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CENTRAL BANK OF NIGERIA
ECONOMIC REPORT


Third Quarter

i

This document is for CBN internal consumption
ABOUT THE REPORT
The Central Bank of Nigeria (CBN) Economic Report is a compilation and
analysis of economic developments in Nigeria within the review period. The
Report, which is published monthly and quarterly, provides insights into the
current developments in the real, fiscal, financial, and external sectors of
the Nigerian economy as well as global economic developments. It also
reflects on the policy initiatives of the Bank within the period.

The Report is targeted at a wide range of readers, including economists,
policymakers, financial analysts in the government and private sectors, and
the public. Free copies of the Report, both current and past issues, can be
obtained from the CBN website: www.cbn.gov.ng. All inquiries concerning
the report should be directed to the Director, Research Department, Central
Bank of Nigeria, P.M.B. 187, Garki, Abuja, Nigeria.


This document is for CBN internal consumption
Contents

Economic and Business Activities ............... Error! Bookmark not defined.
2.1.2
Domestic Price Developments............... Error! Bookmark not defined.


Tables
Table 3: Indices of Average World Prices of Nigeria’s Major Agricultural Export
Table 4: Federally collected Revenue and Distribution to the Three-Tiers of


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Table 12: EMDEs Currency Rates to the US dollar .......Error! Bookmark not defined.

Figures

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EXECUTIVE SUMMARY
Global economic activity contracted in 2022Q3, following heightened
uncertainty in the business environment. The lingering effect of the
Russia-Ukraine war drove the contraction in economic activities in
Advanced Economies (AEs), while performance in Emerging Markets
and Developing Economies (EMDEs) was mixed, following weak
consumer demand in most economies. Inflation remained elevated
across regions, with signs of easing, due to tight monetary policy
measures. Financial market performance was bearish, particularly in
the equities segment, impacted by interest rate hikes. World crude oil
production increased following improved supply from OPEC+,
particularly Iran, Venezuela and Libya. Crude oil spot prices fell, owing
to increased supplies and pessimism about the world economy.
On the domestic front, economic activity expanded, as the
manufacturing Purchasing Managers Index (PMI) was above the 50index point threshold. The manufacturing PMI slowed to 50.2 index
points, compared with 51.1 index points in June, attributed mainly to
the drag in supply delivery time and employment level. Inflationary
pressures continued, driven, mainly, by increased cost of production and
other structural issues, such as insecurity and flooding. Headline
inflation (year-on-year) rose to 20.77 per cent, from 18.60 per cent in
2022Q2. Core inflation also rose to 17.60 per cent, from 15.75 per cent
in the preceding quarter, due to increase in cost of imported products
and foreign exchange constraints. Food inflation rose to 23.34 per cent,
from 20.60 per cent in 2022Q2, owing to supply chain disruptions.
The fiscal performance of the Federal Government of Nigeria (FGN)
improved, following higher non-oil receipts, particularly from company
income tax. Despite lower oil revenue inflow, the retained revenue of
the FGN rose by 16.6 per cent to N1,227.33 billion, driven by 37.1 per
cent increase in allocation from the Federation Account. Nevertheless,
revenue outcome remained below the quarterly target by 54.3 per cent.
At N2,419.31 billion, provisional aggregate expenditure declined by 1.4
per cent from the level in the preceding quarter, below the quarterly
benchmark by 44.1 per cent. The decline was driven, majorly, by lower
recurrent spending. Consequently, fiscal deficit narrowed by 15.0 per
cent and 35.1 per cent, relative to 2022Q2 and the quarterly
benchmark, respectively. The consolidated public debt as at end-June
2022 stood at N42,845.88 billion (or 23.4 per cent of GDP), within the
40 per cent national threshold.

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The financial system remained safe and sound, as financial soundness
indicators were within the regulatory benchmarks. To moderate the
growth of money supply and help rein in inflation, the Bank maintained
a tight monetary policy stance that affected liquidity in the economy.
Broad money (M3) grew by 11.00 per cent and was within programme
target when annualised. The growth in M3 was driven mainly, by the
increase in domestic claims, particularly claims on the central
government and private sector. Key money market rates trended
upwards in response to the tight liquidity condition. On the Nigerian
Exchange (NGX) Limited, activities were bearish, reflecting investors’
portfolio switching, following tight financial conditions. As such, the AllShare Index (ASI) of the NGX declined, on account of flight to profit in
the fixed income market.
Despite the prevailing global economic condition, the current account
maintained a lower surplus position of US$1.89 billion (1.7 per cent of
GDP), from US$5.07 billion (4.7 per cent of GDP) in the previous quarter.
However, the financial account recorded a lower net incurrence of
financial liabilities of US$2.07 billion, relative to US$3.16 billion (2.8 per
cent of GDP) in 2022Q2, reflecting the impact of monetary tightening
across major advanced economies. The stock of external reserves at
end-September 2022 stood at US$37.51 billion, compared with
US$39.16 billion at end-June 2022. The current level of external reserves
could finance 9.0 months of import of goods only, or 6.5 months of
import of goods and services. The average exchange rate of the naira
per US dollar at the I&E window, was ₦426.34/US$, compared with
₦415.70/US$, in 2022Q2.

The prospect for higher growth in the global economy is pessimistic, due
to uncertainties prevalent in major economies and elevated global
inflation. On the domestic front, growth prospects remain positive, but
could be constricted by shrinkage in global demand, persistent security
challenges and perennial infrastructural deficit. In addition, inflationary
pressure is expected to remain elevated in the next quarter, due to rising
energy and food prices, stemming from increased production and
transportation costs. However, given the tight policy stance of the Bank,
it is expected that inflation would be moderated in the near-term.


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1.0 GLOBAL ECONOMIC DEVELOPMENTS
1.1
Global Economic Activities
Global economic activity contracted in 2022Q3, the first time since
2020Q2, as uncertainties in business environment heightened. Tight
financial conditions, heightened uncertainty linked to the RussiaUkraine war, supply shortages and high inflation adversely effected the
economy. Thus, the average J.P. Morgan Global Composite Purchasing
Manager’s Index (PMI) contracted to 49.9 index points from 52.0 index
points in 2022Q2. Similarly, the manufacturing and services PMI slowed
to 50.7 index points and 50.1 index points, from 53.3 index points and
52.7 index points in the second quarter, respectively. The rate of
increase in employment moderated, as the index fell by 1.4 index points
to 51.83 index points. This was due to slowdowns in hiring amid
weakening output growth (Table 1).
Table 1: Global Purchasing Managers' Index (PMI)


.

2022Q1
2022Q2
2022Q3
Composite
52.5
52.0
49.9
Manufacturing
53.3
53.3
50.7
Services (Business Activity)
52.9
52.7
50.1
Employment Level
52.0
53.2
51.8
Source: JP Morgan, IHS Markit
In Advanced Economies (AEs), economic activities contracted, due to the
lingering effects of the Russia-Ukraine war. The PMI in most AEs fell
below the threshold of 50.0 index points as output dwindled across
both the manufacturing and service sectors. Specifically, US production
declined due to subdued demand, resulting in an output contraction to
47.3 index points from 54.0 index points in 2022Q2. Similarly,
weakened demand in Germany led to a contraction in PMI to 46.9 index
points from 55.3 index points. In the UK, output slowed to 50.3 index
points from 55.3 index points in the preceding quarter, on account of
constrained demand. Japan followed a similar pattern, as economic
activities slowed to 50.2 index points from 52.5 index points in the
preceding quarter, owing to intense cost pressure and the impact of
typhoon Nanmadol (Figure 1).


Economic activity in
Advanced
Economies
Global Economic
Conditions

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Figure 1: Selected Advanced Economies’ PMIs

Source: Trading Economics/Various countries’ websites.

The performance of economic activities in Emerging Markets and
Developing Economies (EMDEs) was mixed, as most economies within the
region experienced weak consumer demand. In China, economic
activities remained subdued in 2022Q3, desoite improvement in PMI.
Although the PMI improved to 48.5 index points from 44.4 index points
in the preceding quarter, the index remained in the contraction mode.
The persistence of the economyin the contraction zone was occasioned
by widespread COVID-19 lockdowns. Also, the PMI indices in Turkey
and South Africa declined to 46.9 index points and 49.2 index points,
from 48.8 index points and 51.26 index points in the preceding quarter,
respectively. Economic activities in Turkey and South Africa slowed due
to fragile demand conditions. However, India’s PMI slowed to 55.1
index points from 58.6 index points in the preceding quarter attributed
mainly to decline in new orders, in the face of rising cost of living (Figure
2).
Figure 2: PMI in Selected EMDEs

Source: Trading Economics/Various countries’ websites.


United States
United Kingdom
Germany
Italy
Japan
2022Q1
2022Q2
2022Q3
50-point Threshold

China
India
Turkey
South Africa
2022Q1
2022Q2
2022Q3
50-point Threshold

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1.2
Global Inflation
Inflation remained elevated across regions, though with visible signs of
easing, due to tight monetary measures. Inflation in advanced
economies was underpinned by idiosyncratic factors. During the
quarter, headline inflation averaged 8.33 per cent and 7.17 per cent in
the US and Canada, compared with 8.64 per cent and 7.55 per cent in
2022Q2, respectively. Inflationary pressure eased in both countries due
to a slowdown in energy prices, particularly gasoline, following an
increase in the global supply of crude oil during the period. On the other
hand, Japan’s inflation rate rose to 2.87 per cent from 2.47 per cent,
driven, mainly, by high cost of imports, especially food and raw
materials. Similarly, inflation in Germany rose to 8.47 per cent from
7.64 per cent in the previous quarter, due to increase in the price of
food and energy products (heating oil and natural gas), highlighting the
continued impact of the Russia-Ukraine war. Likewise, inflation in the
UK surged to 10.03 per cent from 7.90 per cent, stemming from the
high cost of motor fuels and food prices (Figure 3).
Figure 3: Inflation Rates in Selected Advanced Economies, Average (Per cent)

Source: The Organisation for Economic Cooperation and Development.

Inflation in the Emerging Markets and Developing Economies (EMDEs)
was also elevated, due to exchange rate pressures and other structural
challenges. China’s inflation rate rose to 2.67 per cent from 2.26 per
cent in the preceding period, on account of higher food prices, as
consumption strengthened. Prices continued to inch up in South Africa,
as consumer prices rose to 7.63 per cent from 6.68 per, due to
increased transportation cost, and higher prices of fuel, food and nonalcoholic beverages. In Turkey, inflation rose to 81.10 per cent from
74.07 per cent, as the lira plunged further amidst continued interest
rate cuts. However, disinflation was experienced in India as headline

US
UK
JP
CND
GM
FRN
IT
Q3-2021
Q2-2022
Q3-2022
Global Inflation

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inflation declined to 7.04 per cent from 7.28 per cent in 2022Q2, driven,
mainly, by the rising cost of food, transport, housing, and education
(Figure 4).
Figure 4: Inflation Rates in Selected EMDEs, Average (per cent)

Source: OECD

1.3
Global Financial Markets
Financial market performance was bearish in 2022Q3, impaired by
persistent inflation and rising interest rates. Particularly, the equity
market indices were in the bear-market territory due to the tight
financial conditions, as central banks moved to tame inflation, and fear
of possible recession by market participants. In the US, the NASDAQ,
S&P500 and Dow Jones stocks declined by 4.63 per cent, 5.28 per cent
and 6.66 per cent, respectively. Similarly, the NIKKEI 225 closed at 1.73
per cent lower than the previous quarter, despite rallying at the
beginning of, and the greater parts of the quarter. This was due to the
continuous weakening of the Yen against the US dollar.
In Europe, the EURO STOXX50 dipped by 3.96 per cent, following global
trends. Moreso, in the UK, the weakening pound sterling negatively
influenced trading in the quarter, and the announcement of a fiscal
package by the new government in September attracted negative
sentiments in the market, which led to further depreciation of the
sterling to an all-time low against the US dollar. The FTSE 100 index fell
by 3.84 per cent in 2022Q3.
Equity markets in EMDEs also posted negative returns in 2022Q3. The
strengthening of the US dollar against domestic currencies, dwindling
global growth prospects, increased domestic interest rates and
elevated levels of inflation, combined to affect the development in the
equities segment. China’s Shanghai Stock Exchange-A fell by 70.0 per

CHN
IND
IN
MEX
TUR
SA
NIG
Q3-2021
Q2-2022
Q3-2022

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cent relative to the preceding quarter, reflecting investors’ reaction to
the hostility between Beijing and Washington over Taiwan, and the
Zero COVID-19 policy.
The South African JSE also fell by 7.55 per cent as industrials performed
the worst due to the country’s energy struggles, which negatively
affected the mining and manufacturing sectors. Conversely, Egypt’s
blue-chip index, EGX30, increased by 3.80 per cent in 2022Q3, as the
government concluded plans for a new IMF lending package aimed at
stemming the currency crisis (Figure 5).
Figure 5: Global Stock Market Equity Indices

Source: Bloomberg.


The heightened market volatility spilled into fixed income securities, as
central banks and market investors continued to contend with persistent
inflation amid slowing growth environment. Ten-year government bond
yields increased during the quarter, as central banks continued to show
commitments to tame inflation. The average Euro Area 10-year
government bond yield rose to 1.35 per cent in 2022Q3 from 1.10 per
cent in the preceding quarter, following further increases in the policy
rate by 50 basis points (bps) and 75 bps in July and September,
respectively. In the UK, the average yield on 10-year government bond
rose to 2.57 per cent from 2.03 per cent in the preceding quarter on
the back of expectations about further policy rate hikes. Also, the
political uncertainty and the anticipated fiscal response to the energy
crisis weighed negatively on the market, resulting in increased yield.
The US Fed also strongly reiterated the hawkish stance to curb inflation.
Thus, the US 10-year government bond-yield rose to 3.10 per cent from
2.92 per cent in 2022Q2.

2022Q3
2022Q2

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In EMDEs, the trend in government bond yields was mixed as some of
their currencies weakened against the US dollar. In Brazil, the 10-year
government bond yield rose marginally by 20 bps to 5.90 per cent,
reflecting sentiments ahead of October’s presidential election.
However, in China, yields fell, on account of monetary easing1 (Figure
6).
Figure 6: 10-Year Government Bond Yields

Source: Bloomberg.


1.4
Central Banks’ Policy Rates
Central banks, around the world, continued to reaffirm commitments to
tame inflation, with continuous rate hikes, although this has led to
subdued growth outlooks for most economies. The US Federal Reserve
increased its policy rate by 75 every month in 2022Q3, culminating in a
policy rate of 3.25 per cent at the end of the quarter. Similarly, the Bank
of England raised its policy rate by a cumulative 100 bps in 2022Q3 to
2.25 per cent and announced the decision to reduce the purchase of
government bonds by £80 billion over the next twelve months.
Likewise, the Bank of Canada further raised its policy rate to 3.25 per
cent, a cumulative of 175 bps during the quarter, making it the highestlevel of borrowing cost since 2008.
Similarly, monetary tightening continued in some EMDEs as aggregate
prices remained elevated amid economic growth concerns and
instability in capital flows. The Bank of Mexico increased its repo rate
by 150 bps, cumulatively, to 9.25 per cent between August and

1 The PBOC slashed rates for the second time this year in August 2022. The 1-year LPR was cut
by 5 bps to a record low of 3.65 per cent while, the 5-year LPR was slashed by 15 bps to 4.30
per cent.

US
CANADA
GERMANY EURO AREA
UK
FRANCE
JAPAN
CHINA
BRAZIL
NIGERIA
Per cent (%)
2021Q3
2022Q2
2022Q3

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September. In India, the key repo rate was raised to 5.9 per cent in
September amid rising concerns over high inflation, strong global
headwinds and a plunge in the rupee. In Ghana, the policy rate was
increased by 300 bps to 22.0 per cent, as the cedi continued to
depreciate amidst elevated inflation. Other emerging market central
banks, such as South Africa and Nigeria, also raised their policy rates
during the period to 6.25 per cent and 15.5 per cent, respectively, to
stem rising prices. Conversely, in Turkey, despite inflation reaching 80.0
per cent during the quarter, the Bank of Turkey reduced its policy rate
by 200 basis, to 12.0 per cent from, 14.0 per cent in the previous
quarter, in a bid to support the use of the Lira, citing recession risks
(Table 2).
Table 2: Central Bank Policy Rates (per cent)
Country
2021Q3
2022Q2
2022Q3
United States
0.25
1.75
3.25
United
Kingdom
0.1
1.25
2.25
Japan
-0.1
-0.1
-0.1
Canada
0.25
1.5
3.25
Euro Area

1.25
China
3.85
2.85
3.65
India

4.9
5.9
Mexico
4.75
7.75
9.25
Indonesia
3.5
3.5
4.25
Turkey

South Africa
3.5
4.7
6.25
Ghana
13.5

Nigeria
11.5

15.5
Source: Various Central Banks’ websites.

Credit spreads between government and corporate bonds widened
further in 2022Q3, as interest rate hikes across most AE central banks
drove government bond yields, which weighed heavily on market
returns. In the US, Euro area and japan, credit spreads widened by 149
bps, 138 bps and 99 bps, respectively, compared to the preceding
quarter (Figure 7).


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Figure 7: Credit Spreads in Selected Advanced Economies

Source: Bloomberg

In the foreign exchange market, the dollar continued to gain
significantly against the currencies of both AEs and EMDEs, given the
Fed’s tight monetary policy stance. Among the AEs, the Japanese Yen
depreciated by 11.01 per cent, the British Pound by 9.3 per cent, and
the Euro by 7.84 per cent. Likewise, the currencies of EMDEs including
Ghana, Turkey, South Africa, Brazil and Nigeria also weakened vis a vis
the US dollar by 22.08 per cent, 17.09 per cent, 9.65 per cent, 3.24 per
cent and -2.82 per cent, respectively. This development portends major
risks, particularly for countries with high dollar-denominated debts, as
world interest rates rise, and financial conditions tighten further.
Conversely, the Mexican Peso appreciated vis-a-vis the US dollar by
0.15 per cent, due to the hawkish actions of the central bank to tame
inflation and the trade relationship between the countries2 (Figure 8).


2 Roughly 80% of Mexico’s exports go to the US.

US
CANADA
GERMANY
EURO AREA
UK
FRANCE
JAPAN
Per cent (%)
2021Q3
2022Q2
2022Q3
Selected Currencies
against the US Dollar

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Figure 8: Foreign Exchange Rates against the US Dollar (average percentage change)
Note: Average January to June 2022 and July to September 2022
Source: Bloomberg

1.5
Global Commodity Markets
Total world crude oil supply increased in 2022Q3, as OPEC+ supply rose
due to increased production levels, particularly, in Iran, Venezuela, and
Libya. Total world crude oil supply increased by 2.2 per cent, to 101.03
million barrels per day (mbpd) in 2022Q3, from 98.83 mbpd in the
preceding quarter. The rise was driven, largely, by increased supply
from OECD producing countries, particularly, with strong recoveries in
Libya, Iran, Venezuela and marginal gains from Saudi Arabia and the
UAE, which offset the losses in Nigeria, Kazakhstan, and Russia.
OPEC’s crude oil supply rose by 2.1 per cent, to 34.50 mbpd in 2022Q3,
from 33.79 mbpd in the preceding quarter. The rise was driven, mainly,
by the combined production levels in Iran, Venezuela, and Libya,
respectively. Supply from Libya rebounded, as the force majeure on oil
production was lifted, after the end of the blockade at its oil facilities.
On the demand side, total world crude oil demand rose by 0.4 per cent,
to 101.56 mbpd in 2022Q3, from 101.18 mbpd in the preceding
quarter. Global crude oil demand rose slightly as China recover
World Crude Oil
Supply and Demand


UK
Canada
Euro area
Japan
South Africa
Egypt
Brazil
China
India
Russia
Mexico
Kenya
Nigeria
Ghana
Argentina
Turkey
Indonesia
Advanced
Economies
Emerging and Developing Economies
Jan - Jun
Since July 1

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gradually from the post COVID-19 restrictions. In addition, crude oil
demand in the US also increased.

Crude oil spot prices fell in 2022Q3, due to increased supplies and
pessimism about the world economy. The average spot price of Nigeria’s
reference crude oil, the Bonny Light (34.9° API), fell by 10.9 per cent to
US$106.73 per barrel (pb) in 2022Q3, from US$118.34 pb in the
preceding quarter. The prices of Brent, at US$105.48 pb, Forcados at
US$108.01 pb, WTI at US$94.86 pb and OPEC Reference Basket (ORB)
at US$101.83 pb, all exhibited similar trend as the Bonny Light (Figure
9).
The decline in crude oil prices was attributed, largely, to increased
supplies and pessimism about the world economy. The deteriorating
global economic environment and recurring COVID-19 lockdowns in
China continue to weigh on market sentiment (Figure 9).

Figure 9: Quarterly Crude Oil Prices (US$ per barrel)

Source: Thomson Reuters, CBN Staff Compilation

Average spot prices of gold, silver, platinum, and palladium decreased in
2022Q3 as demand for the precious metals fell. The average spot prices
of gold and silver declined by 7.8 per cent and 14.9 per cent to sell at
US$1,727.17 per ounce and US$19.23 per ounce, from US$1,872.98 per
ounce and US$22.61 per ounce, respectively, in the preceding quarter.
The decline in the prices of the precious metals was due to lower
demand for the precious metals as safe haven assets, due to the higher
yields on US treasury bonds as the Federal Reserve raised interest rates
to combat surging inflation.

Q3 2021
Q4 2021
Q1 2022
Q2 2022
Q3 2022
Bonny Light
Brent
Forcados
WTI
Opec Basket
Crude Oil Prices
Other Mineral
Commodities

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Similarly, the prices of platinum and palladium declined by 7.6 per cent
and 0.5 per cent to sell at US$884.86 per ounce and US$2,078.37 per
ounce in 2022Q3, from US$957.26 per ounce and US$2,088.12 per
ounce, respectively, in the preceding quarter (Figure 10). The prices of
the industrial metals declined in response to pessimism about future
demand as major central banks, such as the US Federal Reserve,
increased interest rates to tame inflation, which could cause a
slowdown in global economic activity, including vehicle manufacturing.
Both industrial metals are used as auto catalysts to reduce pollution in
automobiles (Figure 10).

Figure 10: Price Changes in Selected Metals (per cent) for 2022Q3

Source: Refinitiv Eikon IV (Reuters)

Prices for agricultural commodities maintained a downward trend in
2022Q3, fuelled by improved global supply. The average price index for
all the monitored commodities declined by 12.3 per cent to 93.08 index
points from the 106.68 index points in the preceding quarter. The
decrease was due, largely, to the declining prices of palm oil, cotton,
wheat, and rubber, which fell by 38.9 per cent, 21.0 per cent, 19.9 per
cent, and 12.6 per cent, respectively. The development was driven,
largely, by increased supply from producing countries.
The lower wheat price was influenced by the Russian-Ukraine black sea
grain agreement, which enabled the massive export of grains,
especially, wheat from Ukraine, while the decline in the price of palm
oil was attributed to the increased exports of palm oil products in
Malaysian, which rose by over 10.0 per cent. Furthermore, increase in
cotton cultivation in the US and India accounted for the decline in the
price of the commodity.

Gold
Silver
Platinum
Palladium
With corresponding month
With preceding month
Agricultural
Commodity Prices

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However, the prices of groundnut and coffee increased by 7.8 per cent
and 3.5 percent, respectively, compared with the preceding quarter,
largely, on the back of increased demand and adverse weather
conditions (Table 3).

Table 3: Indices of Average World Prices of Nigeria’s Major Agricultural
Export Commodities for Third Quarter 2022 (Dollar Based) (Jan. 2010=100)
COMMODITY
2021Q3
2022Q2
2022Q3
% Change


(1) & (3)
(2) & (3)

All Commodities

Cocoa

Cotton

Coffee

Wheat

Rubber

Groundnut

Palm Oil

Soya Beans

Sources: (1) World Bank Pink Sheet (2) Staff Estimates


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2.0 DOMESTIC ECONOMIC DEVELOPMENTS
2.1
REAL SECTOR DEVELOPMENTS
The Nigerian economy grew in 2022Q3, indicating eighth consecutive
quarters of growth since recession. The growth in the quarter was driven
by activities in the non-oil sector. Real GDP grew by 2.25 per cent yearon-year, though, slower than the growth of 3.54 per cent in 2022Q2.
Growth slowed on account of dampening impact of global headwinds,
such as high energy prices, higher input costs, persisting structural
challenges, such as security concerns, lower crude oil output, foreign
exchange concerns, as well as supply disruptions in food and other farm
produce. Despite these, increased penetration and usage of ICT
services and higher levels of domestic trade supported the growth
outcome of the economy in 2022Q3.
On a quarter-on-quarter basis, real GDP grew by 9.68 per cent in
2022Q3, reflecting higher economic activity than the preceding
quarter. The realised growth was driven by the non-oil sector which
grew by 4.27 per cent. The non-oil sector accounted for 94.34 per cent
of economic activities in the economy in 2022Q3 (Figure 11).
Figure 11: Real GDP Growth Rate, 2020Q3-2022Q3, Year-on-Year

Source: National Bureau of Statistics

The Services and Agriculture sectors grew, in real terms, in 2022Q3, while
the industry sector maintained its contraction. The Services sector
continued its impressive performance, growing by 7.01 per cent in
2022Q3, compared with 6.70 per cent in 2022Q2. The sector also
contributed 3.48 percentage points, representing the highest
contribution to GDP growth rate.


2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3
Per cent
Oil GDP
Non-oil GDP
Domestic Output
and Economic
Activities
Sectoral GDP
performance

16 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
Figure 12: Sectoral Growth Rate of Real GDP, 2020Q3-2022Q3

Source: National Bureau of Statistics
Within the Services sector, Information & Communications, Trade,
Transportation & Storage, Financial & Insurance, and Real Estate
subsectors drove overall growth, contributing 1.50, 0.76, 0.40, 0.40,
and 0.25 percentage points, respectively, to the growth outcome. The
subsectors grew by 10.53 per cent, 5.08 per cent, 41.59 per cent, 12.70
per cent and 4.56 per cent, respectively. The subsectors benefited from
increased economic activities that characterised the period,
particularly, activities in the road transport and insurance.
The Agriculture sector maintained its growth trajectory at 1.34 per cent
in 2022Q3, compared with 1.20 per cent in the preceding quarter. The
growth in Agriculture was due to increased demand and seasonal
factors that characterised the period. Thus, forestry, livestock, crop
production, and fishery subsectors grew by 2.19 per cent, 1.33 per cent,
and 0.36 per cent, respectively, compared with 1.29 per cent, a
contraction of 2.87 per cent, and growth rates of 1.54 per cent, and
0.89 per cent, respectively, in 2022Q2.
Thus, forestry, crop production, and fishery subsectors, grew by 2.19
per cent, 1.33 per cent and 0.36 per cent, respectively IN 2022Q3,
compared with 1.29 per cent, 1.54 per cent and 0.89 per cent, for
forestry, crop production and fishery subsectors, respectively, in
2022Q2. Livestock subsector grew by 1.55 per cent, in 2022Q3, as
against the contraction of 2.87 per cent in 2022Q2.
The Industry sector contributed negatively to real GDP growth in
2022Q3. The Sector, which has been in contraction since 2021Q2,
contracted further by 8.00 per cent in 2022Q3, compared with a
contraction of 2.30 per cent in 2022Q2. The poor performance of the

2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3
Per cent
Agriculture
Industry
Services
Total GDP

17 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
sector was due to the weak performance of the Mining and Quarrying
subsector, occasioned by the huge contractions in Coal Mining and
Crude Petroleum & Natural Gas subsectors by 43.49 per cent, and 22.67
per cent, respectively.
The contraction in the oil sector was attributed to the lower volume of
crude oil production in the quarter, which declined to 1.13mbd from
1.28mbpd produced in 2022Q2. The development was occasioned by
the persisting damages to some key pipelines and terminals, crude oil
theft, the frequent shut-ins, and the force majeure declared on Bonny
and Brass terminals over increased cases of pipeline vandalism.
The performance of the subsectors is shown in figures 13 and 14.
Figure 13: Top 16 Subsectors with largest Contribution to GDP and their Growth
Rates in 2022Q3

Source: National Bureau of Statistics

Figure 14: Subsectors with Least Contribution to GDP Growth and their
Growth Rates in 2022Q3 (Per cent)

Source: National Bureau of Statistics


(2.19%) Forestry
(3.89%) Water supply, sewage, waste Mang.
(7.79%) Arts, Entertainment & Recreation
(1.10%) Education
(1.55%) Livestock
(4.58%) Human Health & Social Services
(6.77%) Accommodation and Food Services
(2.33%) Public Administration
(2.23%) Professional, Scientific & Technical...
(5.52%) Construction
(4.56%) Real Estate
(1.33%) Crop Production
(12.70%) Financial and Insurance
(41.59%) Transportation and Storage
(5.08%) Trade
(10.53%) Information and Communication

Electricity,Gas,Steam & Air conditioner (-
3.56%)
Other Services (-2.67%)
Manufacturing (-1.19%)
Mining and Quarrying (-21.31%)

18 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
2.1.2 Domestic Price Development
Electricity generation improved on account of the maintenance of
transmission and distribution infrastructure and increase in water supply
level. Consequently, the estimated average electricity generation in
2022Q3 increased by 8.6 per cent to 3,435.5 MW/h from 3,162.4
MW/h in the preceding quarter.

Equally, the estimated average electricity consumption for 2022Q3, at
3, 225.9 MW/h, increased by 12.4 per cent, compared with 2,869.2
MW/h in the preceding quarter.
2.1.2 Domestic Price Developments
Headline Inflation remained elevated in 2022Q3, driven by increases
in food and non-food components of the CPI basket. Headline
inflation (year-on-year) rose to 20.77 per cent in 2022Q3, from
18.60 per cent, in the preceding quarter, (Fig. 15). The rise was
driven by increase in the cost of production, following persisting
high energy prices, exchange rate constraint, increase in transport
and logistics cost as well as other structural issues, such as
insecurity. The disruption in the supply of food products, and the
increase in other input costs contributed to the rising inflation.
Figure 15: Headline, Food and Core Inflation (Year-on-Year)

Source: NBS and Staff Estimates

Core inflation rose to 17.60 per cent in 2022Q3, from 15.75 per cent in
the previous quarter. The rise in core inflation was attributed to the
increase in cost of imported products, including local manufacturing
inputs, arising from the continued rise in global inflation and tighter
global economic conditions and persisting foreign exchange
constraints. Also, the increase in energy prices affected processed food,

2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3
Per cent (%)
Headline
Core
Food
Headline
Inflation
Core
Inflation
Electricity
Generation
Electricity
Consumption


19 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
clothing and footwear, health, transport, furnishings, household
equipment and household maintenance, thus, contributing to the
uptick in core inflation.
Food inflation also rose to 23.67 per cent (year-on-year) in 2022Q3,
from 20.60 per cent in 2022Q2. The rise in food inflation was attributed
to the higher cost of processed food, particularly meat, milk, garri, oil
and fats, resulting from increased cost of diesel and other farm inputs.
The rise in the cost of both farm produce and imported food items, such
as fruits, vegetables, grains, rice, fish, yam and other tubers, also
contributed to the increase in food inflation.


Food
Inflation
Box Information 1☹)
The prices of major domestic food commodities increased in third quarter 2022,
compared with the preceding quarter. The increase ranged from 0.6 per cent for
rice local sold loose to 9.1 per cent for yam tuber. This development was due to
the persisting security challenges affecting agricultural activities and distribution
networks. Other causes were the rising cost of production, including inputs and
energy prices, as well as seasonal fall in supply at the height of the rainy season.

2021Q3
2022Q2
2022Q3
% Change
% Change
UNIT

(1) & (3)
(2) & (3)
Agric eggs medium size
1kg

Beans: brown, sold loose
"

Beans: white black eye, sold loose
"

Gari white, sold loose
"

Gari yellow, sold loose
"

Groundnut oil: 1 bottle, specify bottle
"

Irish potato
"

Maize grain white, sold loose
"

Maize grain yellow, sold loose
"

Onion bulb
"

Palm oil: 1 bottle, specify bottle
"

Rice agric, sold loose
"

Rice local, sold loose
"

Rice, medium grained
"

Rice, imported high quality, sold loose
"

Sweet potato
"

Tomato
"

Vegetable oil: 1 bottle, specify bottle
"

Wheat flour: prepackaged (Golden Penny)
2kg

Yam tuber
1kg

Sources: National Bureau of Statistics and Staff Estimates
DOMESTIC PRICES OF SELECTED AGRICULTURAL COMMODITIES THIRD QUARTER 2022

20 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
2.1.4 Socio-Economic Developments
The rate of confirmed cases of COVID-19 infection increased during the
quarter under review, due to lower risk perception. Data from the
National Centre for Disease Control (NCDC) show that at endSeptember 2022, the rate of confirmed cases rose by 3.03 per cent,
compared with 0.85 per cent in 2022Q2 (Figure 16). The rise in
confirmed cases points to the laxity in the compliance with the nonclinical COVID-19 preventive protocols, because of the low-risk
perception. However, the rate of active cases declined by 7.70 per cent,
while discharged cases decreased by 3.24 per cent. In the review
period, 11 deaths were recorded, as against 2 deaths in the second
quarter of 2022.
Data from the National Primary Health Care Development Agency
(NPHCDA) showed that 37.0 per cent of the target population had been
fully vaccinated against the COVID-19 infection as at end-September
2022, compared with 20.9 per cent at the end of the previous quarter.
Furthermore, 10.6 per cent had been partially vaccinated, compared
with 10.7 per cent in 2022Q2.

Figure 16: COVID-19 Statistics3

Source: NCDC

As part of efforts to strengthen health security and respond to disease
threats, the Nigeria Centre for Disease Control (NCDC) partnered with
the United States, in the quarter of 2022, to train epidemiologists in a
two-week intermediate-level professional certification program. This

3 Covid-19 data as at end-September 2022.


2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
Total Confirmed Cases
Discharged Cases
Death Toll
Health/COVID-19
Update


21 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
gesture from the U.S. counterpart is part of efforts to support pandemic
preparedness in Nigeria and globally.
The Federal Executive Council (FEC) approved ₦27.0 billion for the
rehabilitation of the 27km Iduani-Otuwo road which links Ondo and Edo
States, with a completion period of 27 months.
The Federal Government announced the establishment of a PanAfrican university, known as the African Aviation Aerospace University.
The university would purely be an aviation specialised school, affiliated
with the Nile University, Abuja. It would commence with two courses
(BSc Aviation Business and BSc Meteorology), for both online and onsite students. The university would focus more on research and
development in the aviation sector and is expected to commence
academic activities before the end of 2022.
Also, the United States launched a US$48.8 million investment in
Nigeria’s education sector. The investment which is tagged ‘Leveraging
Education Assistance Resources in Nigeria (LEARN) Read Activity’ is
managed through the US Agency for International Development
(USAID). It is aimed at improving early grade reading in the country over
the next five years. The initiative would ensure that school-age children
and youths in Nigeria are able to gain foundational skills, such as literacy
and numeracy, while building critical social and emotional skills to
progress to higher levels of education, training, and employment.
The Federal Executive Council approved the establishment of the
National Flood Emergency Preparedness and Response Plan to ensure
a more resilient and effective response to tackle flooding nationwide.
The FEC called on operational stakeholders, including state
governments to implement the plan vigorously to achieve the intended
goal.
2.1.5 Domestic Crude Oil Market Developments
Domestic crude oil production and export declined, as a result of
persistent pipeline vandalism and oil theft as well as the industrial action,
embarked by employees of Addax Petroleum Development Nigeria. Thus,
Nigeria’s average crude oil production and export declined by 10.9 per
cent and 16.9 per cent to 1.14 mbpd and 0.69 mbpd in 2022Q3, from
1.28 mbpd and 0.83 mbpd, respectively, in the preceding quarter.
Nigeria’s production level fell short of its OPEC quota of 1.81 mbpd, by
668,000 bpd in 2022 Q3.


Summary
Transportation
Education
Environment

Crude Oil Production
and Export

22 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
2.2
FISCAL SECTOR DEVELOPMENTS
The fiscal performance of the Federal Government of Nigeria (FGN)
improved in 2022Q3, because of higher non-oil receipts. The FGN
retained revenue rose by 16.6 per cent above the preceding period’s,
following a 37.1 per cent increase in allocation from the Federation
Account. Nevertheless, revenue outcome remained below the quarterly
target by 54.3 per cent. Aggregate expenditure declined by 1.4 per cent
from the level in the preceding quarter and was below the quarterly
benchmark by 44.1 per cent. Consequently, fiscal deficit narrowed by
15.0 per cent and 35.1 per cent, relative to 2022Q2 and the quarterly
benchmark, respectively. Total public debt at N42,845.88 billion (or 23.4
per cent of GDP) as at end-June 2022, remained elevated but within the
40 per cent national threshold.

2.2.1 Federation Account Operations
Federation Account earnings improved, following higher non-oil receipts.
At N3,675.43 billion, gross federation revenue exceeded the level in
2022Q2 by 14.7 per cent, but fell below the benchmark of N4,598.25
billion by 20.1 per cent. The increase in revenue was attributed, largely,
to the significant jump in receipt from company income tax. In terms of
contribution to total federation revenue, non-oil revenue maintained
its dominance, at 66.5 per cent, while oil receipt accounted for the
balance of 33.5 per cent.

Oil revenue, at N1,232.54 billion, declined by 4.9 per cent relative to
the preceding quarter, driven by 48.1 per cent drop in receipt from
domestic crude oil and gas sales. This was attributed to low domestic
crude oil production associated with crude oil theft and under-recovery
on crude oil sales. Relative to the quarterly benchmark, oil earnings in
2022Q3 was 48.1 per cent short, following shortfalls in all the subcomponents of oil revenue (crude oil and gas exports, domestic crude
oil and gas sale, petroleum profit tax and royalties, and others).
In contrast, non-oil receipts at N2,442.89 billion, outperformed receipts
in 2022Q2 and the quarterly benchmark by 28.0 per cent and 9.9 per
cent, respectively. The increase was attributed, largely, to higher
collections from company income tax, as a result of the impact of the
August 31st deadline (an extension of the statutory June 30 cut-off) for
registered companies to file-in tax returns. Notably, collections from
company income tax and value-added tax, at N1,101.32 billion and
N629.58 billion, exceeded their quarterly targets by 121.6 per cent and
Drivers of Federation
Revenue

23 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption


Table 4: Federally collected Revenue and Distribution to the Three-Tiers of
Government (N Billion)

2021Q3
2022Q2 1/
2022Q3 1/
Budget
Federation Revenue (Gross)

Oil

1,142.70

1,296.24
1,232.54

2,375.11

Crude Oil & Gas Exports

PPT & Royalties

Domestic Crude Oil/Gas Sales

Others

Non-oil

Corporate Tax

Customs & Excise Duties

Value-Added Tax (VAT)

Independent Revenue of Fed. Govt.

Others*

Total Deductions/Transfers**

Federally Collected Revenue

Less Deductions & Transfers
plus:


Additional Revenue

Balance in Special Account from


Excess Crude Revenue

Non-oil Excess Revenue

Exchange Gain

Total Distributed Balance

Federal Government

Statutory

VAT

State Government

Statutory

VAT

13% Derivation

Local Government

Statutory

VAT

Source: OAGF and CBN Staff Estimates
Note: * Includes Education Tax, Customs Special Levies (Federation Account), National Technology
Development, Customs Special Levies, Solid Mineral & Other Mining revenue, and other Non-regular
earnings; ** Deductions include cost of revenue collections and JVC cash calls; while transfers entail
provisions for FGN Independent revenue and other Non-Federation revenue.

24 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
3.1 per cent, respectively. Although returns from customs and excise
duties at N463.97 billion, exceeded collections in 2022Q2 by 14.9 per
cent, it was marginally (0.1 per cent) below the benchmark. The
sustained improvement in non-oil revenue contribution to total
government revenue, reflected the meticulous implementation of the
Finance Acts 2019, 2020 and 2021; under the Strategic Revenue
Growth Initiatives (SRGIs) of the Federal Government.
A net distributable balance of N2,429.63 billion was disbursed to the
three tiers of government, after accounting for statutory deductions
and transfers, as well as additional revenue from excess crude. Of this
amount, the Federal Government got N988.10 billion, while State and
Local governments received N749.72 billion and N557.19 billion,
respectively. The balance of N134.62 billion was distributed to oilproducing states as 13.0 per cent Derivation Fund. Although total
disbursement to the federating units was 18.9 per cent higher than the
sharing in the preceding quarter, it was 32.5 per cent below projection.

2.2.2 Fiscal Operations of the Federal Government
The retained revenue of the FGN improved, due, largely, to increased
allocation from the Federation Account. At N1,227.33 billion, estimated
retained revenue of the FGN was above the receipts in the preceding
quarter by 16.6 per cent, but remained below the target by 54.3 per
cent, reflecting shortfalls in oil receipts (Table 5).

Table 5: FGN Retained Revenue (N Billion)


2021Q3
2022Q2
2022Q3
Budget
FGN Retained Revenue


Federation Account


VAT Pool Account


FGN IR


Excess Oil Revenue


Excess Non-Oil


Exchange Gain


Others*


Source: Compiled from OAGF figures
Note: * Others include revenue from Special Accounts, Special Levies and share of dividend.
The Budget figures are provisional, IR = Independent Revenue

Federal Government
Retained Revenue

25 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
Driven by a reduction in recurrent spending, the provisional aggregate
expenditure of the FGN fell by 36.2 per cent and 43.5 per cent, relative to
2022Q2 and the quarterly budget, respectively. Provisional aggregate
expenditure of the FGN amounted to N2,419.31 billion in the review
period. A breakdown shows that recurrent expenditure, capital
expenditure, and transfers accounted for 73.8 per cent, 17.2 per cent
and 9.0 per cent of total expenditure, respectively, (Figure 13).
Figure 17: Federal Government Expenditure (N Billion)

Source: CBN Staff Estimates and compilation from OAGF data


The disproportionate decline in FGN expenditure, relative to revenue,
resulted in a contraction in the fiscal deficit. At N1,191.98 billion, the
provisional fiscal deficits of the FGN was 56.5 per cent and 25.3 per cent
below the level in the preceding period and the quarterly budget,
respectively. The observed narrower deficit is indicative of subsisting
fiscal constraints (Table 6).


2021Q3
2022Q2
2022Q3
Budget
Aggregate expenditure
Recurrent
Capital
Transfers
Table 6: Fiscal Balance (N Billion)

2021Q3
2022Q2
2022Q3
Budget
Retained revenue

Aggregate expenditure

Recurrent

Non-debt

Debt Service

Capital

Transfers

Primary balance

Overall balance

Source: Compiled from OAGF figures and CBN Staff Estimates
Note: The figures are provisional.
Overall Fiscal Balance
Federal Government
Expenditure

26 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption

Government borrowing, in the review period, was anchored on the
Medium-term Debt Strategy 2020-2023 (MTDS 2020- 2023) of the FGN.
Total public debt outstanding at N42,845.88 billion (or 23.4 per cent of
GDP) at end-June 2022, increased by 3.0 per cent and 20.8 per cent,
relative to end-March 2022 and end-June 2021; but remained within
the 40.0 per cent threshold. Domestic debt accounted for 61.2 per cent
of total debt, while external debt constituted 38.8 per cent. Of the
consolidated public debt outstanding. FGN (including State
governments’ external debt, which are contingent liabilities of the
FGN’s) accounted for N37,564.60 billion (87.7 per cent), while State
governments’ domestic debt stock made up the balance of N5,281.28
billion (12.3 per cent).
Of the total FGN debt, domestic debt stood at N20,948.94 billion (55.8
per cent of total debt), while external debt amounted to N16,615.66
billion (44.2 per cent of total debt). Further analysis shows that, FGN
bond issues maintained its dominance, accounting for 72.5 per cent of
the total domestic debt, while Treasury Bills (21.5 per cent), FGN Sukuk
(2.9 per cent), Promissory Notes (2.5 per cent), and others4 (0.6 per
cent) constituted the balance. With regard to holdings of external debt,
Multilateral, Commercial and Bilateral loans accounted for 47.8 per
cent, 39.0 per cent and 11.7 per cent, respectively, while ‘other’ loans
constituted 1.5 per cent.
Debt service obligations in 2022Q2, amounted to N912.71 billion,
compared with N897.17 billion in 2022Q1. The rise was attributed to
principal repayments and redemption of matured debt obligations.

Figure 18: FGN External and Domestic Debt Composition (N Billion)


4 This includes Treasury bonds (0.4 per cent), Green bond (0.1 per cent) and Special
FGN Savings bond (0.1 per cent).

2021 Q2
2021 Q3
2021 Q4
2022 Q1
2022 Q2
External Debt
Domestic Debt
Total Debt
Federal Government
Debt

27 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
Source: Compiled from DMO Figures

Figure 19: Composition of Domestic Debt Stock by Instrument

Source: Compiled from DMO figures

Figure 20: Composition of External Debt Stock by Instrument

Source: Compiled from DMO figures


FGN Bonds
72.5%
T/Bills
21.5%
FGN Sukuk
2.9%
Promissory
notes
2.5%
Others
0.6%
Multilateral
47.8%
Commercial
39.0%
Bilateral
11.7%
Others
1.5%

28 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
2.3
MONETARY AND FINANCIAL SECTOR
The financial system remained safe, and sound as financial soundness
indicators were within the regulatory benchmarks. To moderate the
growth of money supply and help rein in inflation, the Bank maintained
a tight monetary policy stance that affected discretionary liquidity in the
banking system. On the Nigerian Exchange (NGX) Limited, activities
were bearish, a reflection of portfolio switching.

2.3.1 Monetary Developments
Reserve money increased in 2022Q3, owing to the improved confidence
in the banking system. At N15,007.59 billion, reserve money grew by 8.3
per cent over the level at end-December 2021. The growth was mainly
accounted for by 18.1 per cent increase in liabilities to Other Depository
Corporations (ODCs), while currency-in-circulation (CIC) declined by 2.9
per cent in the review period (Table 7).
Table 7: Components of Reserve Money (N Billion)

2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
Monetary Base

Currency-inCirculation
Naira and coins
eNaira


2,837.06
2,837.06
-

3,325.16
3,324.22
0.94


3,245.60
3,244.60
1.00

3,255.56
3,254.20
1.36

3,228.75
3,227.27
1.48
Liabilities to ODCs

Money Multiplier
(M3)

Source: Central Bank of Nigeria

The money multiplier at 3.3 in the period, amplified the reserve money
to yield an expansion in broad money supply (M3). Consequently, broad
money supply at N49,333.08 billion, grew by 11.00 per cent over level
at end-December 2021. The annualised growth of 14.67 per cent was
well within the programme target of 14.92 per cent.
On the assets side, growth in broad money (M3) was due to the increase
in Net Domestic Assets (NDA), which compensated for the contraction in
Net Foreign Assets (NFA). Net Domestic Assets (NDA), grew by 27.8 per
cent, attributed to the 29.9 per cent growth in domestic claims. The
upward movement in domestic claims was hinged on the 64.9 and 16.0
per cent rise in net claims on central government and claims on other
sectors, respectively. The growth in net claims on central government,
which contributed 20.2 percentage points to the growth in M3, was due
Reserve Money
Broad Money
Summary

29 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
to the increase in loans, while the rise in claims on other sectors
resulted, largely, from the 16.8 per cent increase in claims on the
private sector, which contributed 9.0 percentage points to the growth
in M3. Conversely, the Net Foreign Assets (NFA) of depository
corporations declined by 52.0 per cent, due to the rise in liabilities to
non-residents, occasioned by increased foreign credit lines and
deposits.
Table 8: Money and Credit Growth over preceding December (%)
Source: Central Bank of Nigeria


Contribution
to M3 growth
(Sep-22)
Sep-21
Jun-22
Sep-22

Annualise
d rate

Benchmark
Net Foreign Assets

Claims on Nonresidents

Liabilities to Nonresidents
11.72


Net Domestic Assets

Domestic Claims

Net Claims on Central
Government

Claims on Central
Government

Liabilities to Central
Government

Claims on Other
Sectors

Claims on Other
Financial
Corporations

1.38


Claims on State and
Local Government

Claims on Public
Nonfinancial
Corporations

Claims on Private
Sector

Total Monetary
Assets (M3)

Currency Outside
Depository
Corporations

Transferable Deposits

Narrow Money (M1)

Other Deposits

Broad Money (M2)


Securities Other than
Shares


Total Monetary
Liabilities (M3)
11.00
3.97
10.02

11.00


14.67

14.92

30 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
From the liability side, transferable deposits and other deposits grew
by 22.2 per cent and 6.6 per cent, respectively, and accounted for the
growth in total monetary liabilities. In terms of proportional
contribution, other deposits were 3.9 percentage points of total
monetary liabilities, while transferable deposits were 7.5 percentage
points. Currency outside depository corporations declined by 7.1 per
cent, with a negative contribution of 0.5 percentage points to the
growth in total monetary liabilities. The fall in currency outside
depository corporations, reflected the increased adoption of electronic
means of payment in the economy.

2.3.2 Credit Utilisation
Sustained efforts to boost productivity and output in the real economy
spurred growth in sectoral credit in the review quarter. Total credit
utilisation by sectors of the economy grew by 5.1 per cent to
N28,204.27 billion in 2022Q3 from N26,846.40 billion in 2022Q2. A
breakdown shows that credit to the Agriculture, Industry, and Services
sectors increased to N1,658.04 billion, N11,478.45 billion and
N15,067.79 billion, from N1,630.38 billion, N10,591.87 billion and
N14,624.15 billion, respectively, in the preceding quarter. An analysis
of the relative share of the sectors in total credit utilization revealed
that the shares of services and industry sectors stood at 53.4 per cent
and 40.7 per cent, respectively, while agriculture accounted for the
balance of 5.9 per cent (Table 9).
Table 9: Relative Share in Total Sectoral Credit (Per cent)

2021Q3
2022Q2
2022Q3
Agriculture
5.27
6.07
5.88
Industry
42.36
39.46
40.70
Of which; Construction
5.00
4.39
4.15
Services
52.37
54.47
53.42
Of which; Trade/General
Commerce
6.29

7.13

7.12

Source: Central Bank of Nigeria

The volume of consumer credit extended by Other Depository
Corporations (ODCs) grew in 2022Q3. Consumer credit outstanding rose
by 24.3 per cent to ₦2,402.67 billion at end-September 2022, from
₦1,933.18 billion at the end of the second quarter. The share of
consumer credit in total private sector credit grew by 1.5 percentage
points to 8.7 per cent, from 7.2 per cent in the preceding quarter
(Figure 21).
Consumer Credit
Sectoral
Utilisation of
Credit

31 | P a g e Central Bank of Nigeria Economic Report
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Figure 21: Consumer Credit Outstanding

Source: Central Bank of Nigeria

Analysis of consumer loans revealed a net increase of 3.5 percentage
points in personal loans, relative to the level in the preceding quarter,
while retail loans fell by the same proportion. Personal loans
maintained its dominance, accounting for 76.9 per cent of total loans,
while retail loans accounted for the remaining share of 23.1 per cent
(Figure 22).
Figure 22: Composition of Consumer Credit

Source: Central Bank of Nigeria


2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
Per cent (%)
N'Million
Consumer Credit (LHS)
Consumer Credit as a Share of Private Sector Credit (RHS)
-

2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
Personal

Retail

Per cent

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2.3.3 Money Market Developments
Liquidity in the banking system marginally declined in the review period.
Primary market sales of securities (₦1,960.98 billion) and OMO
auctions (₦70.00 billion) culminated in a withdrawal of ₦2,030.98
billion from the banking system, which outweighed the injection of
₦1,502.92 billion in matured securities. This resulted in a net
withdrawal from the banking system by N528.06 billion. Consequently,
the average banking system liquidity declined by 1.8 per cent to
₦183.43 billion from ₦186.77 billion in the preceding quarter.
There were OMO auctions with maturities of 103 to 362 days in the
review quarter. Total amount offered, subscribed, and allotted,
declined to ₦120.00 billion, ₦327.87 billion, and ₦70.00 billion,
respectively, from ₦140.00 billion, ₦983.59 billion, and ₦140.00 billion
in the preceding quarter (Figure 23).
Figure 23: Open Market Operation (N Billion)

Source: Central Bank of Nigeria

Activities in the standing facility window slowed in 2022Q3. The total
request for SLF moderated by 4.7 per cent to ₦3,448.78 billion, with a
daily average of ₦57.48 billion, compared with ₦3,619.12 billion and a
daily average of ₦77.00 billion in the preceding quarter. The
transactions at the Standing Deposit Facility (SDF) window showed
similar trend, with a decline of 40.0 per cent to ₦536.50 billion from
₦894.88 billion in the preceding quarter, reflecting the liquidity
condition in the banking system.

Offer
Subscription
Allotment
Repayment
2021Q3 (N'Billion)

2022Q2 (N'Billion)

2022Q3 (N'Billion)

N' Billion
Standing Facility
Windows
Liquidity
Management
Open Market
Operations

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Investments in the Nigerian Treasury Bills (NTBs) and FGN Bond slowed
in the review quarter Despite the increase in stop rate to 7.38 per cent
(±4.63), from 4.09 per cent (±2.35) in the preceding quarter, total
subscriptions in NTBs declined by 25.0 per cent to ₦1,494.33 billion
from ₦1,992.80 billion in the preceding quarter, reflecting the tight
liquidity condition. Analysis of subscriptions shows investors’
preference for the 364-day tenored instruments, which accounted for
₦1,434.74 billion or 96.0 per cent of total in 2022Q3. The preference is
underpinned by market expectations of a lower future inflation.

Figure 24: Primary Market NTBs, 2022Q3 (N Billion)

Source: Central Bank of Nigeria

Similarly, subscriptions for the FGN Bonds dipped in 2022Q3 by 58.6
per cent to N635.82 billion from N1,537.40 billion in the preceding
quarter (Figure 24).
Key short-term interest rates trended in tandem with constrained
liquidity conditions in the market. Average inter-bank call and OpenBuy-Back rates were 14.0 per cent and 12.9 per cent respectively,
compared with 9.4 per cent and 9.3 per cent in the preceding quarter.
Similarly, other rates such as the 30-day and 90-day NIBOR trended
upward, at averages of 11.5 per cent and 11.7 per cent compared with
8.7 per cent and 9.6 per cent, respectively, (Figure 25).


2021Q3 (N'Billion)
2022Q2 (N'Billion)
2022Q3 (N'Billion)
Offer
1,021.98
918.92
1,369.37
Subsription
2,807.29
1,992.80
1,494.33
Allotment
1,390.01
1,015.56
1,133.47
Repayment
1,021.98
918.92
1,369.37
N' Billion
Primary Market
Interest Rate
Development

34 | P a g e Central Bank of Nigeria Economic Report
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This document is for CBN internal consumption
Figure 25: Developments in Short-term Interest Rates
Source: Central Bank of Nigeria
Similarly, the average prime and maximum lending rates increased
marginally by 0.2 and 0.4 percentage points to 12.2 per cent and 28.0
per cent, respectively. Likewise, the average term-deposit rate
increased by 1.8 percentage points to 5.2 per cent, from 3.4 per cent,
leading to narrowing of the spread between the average term deposit
and maximum lending rates to 22.8 percentage points from 24.2
percentage points in the preceding quarter. The narrowing of the
spread reflected improved efficiency in financial intermediation (Figure
26).
Figure 26: Trend in Average Deposit and Lending Rates

Source: Central Bank of Nigeria; Note: PLR = Prime lending rate, MXLR = Maximum
lending rate, AVTD = Average term deposit rate, SPRD = Spread between AVTD and
MXLR


2021Q3
(%)
2021Q4
(%)
2022Q1
(%)
2022Q2
(%)
2022Q3
(%)
Interbank Call rate

OBB

NIBOR 30-day

NIBOR 90-day

MPR


Per cent (%)

2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
Percentage Points
Per cent (%)
PLR
MXLR
AVTD
SPRD (RHS)

35 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
2.3.4
Capital Market Developments
Activities on the Nigerian Exchange (NGX) Limited were bearish in the
review period, occasioned by portfolio switching. The aggregate market
capitalisation decreased by 1.3 per cent to N49,533.09 billion from
N50,172.09 billion in 2022Q2. A disaggregation of the components
indicates that equities and Exchange Traded Funds (ETF) shed 5.3 per
cent and 8.2 per cent, to N26,451.40 billion and N6.84 billion,
respectively. The debt market capitalisation, however, rose by 3.8 per
cent to N23,074.85 billion. The equities, debt and ETF components of
the market capitalisation constituted 55.4 per cent, 46.6 per cent and
0.01 per cent, respectively (Figure 27).

The All-Share Index (ASI), which opened at 51,829.67 index points at
the beginning of the review quarter, closed at 49,024.16 index points,
a decline of 5.4 per cent. The fall in the NGX-ASI was occasioned by
flight to profit as investors moved away from stocks to more profitable
fixed income investments.

Figure 27: Aggregate Market Capitalisation and All-Share Index

Source: Nigeria Exchange (NGX) Limited


In the review quarter, one (1) sectoral index trended upward, sixteen
(16) indices trended downward while one (1) remained flat relative to
their levels in the preceding quarter, underpinning the bearishness of
the market.


Q3-20
Q4-20
Q1-21
Q2-21
Q3-21
Q4-21
Q1-22
Q2-22
Q3-22
Index Points
N billion
Aggregate Market Capitalisation (LHS)
All Share Index (RHS)
Market
Capitalisation
NGX All Share
Index

36 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption

Table 10: Nigeria Exchange (NGX) Limited Sectorial Indices
NGX Indices
2022Q2
2022Q3
Changes (%)
NGX-Growth
1,487.20
1,659.11
11.6
NGX-Asem
658.99
658.99

NGX-Main Board
2,274.79
2,251.59
-1
NGX-Sovereign Bond
854.22
837.85
-1.9
NGX-Banking
397.79
379.2
-4.7
NGX-MERI Value
2,167.09
2,061.42
-4.9
NGX-Insurance
178.33
168.6
-5.5
NGX-Consumer Goods
623.99
584.68
-6.3
NGX-LOTUSISLM
3,251.25
3,039.72
-6.5
NGX-Oil & Gas
545.34
508.26
-6.8
NGX-30
1,887.62
1,746.95
-7.5
NGX-Afri Div yield
3,191.06
2,911.40
-8.8
NGX-Pension
1,823.58
1,659.38
-9
NGX-Afri Bank Value
925.95
837.4
-9.6
NGX-MERI Growth
2,364.94
2,135.97
-9.7
NGX-Premium
4,924.13
4,438.40
-9.9
NGX-CG
1,319.70
1,177.21
-10.8
NGX-Industrial Goods
2,152.24
1,773.22
-17.6
Source: Nigeria Exchange (NGX) Limited

The total turnover, volume, and value, of traded securities on the
Exchange fell by 77.3 per cent and 68.1 per cent, to 12.30 billion shares
and N154.67 billion, respectively, in 246,966 deals, from 54.27 billion
shares, valued at N485.41 billion, in 320,759 deals, at the end of
2022Q2 (Figure 28).

Figure 28: Volume and Value of Traded Securities
Source: Nigeria Exchange (NGX) Limited.


Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22
N Billion
Billion
Volume of traded securities (LHS)
Value of traded securities (RHS)

37 | P a g e Central Bank of Nigeria Economic Report
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This document is for CBN internal consumption
There were twelve (12) new listings and 4 supplementary listings on the
Exchange, comprising 7 bonds, 3 script dividends, 2 ordinary shares
placement, 2 rights issue, 1 derivative and 1 Zero Coupon Unsecured
Subordinated Irredeemable Convertible (Table 11).

Table 11: Listings on the Nigerian Exchange Limited in 2022Q3
Company/ Security
Shares Units
Remarks
Listing
Dangote Cement PLC
11.85% APR 2027
Tranche A 4,269,000
units of N4,269,000,000 5
Year Bonds
Senior unsecured
Bonds
New
Dangote Cement PLC
12.35% APR 2029
Tranche B 23,335,000
units of N23,335,000,000
7 Year Bonds
Senior unsecured
Bonds
New
Dangote Cement PLC
13% APR 2032
Tranche C 88,396,000
units of N88,396,000,000
10 Year Bonds
Senior unsecured
Bonds
New
8.375% FGN MAR

1,250,000 units of
$1,250,000,000.00 USD
Series 12 Euro
Bond
New
FGN Roads Sukuk
Company 1 Plc
250 million units of N250
Billion 13% Ijarah
Sovereign Sukuk 10year
Bond
Unsecured Bonds
New
Nigerian Breweries
PLC
145,074,002 ordinary
shares of 50k each
Scrip Dividend
Suppl.
Lagos Free Zone
Company 13.25%
LFZC GTEED SEP

Tranche A of 25,000,000
units of
N25,000,000,000.00 20
Year Bonds
Senior
guaranteed
infrastructure
Bonds
New
Capital Hotels Plc
1,611,995,510 units of 50
Kobo per share
Ordinary shares
(Private
placement)
New
Neimeth
International
Pharmaceuticals Plc
2,373,947,500 units of
N1.55 at 5 for every 4
shares
Ordinary shares
New
UAC of Nigeria
additional 44,835,076
ordinary shares of
Scrip Dividend
Election
Suppl.
50 kobo each
Scheme
ABC Transport Plc
900,000 unit at N1,000 at
par value
Senior Secured
Fixed Rate Bonds
New
ABC Transport Plc
734,921,774 ordinary
shares of 50 Kobo each
Rights Issue
Suppl.
NGX30H3 and
NGXPENSIONH3

Derivative
New
Chemical and Allied
Products Plc
26,487,980 ordinary
shares of
CAP’s Scrip
Dividend Election
Scheme
Suppl.
50 kobo each
McNichols
Consolidated Plc
531,242,609 ordinary
shares of 50 kobo each at
50 kobo per share
Proposed Rights
Issue
New
Tranzact
International Plc
2,565,433,333 ordinary
shares of 50 Kobo each
Zero Coupon
Unsecured
Subordinated
Irredeemable
Convertible
Debenture Stock
to
New
Equity
Source: Nigeria Exchange (NGX) Limited


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2.3.5 Financial Soundness Indicators
The banking industry remained safe and sound, as key financial
soundness indicators were within regulatory benchmarks. The industry
Capital Adequacy Ratio (CAR) at 13.8 per cent, remained above the 10.0
per cent threshold for banks with national/regional authorisation.
However, compared to 14.1 per cent in the preceding quarter, the CAR
declined marginally by 0.3 percentage point, attributed to the increase
in risk-weighted assets of banks.
Similarly, at 4.9 per cent, the banks’ asset quality, measured by the ratio
of non-performing loan (NPL), improved by 0.1 percentage point below
the 5.0 per cent prudential benchmark and the level in the preceding
quarter. This was driven by sustained loan recoveries and policy
support by the Bank.
The Industry Liquidity Ratio (LR) increased by 2.5 percentage points to
56.7 per cent, compared with 54.2 per cent in the preceding quarter,
showing an increase in the stock of liquid assets held by banks. The LR
was above the regulatory benchmark of 30.0 per cent.


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2.4 EXTERNAL SECTOR DEVELOPMENTS
2.4.1. External Balance
Despite the prevailing global economic conditions which weighed on the
external sector performance, the current account maintained a surplus
position of US$1.89 billion. However, the financial account recorded a
lower net incurrence of financial liabilities of US$2.07 billion, reflecting
the impact of monetary tightening across major advanced economies.
The external reserves at end-September 2022 stood at US$37.51 billion,
compared with US$39.16 billion at end-June 2022. The level could
finance 9.9 months of imports of goods only, or 7.6 months of imports
of goods and services, well above the international standard of 3
months import cover. The average exchange rate of the naira per US
dollar at the I&E window, was ₦426.34/US$, compared with
₦415.70/US$, in 2022Q2.
2.4.2. Current and Capital Accounts Developments
Although the current account recorded a surplus position in 2022Q3, it
narrowed compared to the position in the preceding quarter. The current
account surplus declined to US$1.89 billion (1.7 per cent of GDP), from
US$5.07 billion (4.7 per cent of GDP). The out-turn was due to
significant decline in export earnings, and a wider primary income
account deficit, on account of higher repatriation of dividends and
profits (Figure 29).
Figure 29: Current Account Balance (US$ Billion)
Source: Central Bank of Nigeria

The performance of exports was adversely affected by developments in
the international markets and domestic constraints. Crude oil prices
declined following softer global demand, and concerns about the
outlook of global growth, as central banks continued to raise interest
rates to contain inflation. Estimated export earnings decreased by 28.9
per cent to US$12.92 billion in 2022Q3, compared with US$18.18 billion
Summary
Export
Performance

Q1 2022
Q2 2022
Q3 2022
US$ Billion

40 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
in the preceding period. A breakdown shows that crude oil and gas
exports decreased by 32.4 per cent to US$10.95 billion, relative to
US$16.21 billion in the preceding quarter.

The development was driven majorly by the reduction in Bonny Light
prices and domestic oil production. The price of Bonny Light fell to
US$106.73 per barrel, from US$118.34, while production dropped to
1.14mbpd, compared with 1.28mbpd in the preceding quarter.
Similarly, non-oil, including electricity export receipts decreased
marginally by 0.03 per cent to US$1.97 billion. In terms of share in total
exports, crude oil and gas export receipts remained dominant,
accounting for 84.8 per cent while non-oil exports accounted for the
balance.

Rising global inflation and the persisting supply chain disruptions
subdued merchandise imports in the review period. Provisional data
revealed that merchandise imports fell by 8.9 per cent to US$11.36
billion in 2022Q3, relative to US$12.48 billion in the preceding quarter.
The development was observed, majorly, in the importation of non-oil
products, which declined by 17.3 per cent to US$7.63 billion, from
US$9.22 billion. Conversely, import of petroleum products increased by
14.6 per cent to US$3.73 billion, from US$3.26 billion. The increase in
petroleum products import was to cover domestic supply shortages in
the period. The share of non-oil import remained dominant, accounting
for 67.2 per cent of the total, while petroleum products constituted the
balance of 32.9 per cent.
A breakdown of non-oil import by sector revealed that import of raw
materials and machinery for industrial use accounted for the largest
share of 50.3 per cent, reflecting inclination towards import
substitution in the economy. Other sectoral import shares include
manufactured products (20.8 per cent); food products (13.2 per cent);
oil (7.3 per cent); transport (3.6 per cent); mineral (3.5 per cent); and
agricultural products (1.2 per cent).
The deficit in the services account narrowed, mainly, because of the
decline in travels and transport during the review period. The deficit in
the services account narrowed by 28.2 per cent to US$2.58 billion, from
US$3.59 billion in the preceding quarter. The lower deficit was as a
result of 33.6 per cent and 27.9 per cent decline in transport and travel
services, respectively. A breakdown of the deficit indicates that
payment for services amounted to US$3.37 billion, while receipts from
services was US$0.80 billion. Further analysis shows that payments for
Services
Merchandise
Import

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Third Quarter 2022
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This document is for CBN internal consumption
transportation and travels stood at US$1.49 billion and US$0.75 billion,
respectively, accounting for 44.2 per cent and 22.1 per cent of the total.
Other business services at US$0.67 billion, accounted for 20.0 per cent.
Payments for insurance and pensions was US$0.13 billion, constituting
3.9 per cent. Payments for telecommunications, government goods
and services, financial services, and charges for the use of intellectual
properties were US$0.12 billion (3.5 per cent), US$0.08 billion (2.3 per
cent), US$0.07 billion (2.2 per cent), US$0.06 billion (1.9 per cent) of
the total, respectively, (Figure 30).

Figure 30: Share of Service Out-Payments (per cent)

Source: Central Bank of Nigeria
Receipts from services declined by 35.9 per cent to US$0.80 billion,
from US$1.24 billion the in the preceding quarter. This was due mainly,
to decline in receipts from transport, travels and financial services by
64.5 per cent, 14.5 per cent and 42.4 per cent, respectively. In terms of
share in total, receipts from travels, transportation and financial
services stood at US$0.25 billion, US$0.17 billion and US$0.17 billion,
and accounted for 31.4 per cent, 21.8 per cent and 21.7 per cent,
respectively. Government services, telecommunications, insurance &
pensions, and other businesses, at US$0.11 billion, US$0.06 billion,
US$0.02 billion and US$0.01 billion, represented 14.0 per cent, 7.8 per
cent, 1.8 per cent and 1.4 per cent, respectively, (Figure 31).
Transport
44.2%
Travel
22.1%
Insurance and
pension services
3.9%
Government services
2.3%
Financial services
2.2%
charges for the use of
intellectual property
n.i.e
1.9%
Telecommunications,
computer, and
information services
3.5%
Other business
services
20.0%

42 | P a g e Central Bank of Nigeria Economic Report
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Figure 31: Share of Services Receipts (per cent)

Source: Central Bank of Nigeria

The deficit in the primary income account widened as repatriation of
dividends increased in the review period. The deficit in the primary
income account widened by 10.9 per cent to US$2.91 billion in 2022Q3,
compared with US$2.62 billion in the preceding quarter. This reflected
higher repatriation of dividends and profits, as well as increased
interest payments on loans. The surplus in the compensation of
employees sub-account decreased by 2.4 per cent to US$0.05 billion in
the review period, compared with the level in the preceding quarter
(Figure 32).

Figure 32: Primary Income Balance (US$ Billion)

Source: Central Bank of Nigeria

Transport
21.8%
Travel
31.4%
Insurance and pension
services
1.8%
Government services
14.0%
Financial services
21.7%
Telecommunications,
computer, and
information services
7.8%
Other business
services

2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
U$ BILLION
Primary Income

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This document is for CBN internal consumption
The gains from remittance policies positively influenced the secondary
income account, leading to a higher surplus position. The surplus in the
secondary income account increased to US$5.82 billion in the review
period, compared with US$5.58 billion in the preceding quarter. The
development was due to an increased inflow of remittances to US$5.06
billion, from US$4.95 billion in the preceding quarter. Similarly, general
government transfers in the form of aids and grants rose by 7.3 per cent
to US$0.78 billion, from US$0.72 billion in 2022Q2 (Figure 33).

Figure 33: Secondary Income Balance and Remittances Inflow (US$ Billion)

Source: Central Bank of Nigeria

2.4.3. Financial Account
The financial account recorded a lower net incurrence of financial
liabilities, occasioned by tight financial conditions, as monetary
authorities continued to hike interest rates to rein in inflation. The
financial account recorded a net incurrence of liabilities of US$2.07
billion (1.9 per cent of GDP), relative to US$3.16 billion (2.8 per cent of
GDP) in the preceding quarter.
An Inflow of US$2.86 billion was recorded in 2022Q3, relative to
US$4.05 billion in the preceding quarter. The decline was due largely,
to lower purchase of equity & debt securities by non-resident investors,
as monetary policy normalisation created safer havens for investors
abroad. FDI recorded a lower divestment of US$0.96 billion, relative to
US$1.59 billion in the preceding quarter, reflecting a lower drawdown
from reserves of companies. Conversely, portfolio investment inflow
decreased by 4.1 per cent to US$1.61 billion from US$1.68 billion in the

2021Q2
2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
Secondary Income Balance
Workers' Remittances
Secondary Income
Financial Account
Developments
Net Incurrence of
Liability

44 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
previous quarter. The decline was as a result of a 6.8 per cent decrease
in investment in short-term debt securities by non-resident investors.
Similarly, inflow of “other investment” fell by 25.6 per cent to US$2.20
billion, from US$2.96 billion in the preceding period.
Aggregate financial assets rose to US$2.21 billion in 2022Q3, compared
with US$0.89 billion in the preceding quarter, occasioned by the
acquisition of other investment assets, particularly, increased holdings
of foreign currency and deposits in foreign banks by the private sector.
Foreign direct investments recorded a lower disposal of US$0.12 billion,
relative to US$0.20 billion in the preceding quarter. On the other hand,
portfolio investment assets recorded a lower acquisition of US$0.15
billion, relative to US$0.38 billion, as a result of the lower purchase of
debt securities by resident investors. On the contrary, “Other
investment” assets witnessed an acquisition of US$2.19 billion,
compared with the disposal of US$0.29 billion in the preceding quarter,
owing to increase in foreign currency holdings by the private sector.
Furthermore, reserve assets recorded a reduction of US$1.43 billion,
relative to US$0.89 billion in the preceding quarter, following the Bank’s
sustained efforts to ensure liquidity in the foreign exchange market.
2.4.4. External Debt
Nigeria's public external debt surged in the review period, owing to new
borrowings. Nigeria’s public sector external debt stock and external
debt service payment at end-June 2022 stood at US$40.06 billion (9.2
per cent of GDP) and US$0.60 billion, respectively. A breakdown
showed that the multilateral loans, from the World Bank, International
Monetary Fund, and African Development Bank Groups, amounted to
US$19.16 billion, accounting for 47.8 per cent of the total. A total of
US$15.62 billion or 40.0 per cent of the total was borrowed from
commercial sources in the form of Euro and Diaspora Bonds. Loans
from bilateral sources was US$4.70 billion, or 11.7 per cent of the total,
while promissory notes were US$0.59 billion, or 1.5 per cent of the total
debt stock.

The external debt service payment stood at US$0.60 billion at end-June
2022, relative to US$0.69 billion in the preceding quarter. A breakdown
showed that the principal repayment was US$0.38 billion, accounting
for 55.1 per cent of the entire payment. Interest payment totalled
US$0.20 billion, or 29.0 per cent of the total, while other payments
made up the balance. An analysis of interest payments show that
interest payment on commercial borrowings accounted for 80.0 per
cent of the total at US$0.16 billion, while multilateral institutions
Public Sector
External Debt
Net Acquisition of
Asset

45 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
accounted for 10.0 per cent of the total or US$0.02 billion. Interest
payments on bilateral loans accounted for the balance.

2.4.5. International Investment Position (IIP)
Nigeria's International Investment Position (IIP) recorded a net financial
liability of US$76.16 billion at end-September 2022. The stock of financial
assets decreased by 2.2 per cent to US$105.93 billion at endSeptember 2022, from US$108.34 billion at end-June 2022. This was
due, largely, to a 4.2 per cent reduction in external reserves assets, as
the Bank continued to stabilise the foreign exchange market. Portfolio
investment assets increased by 4.4 per cent to US$3.46 billion.
Similarly, direct investment assets increased marginally, by 0.9 per cent
to US$13.42 billion, driven by lower disposal of equity and direct
investment fund shares by resident investors. Other investment assets
also increased by 4.4 per cent to US$51.54 billion in the review period,
from US$49.35 billion in 2022Q2.

The stock of financial liabilities representing foreign investors' claims on
the economy decreased by 0.2 per cent to US$182.09 billion at endSeptember 2022, from US$182.43 billion at end-June 2022. The
development reflected an increase in the stock of direct investment,
relative to the level at end-June 2021. The stock of portfolio and other
investment liabilities, however, increased by 4.3 per cent and 4.0 per
cent, to US$38.64 billion and US$57.12 billion, respectively, from
US$37.03 billion and US$54.92 billion at end-June 2022.

2.4.6. International Reserves
The international reserves remained above the standard benchmark of
3.0 months of import cover. The international reserves stood at
US$37.39 billion at end-September 2022, relative to US$39.16 billion at
end-June 2022. The level of external reserves could cover 6.5 months
of import for goods and services or 9.0 months of import for goods only.


46 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
Figure 34: External Reserves and Months of Import Cover

Source: Central Bank of Nigeria

A breakdown of the external reserves by ownership shows that, the
share of the CBN was US$35.67 billion (95.39 per cent); Federal
Government, US$1.72 billion (4.61 per cent); while the Federation
accounted for the balance of US$0.58 million (0.00 per cent). In terms
of currency composition, the US dollar was US$28.73 billion, (76.8 per
cent); Special Drawing Rights, US$4.81 billion (12.9 per cent); Chinese
Yuan, US$3.46 billion (9.2 per cent); GB Pounds, US$0.18 billion (0.5 per
cent); Euro, US$0.21 billion (0.6 per cent); and other currencies
accounted for the balance.

2.4.7 Foreign Exchange Flows through the Economy
The economy recorded a net inflow of US$7.29 billion in 2022Q3,
compared with US$9.25 billion in the preceding quarter. Foreign
exchange inflow into the economy decreased by 14.2 per cent to
US$17.22 billion, from US$20.08 billion in the preceding quarter. The
development was driven by the 17.0 per cent and 12.1 per cent
decrease in inflow through the CBN and the autonomous sources,
respectively. Foreign exchange outflow through the economy
decreased by 8.3 per cent to US$9.93 billion, from US$10.83 billion in
2022Q2.
Foreign exchange inflow through the Bank, at US$7.28 billion, fell below
the US$8.77 billion in the preceding quarter. A disaggregation shows
that receipts from crude oil related sources increased by 7.2 per cent
to US$2.68 billion, relative to the value in 2022Q2. In contrast, receipts

-

Jul-21
Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
US$ Billion
External Reserves - LHS
Months of Import (Goods only)
Months of Import (Goods and Services)
Foreign Exchange
Flows through the
Economy

47 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
from non-oil sources fell to US$4.60 billion from US$6.27 billion in the
preceding quarter. Foreign exchange inflow through autonomous
sources also decreased to US$9.94 billion from US$11.31 billion in the
preceding period, driven mainly, by decline in total Over-the-Counter
(OTC) purchases.
However, outflow through the Bank, at US$8.54 billion, increased by
1.1 per cent, relative to US$8.45 billion in the preceding quarter,
attributed, largely, to increase in external debt service and third-party
MDA transfers. Autonomous outflow also fell by 41.6 per cent to
US$1.39 billion, on account of decreased invisible imports.
Consequently, autonomous sources recorded a net inflow of US$8.55
billion in the review period, compared with US$8.94 billion in 2022Q2.
However, a net outflow of US$1.26 billion was recorded through the
Bank, compared to a net inflow of US$0.32 billion in the preceding
quarter. Thus, resulting in a net inflow of US$7.29 billion into the
economy in 2022Q3.
Figure 35: Foreign Exchange Transactions through the Economy 2022Q3
(US$ billion)

Source: Central Bank of Nigeria

2.4.8 Transactions in the Foreign Exchange Market
Total foreign exchange sales to authorised dealers by the Bank decreased
in the review period. Foreign exchange sales at US$4.18 billion,
decreased by 13.1 per cent, below the level in the preceding quarter. A
disaggregation shows that, foreign exchange sales at the Secondary
Market Intervention Sales (SMIS) and Investors’ and Exporters’ (I & E)
windows, decreased by 10.5 per cent and 4.3 per cent to US$1.83
billion and US$0.79 billion, respectively. Similarly, matured swap
contracts fell by 48.9 per cent to US$0.57 billion, relative to 2022Q2.
Q3 2021
Q2 2022
Q3 2022
Inflow
30.20
20.08
17.22
Outflow
10.22
10.83
9.93
Netflow


Inflow
Outflow
Netflow
Spot
Transactions

48 | P a g e Central Bank of Nigeria Economic Report
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ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
However, sales at the Small and Medium Enterprises (SMEs) and
interbank/invisibles windows increased by 32.4 per cent and 10.0 per
cent to US$0.46 billion and US$0.53 billion, respectively, relative to the
levels in the preceding quarter.
Figure 36: Foreign Exchange Sales to Authorised Dealers (US$ billion)

Source: Central Bank of Nigeria

The average turnover at the I&E segment decreased by 25.0 per cent
to US$0.11 billion, relative to the level in 2022Q2, reflecting liquidity
conditions in the segment.
Figure 37: Turnover in the I&E Foreign Exchange Market
Source: Central Bank of Nigeria.

The average exchange rate of the naira per US dollar at the I&E
window was ₦426.34/US$, compared with ₦415.70/US$ in 2022Q2.

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

US$Bn


-

Q 3
2 0 2 0
Q 4
2 0 2 0
Q 1
2 0 2 1
Q 2
2 0 2 1
Q 3
2 0 2 1
Q 4
2 0 2 1
Q 1
2 0 2 2
Q 2
2 0 2 2
Q 3
2 0 2 2
Percent
US $ (M)
Average Turnover (LHS)
Rate of Turnover (RHS)
Average Exchange
Rate

49 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
3.0 MACROECONOMIC OUTLOOK
3.1 Global Economic Outlook
The performance of the global economy is projected to slow in 2022, on
account of the economic uncertainty induced by the Russia-Ukraine war.
The revised projection by the IMF indicate that global growth would
slow to 3.2 per cent in 2022 from 6.1 per cent in 2021, which is 0.4
percentage points lower than the initial estimate of 3.6 per cent in April.
In the Advanced Economies (AEs), growth is projected to slow from 5.2
per cent in 2021 to 2.5 per cent in 2022, while in Emerging Market and
Developing Economies (EMDEs), it is projected to slow to 3.6 per cent
from 6.8 per cent in 2021. The downward revision of the growth
forecast was on account of the impact of the Russia-Ukraine war, which
has generated significant negative effects on the global economy. In
addition, increased fiscal withdrawals, pandemic-induced supply chain
disruptions, and monetary tightening are other factors that could
further slow output growth. Furthermore, China's growth deceleration,
due to the zero-COVID policy, is expected to dampen global growth
prospects.
Global inflation is expected to remain elevated in 2022, rising to 6.6 per
cent in AEs, and 9.5 per cent in EMDEs. The IMF’s World Economic
Outlook projection for July 2022 shows that persistent high inflation in
the near term is hinged on the surge in commodity and energy prices,
amid tight labour market conditions. While higher energy cost is
expected to be the main driver of inflation in AEs, rising food prices is
expected to play significant role in most EMDEs.
3.2
Domestic Economic Outlook
Growth prospects for the domestic economy remains positive in the nearterm, amid downside risks. The positive outlook is predicated on
relatively high crude oil prices, effective implementation of the National
Development Plan 2021-2025, and the positive impact of CBN
interventions on growth-enhancing sectors, among others. However,
contraction in global demand, persistent security challenges and
infrastructural deficit, remain possible headwinds to growth.
Furthermore, mounting value shortfall recovery in PMS and crude oil
production bottlenecks, could weaken the fiscal space and constrain
government’s effort in ramping up capital investment to support
growth. However, with the sustained momentum in non-oil revenue
through continuous implementation of the Finance Act and other fiscal
reform strategies of the FGN, coupled with the ongoing effort to clampdown on crude oil theft, fiscal conditions are likely to improve in the
near-term.

50 | P a g e Central Bank of Nigeria Economic Report
Third Quarter 2022
ECONOMIC REPORT, THIRD QUARTER 2022
This document is for CBN internal consumption
Inflationary pressures are expected to remain elevated in the near-term,
on account of rising energy and food prices. This outlook is hinged on
increased production cost, high energy prices, lag-effect of flooding, and
security challenges. Nevertheless, CBN’s monetary tightening as well as
the various supply-side interventions by the Bank and the FGN in
growth-enhancing sectors of the economy, are expected to moderate
inflation in the near-term.
The prospect for Nigeria’s external sector position is positive on the back
of favourable crude oil prices and domestic production, following
significant reduction in crude oil theft. However, rising import bills, hike
in policy rates in most AEs and high external debt service, remain
possible impediments to accretion to reserves.