.


South America: The Brazilian real and Argentine peso
depreciated by 0.13 and 7.77 per cent, respectively, while
Colombian peso appreciated by 6.55 per cent. The
Argentine peso plunged due, mainly, to rising asset
dollarisation by invetsors, to limit risk. Colombian peso
appreciation was propelled by rising prices of oil and nonoil exports and the ongoing 4G infrastructural expansion.


Europe: The British pound, euro and the Russian ruble
appreciated by 5.3, 5.8 and 0.8 per cent, respectively,
against the US dollar. Gains by the British pound, despite
heightened tensions as the countdown to BREXIT intensifies,
reflected the slight increase in wages and interest rates.


Asia: The Japanese yen and Chinese yuan appreciated
by 6.91 and 4.09 per cent, respectively, against the US
dollar. The yen recorded increased demand as a safehaven currency in view of heightened risk perception
across other currencies, while the yuan rallied, largely, as a
result of the booming Chinese economy.


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

6.5 Other International Economic Developments
and Meetings
Other major international economic developments and
meetings of importance to the domestic economy in the first
quarter of 2018 included, the 5th Meeting of the Presidential
Task Force on the ECOWAS Single Currency Programme held
in Accra, Ghana from February 17 - 21, 2018. The purpose of
the meeting was to review the revised draft roadmap for the
ECOWAS Single Currency Programme, determine status of
implementation of the roadmap activities and propose
measures to fast-track the process.
At the end of the discussions, the Task Force resolved that:

The Ministerial Committee should hold a meeting within
three months to draft a proposal on the creation of a
Special Fund to ensure adequate funding for the
implementation of the the roadmap. The Committee
would also prepare proposals on the measures to be
adopted to strengthen the technical capacities of WAMA;

Member Countries of the Task Force should hold quarterly
meetings to assess progress made in the implementation of
activities in the roadmap. The ECOWAS Commission was
also directed to submit to the Authority of Heads of State
and Government at its biannual sessions, detailed reports
on progress and challenges in the implementation of the
programme, as well as, measures adopted to achieve the
2020 deadline; and

The next meeting of the Presidential Task Force is
scheduled to be held in Niamey, Republic of Niger in May
2018.
In addition, the 36th Meeting of the Committee of Governors of
the West African Monetary Zone (WAMZ) was held at Kairaba
Beach Hotel, Banjul, The Gambia, on February 8, 2018, to
deliberate on the status of implementation of the WAMZ Work
Programme. Highlights of resolution and recommendations by
the the Committee of Governors for consideration by the
Convergence Council included:

Consideration of reports on convergence and macroeconomic developments in the WAMZ at end-June 2017


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

and encouragement of Member States to do more to
improve on performance on the convergence criteria;

Directive to WAMI to review and update the Exchange
Rate Mechanism (ERM) in view of the operationalisation of
the Scheme on quoting and trading in the Zone, to be
submitted at the next WAMZ Statutory Meetings;

Approval and adoption of the Internal Audit Charter of
WAMI as the framework for conducting internal audit in
WAMI and the submission of report to the Chairman of the
Committee of Governors semi-annually; and

Consideration and approval of WAMI’s Work Programme
and Budget for 2018.
The 34th Meeting of the Board of Governors of the West African
Institute for Financial and Economic Management (WAIFEM)
was held at the Kairaba Beach Hotel, Banjul, The Gambia, on
February 8, 2018. The Board approved the Budget for 2018
and noted the Progress Report on the Implementation of the
WAIFEM’s Strategic Plan. It also noted the Status Report on
WAIFEM as an ECOWAS Training Institute.
Furthermore, the 51st Ordinary Meeting of the Committee of
Governors (COG) of Central Banks of ECOWAS Member States
was held at Kairaba Beach Hotel, Banjul, The Gambia on
February 9, 2018. The meeting was preceded by the 32nd
Meeting of the Technical Committee, held from February 1 - 3,
2018. The COG meeting reviewed and discussed the Report of
the 32nd Meeting of the Technical Committee. After
deliberations, the COG, among others:

Adopted the recommendations on the ECOWAS Monetary
Cooperation Programme for the first half of 2017;

Approved the recommendations of the Report on the
Development of a Composite Index of Financial Stability in
ECOWAS Member States;

Endorsed the Report on Construction of a Macroeconomic
Convergence Index for ECOWAS Member States (an
Updated Version) with a proviso that it is not a
replacement for the convergence criteria;

Approved the West Africa Monetary Authority (WAMA)
Information Technology Policies and Procedures; and

Approved the 2018 WAMA Work Programme and Budget.


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Economic Report First Quarter

Finally, the 39th Meeting of the Convergence Council of
Ministers and Governors of the Central Banks of the West
African Monetary Zone (WAMZ) was held at the at Kairaba
Beach Hotel, Banjul, The Gambia, on February 9, 2018, to
deliberate on the status of implementation of the WAMZ Work
Programme. In a unanimous decision, the Republic of The
Gambia was elected as Chair of the Convergence Council.
The report of the meeting of the Committee of Governors of
the
WAMZ
was
presented
for
consideration
by
the
Convergence
Council
of
Ministers.
Accordingly,
after
deliberations, the Council endorsed and approved all
recommendations of the Committee of Governors of the
WAMZ.


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APPENDIX TABLES


C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

C e n t r a l B a n k o f N i g e r i a

Economic Report First Quarter

Table A1: Money and Credit Aggregates


Source: CBN
1/ Quasi money consist of Time, Savings and Foreign Currency Deposit at Deposit Money Banks excluding Taking from Discount Houses.
2/ Demand Deposit consist of State, Local and Parastatals Deposits at CBN, State, Local Government and Private Sector Deposits as well
as Demand Deposits of non-financial Public Enterprises at Deposit Money Banks.


Feb-17
Jun-17
Sep-17
Dec-17
Feb-18
Domestic Credit (Net)

Claims on Federal Government (Net)

Central Bank (Net)

Banks

Claims on Private Sector

Central Bank

Banks

Claims on Other Private Sector

Central Bank

Banks

Claims on State and Local Government

Central Bank

DMBs

Claims on Non-financial Public Enterprises

Central Bank

DMBs
--
--
--
Foreign Assets (Net)

Central Bank

DMBs and Non Interest Banks

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

Banks' Deposit with CBN

N billion


C e n t r a l B a n k o f N i g e r i a

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Table A2: Money and Credit Aggregates (Growth Rates)
Feb-17
Jun-17
Sep-17
Dec-17
Feb-18
Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Government

Claims on Non-financial Public Enterprises
Foreign Assets (Net)

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Governments

Claims on Non-financial Public Enterprises
Foreign Asset (Net)

Other Asset (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Percentage Change Over Preceding Quarter
Percentage Change Over Preceding December

Source: CBN
1/ Quasi money consist of Time, Savings and Foreign Currency Deposit at Deposit Money Banks excluding Taking from Discount Houses.
2/ Demand Deposit consist of State, Local and Parastatals Deposits at CBN, State, Local Government and Private Sector Deposits as well as Demand Deposits of
non-financial Public Enterprises at Deposit Money Banks.
*All figures are provisional and subject to changes


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Table A3: Federal Government Fiscal Operations (N billion)
Q1-17
Q2-17
Q3-17
Q4-17
Q1-18
Retained Revenue
1,344.71

1,021.94

990.21

1,265.75

846.55

Federation Account
356.53

408.63

716.95

637.73

758.47

VAT Pool Account
31.97

35.04

35.84

36.50

38.89

FGN Independent Revenue
21.89

97.49

35.76

0.92

33.72

Excess Crude
75.51

19.56

0.00
24.24

14.10

Others
858.81

461.22

201.65

566.36

1.37

Expenditure
1,925.95

1,361.83

1,652.00

1,956.77

1,573.03

Recurrent
1,344.39

1,079.65

1,297.70

1,457.80

1,139.67

Capital
377.62

163.80

236.90

384.92

387.08

Transfers
203.94

118.38

117.39

114.06

46.28

Overall Balance: Surplus(+)/Deficit(-)
(581.25)

(339.89)

(661.79)

(691.02)

(726.48)

*All figures are provisional and subject to changes


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