ECONOMIC REPORT
FIRST QUARTER 2017


CENTRAL BANK OF NIGERIA


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


Subscription to the Quarterly Economic Report is available without charge to institutions, corporations,
embassies and development agencies. Individuals, on written request, can obtain any particular issue
without a charge. Please direct all inquiries on the publication to the Director of Research, Central Bank
of Nigeria, P.M.B. 187, Garki, Abuja, Nigeria.

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
Page iii
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
Page iv
Economic Report First Quarter


Text Tables

Appendix Tables


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

Figures


C e n t r a l B a n k o f N i g e r i a
Page vi
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 Summary
The fall in foreign assets (net) and other assets (net) led to the
decline in key monetary aggregates in the first quarter of 2017.
Consequently, broad money supply (M2) and narrow money supply
(M1) fell by 7.2 per cent and 12.7 per cent, respectively, below the
levels at end-December 2016.
In line with the continued restrictive monetary policy stance of the
Bank, banks’ deposit and lending rates generally trended upwards in
the first quarter of 2017. The margin between the average savings
deposit and the maximum lending rates widened from 24.25
percentage points to 25.04 percentage points, and the spread
between the weighted average term deposit and maximum lending
rates also widened from 20.50 percentage points to 20.92
percentage point at the end of the first quarter of 2017. The
weighted average inter-bank call rate fell to 16.24 per cent from
20.67 per cent, reflecting the liquidity condition in the banking
system. In most part of the review period, there were no transactions
in the inter-bank segment of the market.
The total value of money market assets outstanding at the end of
the first quarter of 2017 stood at N11,744.07 billion, reflecting an
increase of 8.04 per cent above the level at the end of the fourth
quarter of 2016. The development was due to the rise in FGN Bonds,
Nigerian Treasury Bills and Bankers Acceptances outstanding.
Developments on the Nigerian Stock Exchange (NSE) were mixed.
Federally-collected revenue, at N1,501.94 billion, during the first
quarter of 2017, was lower than the 2016 quarterly budget estimate
by 36.3 per cent, but was above the receipts in the fourth quarter of
2016 by 12.2 per cent. The decline, relative to the budget estimate,
was attributed to the shortfall in receipts from both oil and non-oil
revenue during the review quarter. Federal Government retained
revenue and total expenditure were N608.11 billion and N1,675.76,
respectively, resulting in an estimated deficit of N1067.65 billion in the
first quarter of 2017.
The preparation for the 2017 wet season farming was the dominant
agricultural activity across the country in the review quarter. Major
agricultural activities in the Southern states included harvesting of
tree crops and clearing of land for the 2017 wet season farming,
while tending of irrigation-fed vegetable and cereal crops were the
dominant activities in the Northern states. In the livestock sub-sector,
poultry farmers increased the raising of broilers and layers in
preparation for the 2017 Easter celebrations.
World crude oil demand and supply were estimated at 95.39 mbd


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 95.82 mbd, respectively, in the first quarter of 2017, compared
with the preceding quarter of 2016. Nigeria’s crude oil production,
including condensates and natural gas liquids, was also estimated at
an average of 1.59 million barrels per day (mbd) or 143.10 million
barrels (mb) for the first quarter of 2017. Crude oil export was
estimated at 1.14 mbd or 102.6 million barrels, while deliveries to the
refineries for domestic consumption was 0.45 mbd or 40.50 million
barrels in the review quarter. The average price of Nigeria’s
reference crude, the Bonny Light (370 API), was US$54.17 per barrel in
the review quarter, compared with US$49.84 per barrel at endDecember 2016.
Provisional data showed that foreign exchange inflow and outflow
through the CBN amounted to US$6.60 billion and US$3.65 billion,
respectively, resulting in a net inflow of US$2.95 billion. Foreign
exchange sales by the CBN to the authorised dealers amounted to
US$2.15 billion. The average exchange rate of the naira vis-à-vis the
US dollar at the inter-bank market depreciated further to
N305.64/US$.
Other major international economic developments and meetings of
importance to the domestic economy in the review period included:
the first ordinary meeting of the year of the Bureau of the Association
of African Central Banks (AACB) held at the Headquarters of the
Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO) in Dakar,
Senegal on March 8, 2017; the 32nd Board of Governors Meeting of
the West African Institute for Financial and Economic Management
(WAIFEM), the 34th Meeting of the Committee of Governors of the
Central Banks of the West African Monetary Zone (WAMZ), and the
49th Ordinary Meeting of the Committee of Governors of Central
Banks of ECOWAS Member States were held at the International
Conference Centre, Bintumani Hotel, Freetown, Sierra Leone, on
February 9, 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

2.0 Financial Sector Developments
On quarter-on-quarter basis, growth in the key monetary aggregates
decelerated at the end of the first quarter of 2017, reflecting the fall
in foreign assets net (NFA), and other assets net (OAN). Banks’
deposit and lending rates trended upward. The value of money
market assets outstanding increased, due, largely, to the rise in FGN
Bonds and Nigerian Treasury Bills. Developments on the Nigerian
Stock Exchange (NSE) were mixed.

2.1 Monetary and Credit Developments
The Bank maintained a restrictive monetary policy stance in
the first quarter of 2017. Consequently money supply
decelerated and inflation moderated to 17.26 per cent,
compared with 18.55 per cent in the preceding quarter.
On quarter-on-quarter basis, broad money supply (M2), at
N22,024.98 billion, fell by 7.2 per cent at the end of the review
period, compared with the decline of 15.8 per cent at the end
of the preceding quarter. This, however, contrasted with the
growth of 28.8 per cent recorded at the end of the
corresponding period of 2016. The development relative to
the preceding quarter, reflected, the 14.8 and 5.7 per cent
decline in net foreign assets and other assets (net) of the
banking system, which outweighed the 2.6 per cent growth in
net domestic credit of the banking system.
Similarly, narrow money supply (M1), at N9,955.24 billion, fell by
12.7 per cent at the end of the first quarter of 2017, compared
with the decline of 28.7 per cent at the end of the preceding
quarter, but contrasted with the growth of 67.1 per cent at
end-March 2016. The fall in M1 relative to the preceding
quarter, was due to the 8.8 per cent and 13.5 per cent
decrease in currency outside banks and demand deposits,
respectively.
Relative to the level at the end of the fourth quarter of 2016,
quasi-money fell by 2.0 per cent to N12,069.67 billion at the
end of the first quarter of 2017, in contrast to the growth of 1.1
per cent at the end of the preceding quarter. The fall in quasi
money was attributed to the decline in time and savings
deposits of deposit money banks (DMBs) (Fig. 1, Table 1).
Key monetary
aggregates grew
during Q1 of 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

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

Aggregate credit (net) to the economy, at N27,472.69 billion,
moderated by 2.6 per cent at the end of the review quarter,
compared with the growth rate of 3.4 per cent and 5.0 per
cent at the end of the preceding quarter and the
corresponding period of 2016, respectively. The development
was due, wholly, to the 17.9 per cent growth in net claims on
the Federal Government.
Banking system net claims on the Federal government rose by
17.9 per cent to N5,199.69 billion, compared with the
respective growth of 31.3 per cent and 30.7 per cent at endDecember 2016 and corresponding period of 2016,
respectively. The development was attributed largely to
Federal Government borrowing from the CBN and sale of
Treasury Securities to banks.
At N22,273.0 billion, banking system’s credit to the private
sector, contracted marginally by 0.4 per cent, at the end of
first three months of 2017, compared with the decline of 1.1
per cent at the end of the preceding quarter. This, however,
contrasted with the growth of 1.0 per cent recorded at end-

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

-15
-10
-5

-20
-10

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q4-16
Q1-17
Quarterly (%)
Cumulative (%)
QM1 (RHS)
QM2 (RHS)
CM1 (LHS)
CM2 (LHS)
Banking system’s
credit to the Federal
Government
increased by 17.9 per
cent at the end of 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

March 2016. The development relative to the preceding
quarter, suggested banks conservative approach towards
lending, as credit to the core private sector plummeted by
0.38 per cent during the review quarter.
Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy

The gradual stability in the foreign exchange market as a result
of the Bank’s sustained intervention at the inter-bank and BDC
segments of the market moderated demand for foreign
exchange by banks in anticipation of further appreciation of
the naira exchange rate. As a result, foreign assets (net) of the
banking system, at N7,574.2 billion, fell by 14.8 per cent on
quarter-on-quarter basis, at end-March 2017, in contrast to
the growth of 14.8 per cent at the end of preceding quarter
of 2016. The development was attributed mainly to the 98.8
per cent fall in banks’ holdings of foreign assets.
On quarter-on-quarter basis, other Assets (net) of the banking
system fell by 5.7 per cent to negative N13,021.9 billion at the
end of the first quarter of 2017, compared with the 111.9 and
66.1 per cent decline at the end of the preceding quarter and
the
corresponding
quarter
of
2016,
respectively.
The
development reflected, the decline in other assets of banks
and the CBN.


-50

-50

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Quarterly (%)
Cumulative (%)
QCP (RHS)
QCG (RHS)
QAC (RHS)
CCP (LHS)
CCG (LHS)
CAC (LHS)
Foreign assets (net)
of the banking
system fell at the
end of 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

Table 1: Growth in Monetary and Credit Aggregates (Per cent) Over
Preceding Quarter
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
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)


2.2
Currency-in-circulation (CIC) and Deposits at CBN

At N1,983.63 billion, currency-in-circulation rose by 0.24 per
cent relative to the level in the third quarter of 2016. The
development was due, largely, to the increase in its currency
outside banks component.

Total deposits at the CBN amounted to N11,574.35 billion,
indicating a decline of 3.8 per cent below the level at the end
of the fourth quarter of 2016. The development reflected,
mainly, a fall in the private sector deposits in the review
quarter. Of the total deposits at CBN, the shares of the Federal
Government, Banks and ‘’Others’’ were N5,543.76 (47.9 per
cent), N3,888.71 billion (33.6 per cent) and N2,141.88 billion
(18.5 per cent), respectively.
Reserve money (RM) rose by 0.7 per cent to N5,872.35 billion
at the end of the first quarter of 2017, compared with the
12.12.2 per cent at December 2016. This was as a result of
increase in DMBs’ reserves with the CBN.
2.3
Money Market Developments
The financial market remained stable despite the volatile
liquidity trend in the domestic money market. Although inflows
from fiscal injections and maturing CBN bills boosted liquidity,
withdrawals arising from CBN foreign exchange interventions
in the market and Open Market Operations (OMO) put
pressure on market liquidity. The Monetary Policy Committee
(MPC) met and retained the policy rate at 14.00 per cent and
the asymmetric corridor for the standing facilities around the
The financial market
was relatively stable
during the review
period .
Reserve money (RM)
rose at the end of
the first quarter of
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

MPR at +200/-500 bps for lending and deposit rates,
respectively. The Cash Reserves Ratio (CRR) and liquidity ratio
were retained at 22.50 and 30.00 per cent, respectively.
Provisional data indicated that total value of money market
assets outstanding in the first quarter of 2017 stood at
N11,744.07 billion, showing an increase of 8.04 per cent,
compared with the 1.77 per cent increase in the preceding
quarter. The development was attributed to increase in the
FGN Bonds, Nigerian Treasury Bills and Bankers Acceptances
outstanding.
2.3.1
Interest Rate Developments
Available data indicated that banks’ deposit and lending
rates trended upward in the first quarter of 2017. All deposit
rates of various maturites rose from a range of 4.01 – 9.38 per
cent to 4.25 – 10.57 per cent. At 8.52 per cent, the average
term deposit rate increased by 0.77 percentage point above
the level in the fourth quarter of 2016. The average prime and
maximum lending rates rose by 0.08 and 1.18 percentage
points to 17.16 and 29.44 per cent, respectively. Consequently,
the spread between the weighted average term deposit and
maximum lending rates widened by 0.42 percentage point to
20.92 percentage points at the end of the first quarter of 2017.
Similarly, the margin between the average savings and the
maximum lending rates widened by 0.79 percentage point to
25.04 percentage points. With headline inflation at 17.26 per
cent at end-March 2017, 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 20.67 per cent at the end of the
fourth quarter of 2016, fell by 4.4 percentage point to 16.24
per cent in the first quarter of 2017, reflecting the liquidity
condition in the banking system. In most part of the review
period, there were no transactions in the segment of the
market. The Nigeria inter-bank offered rate (NIBOR) for the 30day tenor fell from 16.99 per cent in the fourth quarter of 2016
to 16.73 per cent in the first quarter of 2017. However, the
weighted average rate at the Open-Buy-Back (OBB) segment
rose by 11.5 percentage points to 18.32 per cent (Fig. 3, Table
2).
Interbank call
rate fell in Q1
2017.
The spread between
the weighted –
average term deposit
and maximum
lending rates
widened at the end
of the first quarter
of 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

Figure 3: Selected DMBs Interest Rates (Average)


Table 2: Selected Interest Rates (Percent, Averages)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Average Term Deposits

Prime Lending

Interbank

Maximum Lending


2.3.2
Commercial Paper (CP)
Commercial Paper (CP) outstanding held by DMBs stood at
N0.48 billion at the end of the first quarter of 2017, showing a
2.65 per cent decline below the value of N0.49 billion at the
end of the fourth quarter of 2016. The development was due
to the fall in investment in CP by the commercial banks during
the review quarter. Thus, CP constituted 0.004 per cent of the
total value of money market assets outstanding during the
review period, compared with 0.005 per cent in the preceding
quarter.
2.3.3
Bankers’ Acceptances (BAs)
Increased investment in BAs by commercial banks during the
review period moved BAs to N43.17 billion, compared with
N27.80 billion at the end of the fourth quarter of 2016.
Consequently, BAs accounted for 0.37 per cent of the total
value of money market assets outstanding at end of the first

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Percent per Annum
Percent per Annum
Prime
Interbank
Maximum
Average Term Deposits (RHS)
Investment in CP by
banks fell in the
first quarter of
2017.
DMBs’ holdings of
BA increased
during Q1 of 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

quarter of 2017, compared with 0.26 per cent at the end of
the preceding quarter.

2.3.4 Open Market Operations
There were frequent interventions through the sale of CBN bills
using OMO auctions. The tenors to maturity of the instruments
ranged from 143 days to 360 days from January to March
2017. Total amounts offered, subscribed to and allotted were
N1,100.00 billion, N2,171.99 billion, and N1,6234.01 billion,
respectively. The bid rates ranged from 17.9500 per cent to
18.8600 per cent, and the stop rate, 18.0000 per cent to
18.6000 per cent. The repayment of matured CBN bills was
N950.45 billion, translating to a net withdrawal of N713.57
billion through this medium.
2.3.5
Primary Market
At the Government securities market, NTBs and FGN Bonds
were issued at the primary market on behalf of the Debt
Management Office (DMO). NTBs of 91- 182- and 364-day
tenors, amounting to N1,365.61 billion, N2,418.16 billion and
N1,645.61 billion were offered, subscribed to and allotted,
respectively, at the auctions held in the first quarter of 2017, on
behalf of the Debt Management Office (DMO).
At the 91-day auction, total subscription and allotment were
N287.10 billion and N242.67 billion with bid rates ranging from
9.00 per cent to 25.00 per cent, while the stop rates were from
13.50 per cent to 13.80 per cent. For the 182-day auction, total
subscription and allotment were N367.87 and N305.31 billion,
respectively. The bid rates ranged from 13.50 per cent to
21.00 per cent, while the stop rates were 17.15 per cent to
17.50 per cent. At the 364-day, total subscription and
allotment were N1,763.19 and N1,097.62 billion with bid rates
ranging from 17.00 per cent to 22.00 per cent, while stop rates
were from 18.45 per cent to 18.69 per cent. The bid to cover
ratio was 1.47.
2.3.6
Bonds Market
Tranches of the 5-, 10- and 20-year FGN Bonds were reopened
during the review period. In addition, a new issue of 10-year
bond was offered for sale. The term to maturity of the bonds
ranged from 4 years, 4 months to 19 years. Total amounts
offered, subscribed to and allotted were N370.00 billion,
Subscription for FGN
Bonds of various
maturities were
reopened during the
first quarter of 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

N788.46 billion and N534.95 billion, respectively. The marginal
rates for the 5-year bond ranged from 16.24 per cent to 16.90
per cent; that of the 10-year bond, ranged from 16.29 per
cent to 16.99 per cent and 16.28 per cent to 16.99 per cent for
the 20-year bond. However, for all the tenors, the marginal
rates were between 16.24 – 16.99 per cent. There was no
allotment on non-competitive basis. The bid to cover ratio was
at 1.47. The impressive subscription was due to the renewed
investors’ confidence.
2.3.7
CBN Standing Facilities
Developments at the CBN standing facilities window in the
review quarter indicated higher patronage at the Standing
Lending Facility (SLF) window than at the Standing Deposit
Facility (SDF) window. Total request for Standing Deposit
Facility (inclusive of Intra-day lending facilities (ILF) that was
converted to overnight repo), was N12,250.18 billion in the 60
transaction days from January 1 – March 28, 2017, earning
N9.30 billion at the rate of 16.00 per cent. This was in contrast
to the SLF of N13,513.30 billion, with daily average of N221.53
billion in the 61 transaction days, with interest of N10.73 billion,
earned in the preceding quarter. Penal rate of an additional
500 basis points was charged on institutions that did not
redeem their lendings as at when due. Total standing deposit
facility (SDF) granted during the review quarter was N3,335.10
billion, with a daily average of N57.50 billion, compared with
N3,155.82 billion, in the fourth quarter 2016. The cost incurred
on SDF in the review quarter, stood at N1.12 billion, compared
with N1.10 billion in the preceding quarter.
2.4
Deposit Money Banks’ Activities
The total assets and liabilities of the commercial banks stood
at N32,430.72 billion at the end of the first quarter of 2017,
representing an increase of 2.4 per cent above the level at
end-December 2016. The funds were sourced, mainly, from an
increase in capital accounts, Central Government deposits
and foreign liabilities. The funds were used to aquire
unclassified assets, reduce unclassified liabilities and for
accretion to Reserves. At N21,691.09 billion, banks’ credit to
the domestic economy, rose by 1.1 per cent, relative to the
level at end-December 2016. The development was attributed
to the increase in claims on the Federal Government, in the


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

Economic Report First Quarter

review quarter.

Central Bank’s credit to the commercial banks rose by 0.8 per
cent to N999.75 billion, at the end of the review quarter. Total
specified liquid assets of the banks stood at N7,553.37 billion,
representing 40.8 per cent of their total current liabilities. At
that level, the liquidity ratio expanded by 0.16 percentage
point above the level at the end of the preceding quarter
and was 10.8 percentage points above the stipulated
minimum ratio of 30.0 per cent. The loans-to-deposit ratio, at
78.33 per cent, was 1.62 percentage points, below the level at
the end of the preceding quarter and 1.67 percentage points
below the prescribed maximum of 80.0 per cent.
2.5
Capital Market Developments
2.5.1
Secondary Market
Developments in the capital market continued to be
negatively
affected
by
the
challenging
economic
environment which lingered in the first quarter of 2017. The
effort of government and capital market regulators to
promote the market and the Federal Government economic
recovery plan, however, moderated the overall impact. Thus,
despite the general low investors’ confidence, the positive
outcomes recorded in the last weeks of 2016 was sustained in
the first quarter of 2017. Consequently, activities on the
Nigerian Stock Exchange (NSE) were mixed in the review
period with major market indicators trending in different
directions. The aggregate volume and value of traded
securities rose by 28.8 per cent and 101.4 per cent to 19.8
billion shares and N227.2 billion in 182,764 deals, respectively,
compared with 15.3 billion shares and N112.8 billion in 116,841
deals, recorded in the fourth quarter of 2016.
The Financial Services Sector (measured by volume) led the
activity chart with 16.9 billion shares valued at N66.5 billion
and traded in 106,994 deals, thus, contributing 85.8 per cent
and 29.3 per cent to the total equity turnover volume and
value, respectively, compared with 11.7 billion shares worth
N46.5 billion, traded in 93,011deals, in the fourth quarter of
2016.
There were no Over-the-Counter (OTC) transactions in the
Liquidity ratio in Q1
2017 was above the
stipulated minimum,
while the Loan-todeposit ratio was
below
the
prescribed
maximum.


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

Economic Report First Quarter

review month.

Figure 4: Volume and Value of Traded Securities

Table 3: Traded Securities on the Nigerian Stock Exchange (NSE)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Volume (Billion)


18.5
15.3
19.8
Value (N Billion)


2.5.2
New Issues Market/Supplementary Listings
There were one new and two supplementary equity listings
in the review quarter.
Table 4: New and Supplementary Listing on the Nigerian Stock Exchange
S/N Company
Additional Shares (Units)
Reasons
Listing

The Initiates Plc
889,981,552 Ordinary Shares
Introduction
New

Lafarge Africa Plc.
413,175,709 ordinary shares
acquisition of indirect shares of UCC Ltd
supplementary

Lafarge Africa Plc.
41,317,570 ordinary shares
Bonus issue accruable to Holcibel S.A.
supplementary

2.5.3
Market Capitalisation
In spite of the significant loss of value in the equities market
due, largely, to sales pressure by anxious foreign and local
investors, the debt segment consistently gained value in the
first quarter of 2017. Consequently, the aggregate market
capitalisation for all listed securities (equities and debts) rose
by 1.9 per cent to N16.5 trillion at end-March 2017 from N16.2
trillion at the end of the fourth quarter of 2016. The
development was attributed, mainly, to the increase in the

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Value (N billion)
Volume (Billion)
Volume of traded securities (LHS)
Value of securities (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

market capitalisation of debt securities, which more than
offset the decline in market capitalisation of equity securities.
Market capitalisation for the equities segment fell by 4.5 per
cent to N8.8 trillion and constituted 53.6 per cent of the
aggregate market capitalisation, compared with N9.3 trillion
and 57.2 per cent at end-December 2016, respectively.
2.5.4 NSE All-Share Index
Performance of quoted stocks on the Exchange was
impacted by high inflation and interest rate, uncertainty in the
general economy as well as low confidence and risk averse
attitude of investors. Hence, relative to the level at the
beginning of the review period, the All-Share Index declined
by 5.1 per cent to close at 25,516.34 at end-March 2017.
Similarly, the NSE-Premium index fell by 3.6 per cent to 1,634.05
at the end of the review quarter. With the exception of the
NSE-AseM and NSE-Industrial Goods indices, which rose
marginally by 0.44 per cent and 0.07 per cent to 1,194.88 and
1,596.51, respectively, all other sectoral indices fell below their
levels in the fourth quarter of 2016. The NSE-Consumer Goods
recorded the highest decline of 11.8 per cent to close at
627.79 at end-March 2017. The NSE-Lotus Islamic, NSE-Oil and
Gas, NSE-Insurance, NSE-Pension and NSE-Banking indices fell
by 7.3 per cent, 6.5 per cent, 2.0 per cent, 1.5 per cent and
0.02 per cent to 1,707.26, 292.42, 123.82, 1798.16 and 274.25, at
end-March 2017, respectively.
Figure 5: Market Capitalisation and All-Share Index


15.5

16.5

17.5
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
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

Table 5: Market Capitalization and All Share Index (NSE)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Market Capitalization (N trillion)

All-Share Index (Equities)
31,744.82

33,456.86

31,217.77

26,871.24

27,385.69

29,597.79

28,335.40

26,874.62

25,516.34


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 Operations
Fedrally-collected revenue in the first quarter of 2017 fell short of the
2016 provisional quarterly budget estimate by 36.3 per cent, but was
12.2 per cent higher than the receipts in the fourth quarter of 2016.
Federal Government provisional retained revenue for the review
quarter was N608.11 billion, while total provisional expenditure was
N1,675.76 billion, resulting in estimated deficit of N1,067.65 billion.

3.1
Federation Account Operations
Provisional data indicated that federally-collected revenue, at
N1,501.94 billion, during the first quarter of 2017, was lower
than the 2016 provisional quarterly budget estimate of
N2,378.12 by 36.3 per cent. This was, however, above the
receipts in the fourth quarter of 2016 by 12.2 per cent. The
decline in federally-collected revenue (gross) relative to the
budget estimate 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

Table 6: Gross Federation Account Revenue (N billion)

The provisional quarterly budget estimate is the 2016 budget estimate.

Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Oil Revenue Gross
Non-Oil Revenue
Gross federally -
collected revenue
rose by 12.2 per
cent above the
level in the fourth
quarter of 2016.


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

Economic Report First Quarter

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Federally-collected revenue (Gross)

Oil Revenue

Non-Oil Revenue


At N817.48 billion or 54.4 per cent of the total revenue, gross oil
receipt was lower than the provisional quarterly budget
estimate by 7.5 per cent, but was above the receipts in the
fourth quarter of 2016 by 21.4 per cent. The decline in oil
revenue relative to the budget estimate was attributed to the
persistent fall in receipts from crude oil/gas export, due to the
continous drop in the price of crude oil in the international
market as well as series of shut-ins and shut-downs at some
NNPC terminals, owing to pipeline vandalism and repairs
during the review quarter (Fig. 7, Table 7).

Figure 7: Gross Oil Revenue and Its Components

Table 7: Components of Gross Oil Revenue (N billion)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Oil Revenue Gross

Crude oil/Gas Sales

PPT/Royalties

Others

At N684.46 billion or 45.6 per cent of total revenue, gross non-
-


Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
N billion
Others
PPT/Royalties
Crude oil/Gas Sales


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

Economic Report First Quarter

oil receipts fell below the provisional budget estimate by 54.2
per cent. It was, however, above the level in the preceding
quarter by 2.9 per cent. The decline in non-oil revenue relative
to the provisional budget estimate was due, largely, to the fall
in receipts from most of its components except Customs
Special Levies (Non-Federation Account) during the review
quarter (Fig. 8, Table 8).
Figure 8: Gross Non-Oil Revenue and its Components

Table 8: Components of Gross Non-Oil Revenue (N Billion)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Non-Oil Revenue

Value-Added Tax (VAT)

Companies Income Tax & Other Taxes

Customs & Excise Duties

Others/1

1/ Include FGN Independent Revenue, Education Tax, NITDF & Customs Federation/Non-Federation
Account Levies (Port, Sugar, ETLS, Steel, CISS & Cement Levies)
Of the gross federally-collected revenue, a net sum of N736.11
billion was transferred to the Federation Account for
distribution among the three tiers of government and the
13.0% Derivation Fund. The sums of N77.71 billion, N213.12
billion and N81.62 billion were transferred to the Federal
Government Independent Revenue, VAT Pool Account and
Others, repectively. The Federal Government received
N356.53 billion, while the state and local governments
received N180.84 billion and N139.42 billion, respectively. The
-

1,000
1,200
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
N billion
Others
Customs & Excise Duties
Companies Income Tax & Other Taxes
Value-Added Tax (VAT)
The
sum
of
N736.11 billion out
of
the
gross
federally collected
revenue
was
distributed among
the three tiers of
government
and
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

balance of N59.31 billion was allocated to the 13.0%
Derivation Fund for distribution among the oil-producing
states. The Federal Government aslo received N31.97 billion
from the VAT Pool Account, while the state and local
governments received N106.56 billion and N74.59 billion,
respectively.
The sum of N141.46 billion was also distributed as Exchange
Gain among the three tiers of government and the 13%
Derivation Fund as follows: Federal Government (N66.12
billion),
State
Governments
(N33.54
billion),
Local
Governments (N25.86 billion) and 13% Derivation Fund (N15.94
billion).
In addition, the sum of N18.99 billion was received by the
Federal Government being NNPC’s indebtedness to the
Federal Government in the first quarter of 2017.
Thus, the total statutory and VAT revenue allocation to the
three tiers of government in the first quarter of 2017 amounted
to N1,233.57 billion, compared with the proportionate
quarterly budget estimate of N1,485.70 billion and the sum of
N1,214.84 billion received in the preceding quarter.
3.2
The Fiscal Operations of the Three Tiers of
Government

3.2.1
The Federal Government

The Federal Government retained revenue for the first quarter
of 2017 based on provisional data amounted to N608.11
billion. This was below the proportionate quarterly budget
estimate and the receipts in the preceding quarter by 39.9
and 31.0 per cent, respectively. Of the total revenue,
Federation Account accounted for 58.6 per cent, while
Federal Government Independent Revenue, VAT, and Others
(NNPC Refund and Exchange Gain) accounted for 12.8, 10.9,
9.3, 5.3 and 3.1 per cent, respectively (Fig. 9, Table 9).


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 9: Federal Government Retained Revenue

Table 9: Federal Government Fiscal Operations (N Billion)
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Retained Revenue

Expenditure

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


At N1,675.76 billion, provisional data indicated that Federal
Government expenditure for the first quarter of 2017 was
above the provisional quarterly budget estimate and the level
in the preceding quarter by 6.9 and 7.3 per cent, respectively.
The development relative to the proportionate quarterly
budget estimate was attributed, mainly, to the rise in capital
expenditure. A breakdown of the total expenditure showed
that the recurrent component constituted for 63.3 per cent,
while capital and statutory transfers accounted for 31.7 and
5.0 per cent, repectively (Fig. 5). A further breakdown of the
recurrent expenditure showed that the non-debt component
accounted for 77.0 per cent, while debt service payments
accounted for the balance of 23.0 per cent.
The fiscal operations of the Federal Government, thus, resulted
in an estimated deficit of N1,067.65 billion, compared with the
proportionate quarterly budget deficit of N555.49 billion.
Federation
Account
58.6%
VAT Pool
Account
5.3%
FGN
Independent
Revenue
12.8%
Excess Crude
9.3%
NNPC Refund
3.1%
Exchange Gain
10.9%
Fiscal
operations
of the FG resulted
in an estimated
deficit
of
N1,067.65 billion
in Q1 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

Figure
10:
Federal
Government
Expenditure

3.2.2
Statutory Allocations to State Governments

Total
allocation
to
state
governments
(including
the
Federation Account, 13.0% Derivation Fund and VAT) stood at
N441.10 billion during the review quarter. This was 15.2 per
cent lower than the provisional budget estimate. Further
breakdown showed that receipts from the Federation
Account was N334.54 billion (75.8 per cent), while VAT
contributed N106.56 billion (24.2 per cent). The share of
Federation Account and VAT Pool Account fell below the
proportionate budget estimate by 2.5 and 39.8 per cent,
respectively.
3.2.3
Statutory Allocations to Local Government Councils

Provisional allocations to local governments
from the
Federation and VAT Pool Accounts in the first quarter of 2017
stood at N262.07 billion. This was below the provisional budget
estimate by 24.2 per cent. Of the total amount, allocation
from the Federation Account was N187.48 billion (71.5 per
cent), while VAT Pool Account accounted for the balance of
N74.59 billion (28.5 per cent).


Recurrent,
63.3%
Capital, 31.7%
Transfers, 5.0%


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
The preparation for the 2017 wet season farming was the dominant
agricultural activity across the country in the first quarter of 2017.
Major agricultural activities in the Southern states included
harvesting of tree crops and clearing of land for 2017 wet season
farming, while tending of irrigation-fed vegetable and cereal crops
were the dominant activities in the Northern states. In the livestock
sub-sector, poultry farmers increased the raising of broilers and layers
in preparation for the 2017 Easter celebrations.
4.1
Agricultural Sector
Agricultural activities during the first quarter of 2017 was
dominated by the preparation for the 2017 wet season
farming across the country in the first quarter of 2017. Major
agricultural
activities
in
the
Southern
states
included
harvesting of tree crops and clearing of land for 2017 wet
season farming, while tending of irrigation-fed vegetable and
cereal crops were the dominant activities in the Northern
states. In the livestock sub-sector, poultry farmers increased
their stock of broilers and layers in preparation for the 2017
Easter celebrations.
4.2
Agricultural Credit Guarantee Scheme
A total of N1,630.7 million was guaranteed to 10,310 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the first quarter of 2017. The amount represented a decline of
29.9 and 0.6 per cent below the levels in the preceding
quarter and the corresponding period of 2016, respectively.
Sub-sectoral analysis showed that food crops had the largest
share of N941.4 million (57.7 per cent) guaranteed to 6,551
beneficiaries, while mixed crop received N162.5 million (10 per
cent) guaranteed to 1,273 beneficiaries. The cash crop subsector received N137.0 million (8.4 per cent) guaranteed to
782 beneficiaries, livestock got N238.1 million (14.6 per cent)
guaranteed to 1,036 beneficiaries, fisheries had N111.8 million
(6.9 per cent) guaranteed to 415 beneficiaries, while ‘Others’
received a total of N39.8 million (2.4 per cent) guaranteed to
253 beneficiaries.
Analysis by state showed that 30 states and the Federal
Capital Territory benefited from the Scheme in the review
period, with the highest and lowest sums of N205.6 million (12.6
per cent) and N2.4 million (0.15 per cent) guaranteed to Edo


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 Kogi States, respectively.
At end-March 2017, total amount released by the CBN under
the Commercial Agriculture Credit Scheme (CACS) from
inception to the participating banks for disbursement stood at
N438.1 billion for 501 projects(Table 10), the same as in the
fourth quarter of 2016.


4.3
Industrial Production
Activities in the industrial sector during the quarter showed an
improvement in overall business conditions. The pick-up in
growth momentum was driven by a stronger expansion in
Nigerian private sector output. The development was
attributed to improved demand and power supply conditions
as well as increased business confidence.
The estimated index of industrial production, at 109.9
(2010=100), rose marginally by 0.01 per cent above the level
Industrial activities
slighly rose in the
review quarter due to
increased activities in
all sub-sectors.
Table 10: 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
23.63

Citibank Plc
3.00

Diamond Bank Plc
4.73

ECOBANK
6.38

FCMB Plc.
11.37

Fidelity Bank Plc
16.02

First Bank of Nigeria Plc
42.89

GTBank Plc
29.70

Heritage Bank Plc
6.82

Keystone Bank
4.05

Jaiz Bank Plc
1.00

Skye Bank Plc
11.77

Stanbic IBTC Bank
23.41

Sterling Bank Plc
53.68

Union Bank Nigeria PLC
23.24

United Bank for Africa (UBA) Plc
60.56

Unity Bank Plc
24.33

Wema Bank
2.02

Suntrust Bank Ltd
0.60

Zenith Bank
88.86

TOTAL
438.1

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

Economic Report First Quarter

in the preceding quarter, but fell by the same proportion
below the level in the corresponding period of 2016. The
increase relative to the preceding quarter was attributed to
the slight improvement in the activities in all sub-sectors.
The estimated index of manufacturing production in the first
quarter of 2017, at 187.9 (2010=100), showed a marginal
increase of 0.01 per cent, compared with the preceding
quarter’s level. It, however, fell by 0.01, compared with the
level in the corresponding period of 2016. The capacity
utilisation was estimated at 53.7 per cent, indicating a 1.0
percentage
point
increase.
The
development
was
occasioned by improved power supply and increased new
orders that positively impacted on industrial production
(Fig.11).
Figure11: Manufacturing Capacity Utilization Rate

The estimated index of mining production in the first quarter of
2017 rose by 0.01 per cent to 63.1 (1990=100), compared with
the level attained in the preceding quarter. It fell by the same
value relative to the corresponding period of 2016. The
increase in mining production was accounted for by the
increase in crude oil and gas production.
Estimated average electricity generation in the first quarter of
2017 equally rose by 0.09 per cent to3,500 MW/h, compared
with the level attained in the preceding quarter. The increase
was attributed to the slight boost in gas supply to the thermal

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Percent
Industrial capacity
utilization
remained at 53.7
percentage points
during the review
quarter.
Average electricity
generation and
consumption rose
during 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

stations, as well as the slight increase in water supply to the
hydro stations.
At 2998 MW/h, average estimated electricity consumed also
rose by 0.08 per cent, compared with the level attained in the
preceding quarter. The increase was attributed to an
improvement in generation and transmission (Fig. 12, Table
11).
Figure 12: Index of Industrial Production (2010=100) 2

Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17
Index
Mining
All Sectors
Manufacturing


Table 11: Index of Industrial Production and Manufacturing Capacity Utilization Rate
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
All Sectors (1990=100)

Manufacturing

Mining


62.7
62.3
63.1
Capacity Utilization (%)


4.4
Petroleum Sector
Nigeria’s crude oil production, including condensates and
natural gas liquids, averaged 1.59 mbd or 143.10 million barrels
(mb) in the review quarter. This represented an increase of

2 Index measurement at (2010=100) from first quarter15
Crude oil and natural
gas production
increased in the first
quarter of 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

0.05 mbd or 3.2 per cent, compared with 1.54 mbd or 141.68
mb recorded in the preceeding quarter.
Crude oil export stood at 1.14 mbd or 102.6 mb, representing
an increase of 4.6 per cent, compared with 1.09 mbd or
100.28
mb
recorded
in
the
preceding
quarter.
The
development was due mainly to the temporary shutdown of
the Nembe Creek Line, which exported Bonny Light crude oil
to allow for repairs. Allocation of crude oil for domestic
consumption was maintained at 0.45 mbd or 40.50 million
barrels in the review quarter.
Oil prices improved with increased confidence arising from
the extension of the OPEC production cut agreement. In
addition, the recent US missile attacks on a Syrian air base
added more concerns over the political uncertainty in the
Middle East with increasing risk of crude oil supply disruption.
The developments led to a 8.7 per cent increase in the price
of Nigeria’s reference crude, the Bonny Light (37o API) to
US$54.17/b per barrel in the first quarter of 2017 from
US$49.84/b per barrel recorded in the fourth quarter of 2016.
The average prices of other competing crudes, namely the UK
Brent at US$53.33/b, the WTI at US$51.64, and the Forcados at
US$53.81/b exhibited a similar trend as the Bonny Light.
The average price of OPEC basket of 13 selected crude
streams was US$51.95/b in the first quarter of 2017. This
represented an increase of 9.3 per cent and 72.2 per cent,
compared with US$47.52/b and US$30.16/b recorded in the
preceding
and
the
corresponding
quarters
of
2016,
respectively (Fig. 13, Table 12).
Crude oil export
increased in Q1
2017.
Average crude oil
prices, including
Nigeria’s Bonny
Light (37o API) rose
in the international
crude oil market in
Q1 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

Figure13: Trends in Crude Oil Prices

Table 12: Average Crude Oil Prices in the International Oil Market
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Bonny Light

OPEC Basket


4.5
Consumer Prices3
Persistent depreciation of the naira foreign exchange rate
and the resultant pass-through to general prices remained a
dominant source of upward pressure on the price level during
the review period. The all-items composite Consumer Price
Index (CPI), at end-March 2017, was 222.7 (November
2009=100), representing an increase of 4.3 per cent and 17.2
per cent, above the levels in the fourth quarter of 2016 and
the
corresponding
quarter
of
2016,
respectively.
The
development was driven, largely, by the increase in the prices
of electricity, liquid and solid fuels, Fuels and lubricants for
personal transport equipment, clothing materials, other
articles of clothing and clothing accessories, and book and
stationaries.

3 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.

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
US$ per barrel
Bonny Light
OPEC Basket
The general price
level rose in Q1
2017, compared
with the level in the
fourth quarter of
2016.


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 urban all-items CPI at the end of the first quarter of 2017
was 224.7 (November 2009=100), indicating an increase of 4.7
per cent and 16.3 per cent, above the levels in the fourth
quarter of 2016 and the corresponding period of 2016,
respectively. Similarly, the rural all-items CPI, at 221.2
(November 2009=100), represented increase of 4.2 per cent
and 16.5 per cent above the levels at end-December 2016
and the corresponding period of 2016, respectively (Fig. 14,
Table 13).
The composite food index (with a weight of 50.7 per cent) was
230.8 per cent, representing an increase of 5.6 per cent,
compared with the 218.6 per cent at the end of the
preceding quarter. The rise in the index was driven mainly by
increased prices of bread and cereals; meat, oil and fats; fruits
and fish.
Figure 14: Consumer Price Index


Table 13: Consumer Price Index (November 2009=100)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Composite


213.6
222.7
Urban

Rural


157.5

162.5

167.5

172.5

177.5

182.5

187.5

192.5

197.5

202.5

207.5

212.5

217.5

Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
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

During the review quarter, the effect of CBN’s policy measures
on the foreign exchange market contributed to easing
headline
inflationary
pressure,
through
moderation
in
exchange rate pass-through on domestic prices. The inflation
rate at the end of the review quarter, on a year-on-year basis,
declined to 17.3 per cent from 18.6 per cent recorded in the
fourth quarter of 2016 and an increase from 12.8 per cent in
the corresponding quarter of 2016. On a twelve-month
moving average basis, inflation rose to 17.3 per cent in the first
quarter of 2017, compared with 15.7 and 9.8 per cent
recorded in the preceding and the corresponding quarters of
2016, respectively (Fig. 15, Table 14).
Figure 15: Inflation Rate


Table 14: Headline Inflation Rate (%)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
12-Month Moving Average

Year-on-Year


Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Percent
12-Month Average
Year-on-Year
The headline
inflation (y-o-y)
stood at 18.6 per
cent in Q1 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

5.0
External Sector Developments

Provisional data showed that foreign exchange inflow and outflow
through the CBN in the first quarter of 2017 fell by 1.9 and 21.6 per
cent, respectively, below the levels in the fourth quarter of 2016.
Total non-oil export receipts increased by 85.5 per cent, relative to
the level in the fourth quarter of 2016. The average exchange rate at
the
inter-bank
segment
was
N305.64/US$,
compared
with
N305.21/US$ at the end of the fourth quarter of 2016. At US$29.99
billion, the gross external reserves rose by 11.1 per cent, compared
with the level at the end of the fourth quarter of 2016.
5.1
Foreign Exchange Flows
The performance of the external sector in the first quarter of
2017 improved with an overall balance of payments surplus
equivalent to 3.1 per cent of gross domestic product (GDP),
compared with 0.6 per cent in the corresponding period of
2016. This was influenced by improvements in the price of
crude oil following the decision by the Organisation of
Petroleum Exporting Countries (OPEC) to curtail supply.
Consequently,
provisional
data
showed
that
foreign
exchange inflow and ouflow through the CBN in the first
quarter of 2017 were US$6.60 billion and US$3.65 billion,
respectively. This resulted in a net inflow of US$2.95 billion, in
contrast to the net outflow of US$0.54 billion in the fourth
quarter of 2016. Inflow declined by 1.9 per cent relative to the
level at the end of the fourth quarter of 2016, but rose by 67.3
per cent relative to the level in the corresponding period of
2016. The development relative to the preceding quarter was
due to the absence of swaps transactions (Fig.16, Table 15).


Foreign exchange
inflow and outflow
through the CBN fell
by 1.9 and 21.6 per
cent, respectively,
and resulted in a net
inflow of US$2.95
billion in Q1 of 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

Figure 16: Foreign Exchange Flows Through the CBN


Table 15: Foreign Exchange Flows Through the CBN (US$ million)
Q1-15
Q2-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Inflow
6,976.02

11,111.00

7,135.41

3,942.89

5,875.18

5,613.01

6,726.01

6,597.73

Outflow
8,194.56

9,523.32

7,757.49

4,487.05

6,023.10

7,912.02

4,649.85

3,646.89

Netflow
(1,218.54)

1,587.68

(622.08)

(544.16)

(147.92)

(2,299.01)

2,076.16

2,950.84


Provisonal data on aggregate foreign exchange inflow into
the economy indicated that total inflow was US$15.00 billion.
This represented a decline of 9.2 per cent below the level in
the fourth quarter of 2016, but showed an increase of 1.4 per
cent over the level at the end of the corresponding period of
2016. The development was driven by the fall in receipts from
both the CBN and autonomous sources. Oil sector receipts,
which accounted for 15.9 per cent of the total, stood at
US$2.38 billion, compared with US$1.97 billion and US$2.48
billion, recorded in the fourth quarter of 2016 and the
corresponding period of 2016, respectively.
Non-oil public sector inflow, at US$4.21 billion (28.1 per cent of
the total), fell by 11.6 per cent, compared with the level at
the end of the fourth quarter of 2016, but showed an increase
of 188.4 per cent above the level at the end of the
corresponding period of 2016. Autonomous inflow, which
accounted for 56.1 per cent of the total, fell by 14.1 per cent,
compared with the level in the fourth quarter of 2016.
Autonomous inflow
into the economy
fell by 19.1 per cent
in Q4 2016 .
-6,000
-4,000
-2,000


Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
US$ million
Inflow
Outflow
Netflow
Autonomous inflow
into the economy fell
by 14.1 per cent in
Q1 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

At US$4.31 billion, aggregate foreign exchange outflow from
the economy fell by 18.9 per cent and 15.6 per cent below
the levels in the fourth quarter of 2016 and the corresponding
period of 2016, respectively. The development, relative to the
fourth quarter of 2016, was accounted for by the decline in
interbank utilisation and foreign exchange sales to the BDCs.
Thus, foreign exchange flows through the economy resulted in
a net inflow of US$10.70 billion in the review quarter,
compared with US$11.21 billion and US$9.69 billion in the fourth
quarter of 2016 and the corresponding period of 2016,
respectively.
5.2
Non-Oil Export Earnings by Exporters
Provisional data showed that total non-oil export earnings, at
US$0.87 billion, increased by 85.5 per cent, above the level in
the fourth quarter of 2016, but declined by 14.7 per cent at
the
end
of
the
corresponding
period
of
2016.
The
development, relative to the fourth quarter of 2016, was
attributed, mainly, to the significant increase in receipts from
food products and agricultural export products. A breakdown
by sectors showed that proceeds from manufactured
products, minerals, agricultural products, industrial, food
products and transport sector stood at US$146.36 million,
US$189.77 million, US$341.69 million, US$94.20 million, US$93.92
million and US$0.13 million, respectively.
The percentage shares of manufactured products, minerals,
agricultural products, industrial, food products and transport
in the total non-oil export proceeds were 16.9, 21.9, 39.5, 10.9,
10.8 and 0.00, respectively.
5.3
Sectoral Utilisation of Foreign Exchange

The
invisible
sector
accounted
for
the
bulk
(37.34
per cent) of total foreign exchange disbursed in the first
quarter of 2017, followed by the industrial sector (26.03 per
cent). The contributions of other sectors in a descending order
included: minerals and oil sector (21.05 per cent),
manufactured products (7.58 per cent), food products (6.08
per cent), transport sector (1.50 per cent) and agricultural
products (0.41 per cent) (Fig.17).
.
The invisible sector
accounted for the
bulk of the total
foreign exchange
disbursed during
Q1 2017.
Total non-oil export
earnings by
exporters rose
during the first
quarter of 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

Figure17: Sectoral Utilisation of Foreign Exchange

5.4
Foreign Exchange Market Developments4
A total of US$2.15 billion was sold by the CBN to authorised
dealers during the first quarter of 2017. This reflected a decline
of 38.7 and 25.9 per cent, compared with the levels in the
fourth quarter of 2016 and the corresponding period of 2016,
respectively. The development, relative to the fourth quarter
of 2016, was attributed to the absence of delivery of matured
swap contracts, which accounted for more than half of total
sale in the preceding quarter. The aggregate, forwards
contracts disbursed at maturity amounted to US$1.55 billion,
while interbank and BDC sales were US$0.37 billion and
US$0.23 billion, respectively (Fig. 18, Table 16).


4 Market Closed (MC) - wDAS and rDAS window was closed in February 2015


Percent of Total
Q3-16
Q4-16
Q1-17
Supply for foreign
exchange by
authorized dealers
fell during Q1 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

Figure 18: Supply of Foreign Exchange


Table 16: Demand for and Supply of Foreign Exchange (US$ billion)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Forex Sales at rDAS/Interbank

Supply of Swaps

Supply of Forex to BDC

Total Forex Supply(BDC and rDAS)


The average exchange rate at the inter-bank segment was
N305.64/US$, compared with N305.21/US$ at the end of the
fourth quarter of 2016. It showed a depreciation of 0.1 and
35.6 per cent relative to the rates in the fourth quarter of 2016
and the corresponding quarter of 2016, respectively (Fig. 19,
Table 17).
Figure 19: Average Exchange Rate Movements


Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
US$ billion
Forex Sales at rDAS/Interbank
Supply of Swaps
Supply of Forex to BDC
Total Forex Supply

Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q4-16
Q1-17
N/US $
Average BDC
Average Interbank
The average naira
exchange rate vis-àvis the US dollar was
N305.21/US$ at the
interbank segment in
Q1 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

Table 17: Exchange Rate Movements and Exchange Rate Premium
Average Exchange Rate (N/US$)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
rDAS
169.68
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
BDC

Interbank

Premium (%)
rDAS/BDC
23.5
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
rDAS/Interbank
12.6
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
BDC/Interbank


Figure 20: Exchange Rate Premium


5.5
Gross Official External Reserves
Gross external reserves at the end of the first quarter of 2017
stood at US$29.99 billion, showing an increase of 11.1 and 8.6
per cent, compared with the levels in the fourth quarter of
2016 and the corresponding period of 2016, respectively. The
development, relative to the fourth quarter of 2016, was due
to the inflow from the FGN Eurobond proceeds and other
official purchases. A breakdown of the official external
reserves showed that CBN reserves stood at US$20.20 billion
(67.3 per cent), Federation reserves, US$2.63 billion (8.8 per
cent) and the Federal Government reserves, US$17.17 billion
(23.9 per cent) (Fig. 21, Table 18).


Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Per cent
Interbank/BDC
Interbank/BDC
Gross external
reserves
roseduring the
first quarter of
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

Figure 21: Gross Official External Reserves


Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
US$ million

Table 18: Gross Official External Reserves (US$ million)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
External Reserves
29,357.2

28,335.2

29,880.2

28,284.8

27,336.4

26,505.4

23,806.5

26,986.2

29,994.4


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

6.0 Global Economic Conditions
General price level rose in most advanced economies in the first
quarter of 2017 as a result of rising energy and food price inflation.
Global crude oil demand was estimated at 95.39 mbd, while supply
was estimated at 95.82 mbd, in the first quarter of 2017.
Developments in the international stock markets were largely bullish
during the review period.

6.1 Global Inflation
Headline inflation rates increased in most advanced
economies in the first quarter of 2017 due to rising energy
and food price inflation. Inflation in the US was estimated
at 2.5 per cent from 1.8 per cent in the fourth quarter of
2016. In the UK, inflation rose to 2.1 per cent in the first
quarter of 2017 from 1.2 per cent in the preceding
quarter. In the euro area, though inflation remained
below its 2.0 per cent target, it increased to 1.8 per cent
in the first quarter of 2017 from 0.7 per cent in the
preceding quarter. In emerging markets and developing
economies, inflation rate declined in the first quarter of
2017, compared with the level in the fourth quarter of
2016.
6.2 Global Commodity Demand and Prices
World crude oil demand was estimated at 95.39 mbd in the
first quarter of 2017, representing an increase of 0.04
percentage point, compared with the 95.35 mbd recorded in
the preceding quarter. World crude oil supply in the review
quarter was estimated at 95.82 mbd, representing a decline of
1.1 percentage point below the level in the preceding
quarter.
The average price of OPEC Reference Basket (ORB) of 13
selected crude streams in March 2017, was US$51.95. This
represented an increase of 9.3 per cent over the level in the
preceding quarter. The development was attributed to
positive
sentiments
arising
from
possible
co-operation
between OPEC and non-OPEC suppliers towards stabilising the
market.


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

Economic Report First Quarter

6.3 International Financial Markets
Developments in the international stock markets were largely
positive during the review period. In Africa, the South African
JSE All-Share, Egyptian EGX CASE 30 and Ghanaian GSE ASI
indices increased by 2.8, 5.1 and 10.4 per cent, respectively
while the Nigerian NSE All-Share and Kenyan Nairobi NSE 20
indices fell by 5.1 and 2.3, respectively, during the review
period.
All selected market indices in North America showed positive
gains. The United States S&P 500, Canadian S&P/TSX
Composite and the Mexican Bolsa indices increased by 5.5,
1.7, and 6.4 per cent, respectively. In South America, the
Brazilian Bovespa, Argentine Merval and Colombian COLCAP
indices increased by 7.9, 19.8, and 1.0 per cent, respectively.
In Europe, the FTSE 100, CAC 40 and DAX indices increased by
2.5, 5.4 and 7.2 per cent, respectively, while the MICEX
declined by 10.6 per cent. In Asia, China’s Shanghai Stock
Exchange-A and India’s BSE Sensex indices increased by 3.8
and 11.2 per cent, respectively, while the Japan’s Nikkei 225
index declined by 1.1 per cent.
In the first quarter of 2017, most of the currencies
reviewed appreciated against the U.S. dollar due to a
combination of factors. The events preceding the US
election and the concerns about the nascent stage of
the new administration reduced investors’ confidence in
dollar denominated assets.
In Europe, the British pound, euro and Russian Rubble
appreciated against the U.S. dollar by 1.25, 1.06 and 9.38
per cent, respectively, as oil prices showed moderate
signs of recovery. In North America, the Canadian dollar
and Mexican peso appreciated against the U.S. dollar by
0.75 and 10.74 per cent, respectively. Moreover, in South
America,
the
Brazilian
real,
Argentina
peso
and
Colombian peso appreciated by 4.49, 3.18 and 4.45 per
cent, respectively, reflecting the stabilisation of the
Brazilian economy and gradual recovery from the longterm recession that engulfed it.


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

Economic Report First Quarter

In Africa, the Nigerian naira, Kenyan shilling, Egyptian
pound and Ghanaian cedi depreciated against the U.S.
dollar by 0.44, 0.43, 0.17 and 1.85 per cent, respectively,
while the South African rand appreciated against the
U.S. dollar by 2.46 per cent. In Asia, the Japanese yen,
Chinese yuan and Indian rupee appreciated against the U.S.
dollar by 5.00, 0.87 and 4.73 per cent, respectively, due,
mostly to the continued recovery of output and increase in
commodity prices.
6.4 Other International Economic Developments
and Meetings
Other major international economic developments and
meetings of importance to the domestic economy during the
review period included: the first ordinary meeting of the year
of the Bureau of the Association of African Central Banks
(AACB) held at the Headquarters of the Banque Centrale des
Etats de l'Afrique de l'Ouest (BCEAO) in Dakar, Senegal, on
March 8, 2017. The meeting was preceeded by the Technical
Meeting of the Bureau from March 6 – 7, 2017. Similarly, the
34th Meeting of the Committee of Governors of the Central
Banks of the West African Monetary Zone (WAMZ) was held at
the
International
Conference
Centre,
Bintumani
Hotel,
Freetown, Sierra Leone on February 9, 2017 to deliberate on
the status of implementation of the WAMZ Work Programme.
All the WAMZ Member States, ECOWAS Commission and
WAMI were represented at the meeting. The West African
Institute for Financial and Economic Management (WAIFEM),
the West African Monetary Agency (WAMA), Banque
Centrale des Etats de l’Afrique de l’Ouest (BCEAO), and the
African Development (AfDB) also attended as observers.
Furthermore, The 32nd Board of Governors Meeting of the West
African Institute for Financial and Economic Management
(WAIFEM) took place at the International Conference Centre,
Bintumani Hotel, Freetown, Sierra Leone on February 9, 2017.
The meeting was preceded by the 35th meeting of the
Technical Committee held on February 5, 2017. After
deliberating on the Report, the Board of Governors:


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

Economic Report First Quarter

adopted the draft minutes of the 31st Meeting of the
Board of Governors;

noted the progress report by the Director General;

approved the Draft Revised Budget for the Year 2017 in
the sum of US$6.87 million;

noted the Report on studies conducted by the
Research Unit;

noted the Progress Report on the Implementation of
the WAIFEM’s Strategic Plan; and

noted the Status Report on WAIFEM as an ECOWAS
Training Institute.
The 49th Ordinary Meeting of the Committee of Governors
(COG) of Central Banks of ECOWAS Member States was held
on February 9, 2017 at the International Conference Centre,
Bintumani Hotel, Freetown, Sierra Leone. The meeting was
preceded by the 30th Meeting of the Technical Committee
held from February 3 - 4, 2017. The COG meeting reviewed
and discussed the Report of the 30th meeting of the Technical
Committee.
Moreover, the 37th Meeting of the Convergence Council of
Ministers and Governors of the Central Banks of the West
African Monetary Zone (WAMZ) was held at the International
Conference Centre, Bintumani Hotel, Freetown, Sierra Leone
on February 10, 2017 to deliberate on the status of
implementation of the WAMZ Work Programme. The Report of
the 34th Meeting of the Committee of Governors formed the
basis for the deliberations. In a unanimous decision, the
Republic of Sierra Leone was elected as Chairman of the
Convergence Council. The Convergence Council deliberated
on the presentations of the Committee of Governors of the
WAMZ members, and approved the recommendations
therein.
Finally, the spring 2017 G24 Technical Group Meeting was held
in Addis-Ababa on February 27-28, 2017. Some policy actions
to promote long-term investments from domestic institutional
sources advocated at the meeting included:


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

Economic Report First Quarter

Government support for long-term investments by
designing policy frameworks that support long-term
investment;

Government support, in areas of long-term policy
planning, tax incentives and risk transfer mechanisms
were required to engage investors in less liquid, long
term investments such as infrastructure; and

Reforming the regulatory framework for long-term
investment.


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

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


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.


Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
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

Economic Report First Quarter

Table A2: Money and Credit Aggregates (Growth Rates)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
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


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.


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 A3: Federal Government Fiscal Operations (N billion)
Q1-15
Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Retained Revenue

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Crude

Others/SURE-P

Expenditure

Recurrent

Capital

Transfers

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


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

Economic Report First Quarter