ECONOMIC REPORT
FOURTH QUARTER 2015


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 Fourth Quarter

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


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Economic Report Fourth Quarter

Contents


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Economic Report Fourth Quarter


Text Tables
Appendix Tables


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Figures


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1.0 Summary
On quarter-on-quarter basis, growth in the key monetary aggregate
accelerated in the fourth quarter of 2015. Over the level at the end
of the preceding quarter, broad money supply, (M2), grew by 7.0 per
cent, in contrast to the decline of 0.5 per cent at the end of the
preceding quarter. The development was attributed largely, to the
11.2 and 8.2 per cent increase in net foreign assets and other assets
(net) of the banking system, respectively. Over the level at endDecember 2014, broad money supply (M2), grew by 5.9 per cent.
Banks’ deposit and lending rates trended downwards during the
fourth quarter of 2015. The spread between the weighted average
term deposit and maximum lending rates widened to 20.8
percentage points at the end of the fourth quarter of 2015. Similarly,
the margin between the average savings deposit and the maximum
lending rates widened by 0.05 percentage point to 23.40 per cent.
At the inter-bank funds segment, the weighted average inter-bank
call rate fell to 1.61 per cent in the fourth quarter of 2015, reflecting
the liquidity condition in the banking system.
The total value of money market assets outstanding at the end of
the fourth quarter of 2015 stood at N8,615.72 billion, a decline of 4.6
per cent below the level at the end of the preceding quarter. The
development was attributed largely, to the fall in the FGN Bonds
outstanding. In the Nigerian Stock Exchange (NSE), activities were
bearish as market indicators trended downward.
At N1,600.96 billion, total federally-collected revenue was 34.5 and
16.0 per cent lower than the quarterly budget estimate and the
preceding quarter’s receipts, respectively. Gross oil receipt which
stood at N830.81 billion was lower than both the provisional quarterly
budget and the receipts in the preceding quarter due to the
persistent fall in receipts from crude oil/gas export arising from the
continuous drop in the price of crude oil.
Non-oil receipts, at N770.16 billion or 48.1 per cent of the total, fell
below the 2015 quaterly budget estimate and the level in the
preceding quarter by 29.1 and 19.5 per cent, respectively. Federal
Government retained revenue was N818.39 billion, while total
expenditure was N1,107.51 billion, resulting in an estimated deficit of
N289.12 billion in the fourth quarter of 2015, compared with the 2015
quarterly budget deficit of N260.25 billion.
Activities in the agricultural sector were dominated by harvesting of
tubers, fruits and vegetables in the Southern part of the country
during the fourth quarter of 2015. In the North, farmers were


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Economic Report Fourth Quarter

engaged in the harvesting of late maturing grains and pre-planting
operations in preparation for dry season planting. In the livestock
sub-sector, farmers engaged in fattening and other activities in
anticipation of the end of year sales. The end-period headline
inflation rate on year-on-year basis, was 9.6 per cent, while the
inflation rate on a 12-month moving average basis was 9.0 per cent.
World crude oil demand and supply were estimated at 93.95 mbd
and 95.12 mbd, respectively, in the fourth quarter. Nigeria’s crude oil
production, including condensates and natural gas liquids, was
estimated at an average of 1.89 million barrels per day (mbd) or
173.88 million barrels (mb) for the fourth quarter of 2015. Crude oil
export was estimated at 1.44 mbd or 132.48 million barrels, while
deliveries to the refineries for domestic consumption remained at
0.45 mbd or 41.4 million barrels during the review quarter. The
average price of Nigeria’s reference crude, the Bonny Light (370
API), fell by 13.8 per cent below the level in the preceding quarter.
Foreign exchange inflow and outflow through the Central Bank of
Nigeria (CBN) amounted to US$7.14 billion and US$7.76 billion,
respectively, resulting in a net outflow of US$0.62 billion. Foreign
exchange sales by the CBN to the authorized dealers amounted to
US$7.01 billion. The average exchange rate of the naira vis-à-vis the
US dollar at the inter-bank remained unchanged at N196.99, while at
the BDC window it was N238.69 per US dollar in the review quarter,
indicating a depreciation of 5.7 per cent.
The global economy continued to be affected by the decline in oil
prices, appreciation of the dollar, slowdown in China, uncertainty in
Europe and anticipation of a shift in US monetary policy. In October
2015, the International Monetray Fund (IMF) forecast the world
economy to grow by 3.6 per cent in 2016.
Other major international economic developments and meetings of
importance to the domestic economy during the review period
included: the 2015 Annual Meetings of the Board of Governors of the
World Bank Group and the International Monetary Fund held in Lima,
Peru, from October 5 – 11, 2015; the African Development Bank
(AfDB) High-level Conference on “Feeding Africa” in Dakar, Senegal,
from October 21 – 23, 2015; issuance by AfDB of a 0.75 per cent US$
1 billion 2-year global benchmark due 3 November 2017; the IndiaAfrica Forum Summit held in New Delhi, India, from October 26 – 29,
2015; the African Development Bank (AfDB), the United Nations
Economic Commission for Africa (ECA) and the United Nations
Development Programme (UNDP) joint 2015 African Economic
Conference (AEC) in Kinshasa, Democratic Republic of Congo, from
November 2 to 4, 2015; and the 10th United Nations Conference on


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Economic Report Fourth Quarter

Trade and Development (UNCTAD) biennial Debt Management
Conference held in Geneva, Switzerland, from November 23 to 25,
2015.


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2.0 Financial Sector Developments
2.1 Monetary and Credit Developments
Provisional data indicated that growth in the key monetary
aggregates accelerated at the end of fourth quarter of 2015. Banks’
deposit and lending rates trended downward during the review
quarter. The value of money market assets outstanding decreased,
due largely, to the fall in FGN Bonds. Transactions in the Nigerian
Stock Exchange (NSE) were bearish as market indicators trended
downward.
Provisional data indicated that growth in the key monetary
aggregate accelerated at the end of the fourth quarter of
2015. On quarter-on-quarter basis, broad money supply, (M2),
at N20,029.8 billion, grew by 7.0 per cent, in contrast to the
decline of 0.5 per cent at the end of the third quarter. The
development
relative
to
the
preceding
quarter
was
attributed, largely, to the respective increase of 11.2 and 8.2
per cent in foreign assets (net) and other assets (net) of the
banking system. Over the level at end-December 2014, broad
money supply (M2), grew by 5.9 per cent.
Relative to the level at the end of the preceding quarter,
narrow money supply (M1), rose by 19.9 per cent to N8,571.7
billion, at the end of the review quarter, compared with the
9.3 per cent increase at the end of the preceding quarter. The
development reflected, largely, the 19.5 and 20.0 per cent
increase in currency outside banks and demand deposits,
respectively. Over the level at end-December 2014, M 1 rose
by 24.1 per cent, compared with the rise of 3.5 per cent at the
end of the preceding quarter. The development was
attributed to the respective increase of 1.3 and 30.2 per cent
in currency outside banks and demand deposits.
Compared with the level at the end of the preceding quarter,
quasi money fell by 1.0 per cent to N11,458.1 billion at the end
of the fourth quarter 2015, against the 5.7 per cent decline at
the end of the preceding quarter. The development was
attributed to the decline in time and savings deposit with the
banks (Fig. 1, Table 1). Over the level at end-December 2014,
quasi money fell by 4.6 per cent, compared with the 3.7 per
cent at the end of the preceding quarter.
Growth in the key
monetary
aggregate
accelerated during
Q4 of 2015.


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Economic Report Fourth Quarter

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

At N21,612.5 billion, aggregate domestic credit to the
economy, quarter-on-quarter, grew marginally by 0.4 per cent
at the end of the review quarter, compared with the growth
of 0.5 and 7.3 per cent at the end of the preceding quarter
and the corresponding period of 2014, respectively. The
development reflected the 3.8 per cent increase in net claims
on the Federal Government. Over the level at end-December
2014, net domestic credit grew by 12.1 per cent, compared
with the 11.7 per cent increase at the end of the preceding
quarter.
Banking system’s credit (net) to the Federal Government,
quarter-on-quarter, rose by 3.8 per cent to N2,893.2 billion,
compared with the growth of 11.0 per cent at the end of the
preceding quarter. The development reflected the 18.7 per
cent rise in DMBs’ holding of government securities. Over the
level at end-December 2014, banking system credit (net) to
the Federal Government grew by 151.6 per cent, compared
with the growth of 142.4 per cent, at the end of the preceding
quarter.

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


Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Quarterly (%)
Cumulative (%)
QM1 (RHS)
QM2 (RHS)
CM1 (LHS)
CM2 (LHS)
Banking system credit
to the Federal
Government rose by
0.4 per cent at the
end of the fourth
quarter of 2015.


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Economic Report Fourth Quarter

At N18,719.3 billion, banking system’s credit to the private
sector, quarter-on-quarter, fell by 0.1 per cent, compared with
the decline of 0.9 per cent at the end of the preceding
quarter. The development compared with the level at the end
of the preceding quarter, reflected the 0.2 per cent fall in
claims on the core private sector. Over the level at endDecember 2014, banking system credit to the private sector
rose by 3.3 per cent, compared with 3.4 per cent growth at
the end of the preceding quarter.
Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy2

At N5,653.3 billion, foreign assets (net) of the banking system
grew by 11.2 per cent at the end of the fourth quarter of 2015,
in contrast to the respective decline of 14.6 and 8.2 per cent
at the end of preceding quarter and the corresponding
period of 2014. This was attributed to the 5.8 per cent growth
in banking system’s holdings of foreign assets. Over the level
at end-December 2014, foreign assets (net) declined by 18.7
per cent at the end of the fourth quarter of 2015, compared
with the respective decline of 26.9 and 19.7 per cent at the
end of the preceding quarter and the corresponding period
of 2014.
Other Assets (net) of the banking system, quarter-on-quarter,

2 QCP, QCG and QAC represent quarter-on-quarter changes in credit to private sector, credit to
government (net) and aggregate credit (net) to the domestic economy, respectively, while CCP,
CCG and CAC, represent the cumulative changes (year-to-date).
-50

-50

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Quarterly (%)
Cumulative (%)
QCP (RHS)
QCG (RHS)
QAC (RHS)
CCP (LHS)
CCG (LHS)
CAC (LHS)
Foreign assets (net)
of the banking
system grew at the
end of the review
quarter.


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Economic Report Fourth Quarter

grew by 8.2 per cent to negative N7,235.9 billion, compared
with the growth of 7.8 and 0.4 per cent at the end of the
preceding period and the corresponding quarter of 2014,
respectively. Over the level at end-December 2014, other
assets (net) of the banking system grew by 1.1 per cent at the
end of the review quarter, in contrast to a decline of 7.8 per
cent at the end of the preceding quarter.
Table 1: Growth in Monetary and Credit Aggregates (Per cent) Over
Preceding Quarter
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
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
the CBN
At N1, 857.9 billion, currency-in-circulation increased by 13.5
per cent in the review quarter, compared with the growth of
4.8 per cent at the end of the third quarter of 2015. The
development was due largely, to monetary injections into the
economy and seasonal factors during the review quarter.

Total deposits at the CBN amounted to N9,351.6 billion,
indicating a rise of 26.1 per cent relative to the level at the
end of the third quarter of 2015. The development reflected
the significant increase in private sector and Federal
Government deposits. Of the total deposits at CBN, the shares
of the Federal Government, Banks and ‘’Others’’ were
N4,167.0 billion (44.6 per cent), N3,954.8 billion (42.3 per cent)
and N1,229.8 billion (13.2 per cent), respectively.
Reserve money (RM) rose by 0.4 per cent to N5,812.74 billion
at the end of the fourth quarter, reflecting the increase in
DMB’s reserves with the CBN and liquidty condition in the
Reserve money (RM)
rose at the end of
the fourth quarter of
2015.


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Economic Report Fourth Quarter

banking system.
2.3
Money Market Developments
The financial market was generally stable in the review period.
It was saturated with funds, arising from the payment of Cash
Reserve Requirement (CRR) amounting to N740.88 billion
during October, 2015. This was against the expectation of
liquidity squeeze following the implementation of the Treasury
Single Account (TSA) in September 2015. The sum of N420.20
billion was mopped up, compared with N898.17 billion in the
preceding quarter.
In the foreign exchange market, demand pressures persisted,
while the Bank intervened regularly to provide the much
needed liquidity thereby leading to stability in the market.
Overall,
the
weekly
foreign
exchange
interventions
moderated liquidity but were not enough to significantly
impact short term interest rates.
Provisional data showed that the total value of money market
assets outstanding at the end of the fourth quarter of 2015
stood at N8,615.72 billion. This indicated a decline of 4.6 per
cent, in contrast to the rise of 8.7 per cent at the end of the
preceding quarter. The development was attributed largely,
to the 7.05 per cent fall in FGN Bonds outstanding.
2.3.1
Interest Rate Developments
Available data suggested that banks’ deposit and lending
rates trended downward during the fourth quarter of 2015. All
deposit rates of various maturites fell from a range of 1.97 –
11.28 per cent to 1.52 – 7.52 per cent. At 6.12 per cent, the
average term deposit rate declined by 3.12 percentage
points below the level in the third quarter of 2015. The average
maximum and prime lending rates fell by 0.01 and 0.3
percentage point to 27.0 and 16.9 per cent, respectively.
Consequently, the spread between the weighted average
term deposit and maximum lending rates widened by 3.02
percentage points to 20.8 percentage points at the end of
the fourth quarter of 2015. Similarly, the margin between the
average savings deposit and the maximum lending rates
widened by 0.05 percentage point to 23.40 percentage
points. With headline inflation at 9.6 per cent at endDecember 2015, all deposit rates were negative in real terms,
The financial market
was generally stable
during the review
period due to ample
liquidity
The spread between
the weighted –
average term deposit
and maximum lending
rates widened at the
end of the fourth
quarter.


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while lending rates were positive in real terms.
At the inter-bank funds segment, the weighted average interbank call rate, which stood at 16.39 per cent at the end of the
preceding quarter, fell by 14.78 percentage points to 1.61 per
cent in the fourth quarter of 2015, reflecting the liquidity
condition in the banking system. The Nigeria inter-bank offered
rate (NIBOR) for the 30-day tenor fell from 15.38 per cent in
the preceding quarter to 11.70 per cent in the fourth quarter
of 2015. Similarly, the weighted average rate at the Open-BuyBack (OBB) segment fell by 13.29 percentage points to 2.11
per cent (Fig. 3, Table 2).
Figure 3: Selected DMBs Interest Rates (Average)


Table 2: Selected Interest Rates (Percent, Averages)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Average Term Deposits

Prime Lending

Interbank

Maximum Lending


2.3.2
Commercial Paper (CP)
Commercial Paper (CP) held by DMBs rose by 29.7 per cent to
N6.3 billion at the end of the fourth quarter of 2015, compared
with N4.9 billion at the end of the preceding quarter. This
development was due to the increase in investment in CP by

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Percent per Annum
Percent per Annum
Prime
Interbank
Maximum
Average Term Deposits (RHS)

Investment in CP by
banks rose in the
fourth quarter of
2015.
Interbank call
rate fell in Q4
2015.


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Economic Report Fourth Quarter

the commercial banks during the review quarter. Thus, CP
constituted 0.07 per cent of the total value of money market
assets outstanding, during the review period, compared with
0.05 per cent at the end of the preceding quarter.
2.3.3
Bankers’ Acceptances (BAs)
BAs outstanding at the end of the fourth quarter increased by
321.26 per cent to N28.4 billion, compared with N6.7 billion at
the end of the preceding quarter. The development was
attributed to the increase in investment in BAs by the DMBs
during the quarter. Consequently, BAs accounted for 0.33 per
cent of the total value of money market assets outstanding, at
the end of the fourth quarter of 2015, compared with 0.07 per
cent at the end of the preceding quarter.

2.3.4 Open Market Operations
The Bank intervened once in the money market, through
Open Market Operation (OMO) in the review period, during
which the sum of N420.20 billion was mopped up. The tenors
of the intervention securities ranged from 296 to 310 days.
Total sales was N586.56 billion, at bid rates ranging from 7.0000
to13.5000 per cent, while the stop rate was 8.0000 per cent.
Matured and repaid CBN bills amounted to N1,410.81 billion,
which translated to a net injection of N990.61 billion.
2.3.5
Primary Market
NTBs of 91- 182- and 364-day tenors amounting to N860.19
billion, N2,795.25 billion and N860.19 billion were offered,
subscribed to and allotted, respectively, in the fourth quarter
of 2015. The bid rates ranged from 2.0000 - 13.8000, 4.0000 -
14.5000, and 5.0000 – 15.2066 per cent, respectively, for the
91-, 182- and 364-day tenors. Similarly, the stop rates ranged
from 3.6250– 10.000, 6.1900-12.2000 and 7.4500 -12.5000 per
cent, respectively. In the preceding quarter, a total of N751.33
billion, N1,293.86 billion and N751.33 billion, respectively, were
offered, subscribed to and alloted for the three tenors.

2.3.6
Bonds Market
Tranches of the 5- and 20-year FGN Bonds were re-opened
during the review period, with term to maturity ranging from 4
years 5 months to 19 years. Total amount offered, subscribed
to and allotted were N205.0 billion, N394.24 billion and N159.0
billion, respectively. In addition, N10.20 billion of the 5-year was
Subscription for FGN
Bonds of various
maturities were
reopened during the
fourth quarter of 2015.
DMBs’ holdings of
BAs increased
during Q4 of 2015.


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Economic Report Fourth Quarter

allotted on non-competitive basis. The marginal rates for the 5year bond ranged from 15.29 to15.95 per cent and 15.19 to
15.97 per cent for the 20-year. The marginal rates for all the
tenors ranged from 15.19 to 15.97 per cent. There was no
matured bond in the review period. Consequently, the total
withdrawal through this medium amounted to N159.00 billion.

2.3.7
CBN Standing Facilities
Developments at the CBN standing facilities window in the
review quarter indicated higher patronage at the Standing
Deposit Facility (SDF) window than at the Standing Lending
Facility (SLF) window. Total request for SLF transactions in the
fourth quarter was N1,012.24 billion (including Intraday lending
facilities converted to overnight repo) with interest earned
amounting to N0.54 billion, compared with N2,848.50 billion
and interest earned of N1.67 billion in the third quarter of 2015.
The total deposit at the SDF window stood at N8,227.01 billion,
compared with N4,726.78 billion in the preceding quarter. This
represented a daily average of N137.12 billion, while the
interest paid during the review period amounted to N2.73
billion.
2.4
Deposit Money Banks’ Activities
Available data indicated that the total assets and liabilities of
the commercial banks stood at N28,173.26 billion at the end of
the fourth quarter of 2015, representing an increase of 0.02 per
cent above the level at the end of the preceding quarter. The
funds were sourced, largely, from demand deposits and
credits from the central bank. The funds were used, mainly, to
aquire federal government securtities and increase reserves.
At N18, 203.9 billion, banks’ credit to the domestic economy,
rose by 5.3 per cent, compared with 1.2 per cent at the end
of the preceding quarter. The development was attributed to
the increase in claims on both the Federal Government and
the private sector, at the end of the review quater.
Central Bank’s credit to the commercial banks rose by 130.7
per cent to N732.24 billion, at the end of the review quarter.
Total specified liquid assets of the banks stood at N7,472.0
billion, representing 42.8 per cent of their total current
liabilities. At that level, the liquidity ratio rose by 3.0
Liquidity ratio in Q4 was
above the stipulated
minimum,
while
the
Loan-to-deposit ratio was
below
the
prescribed
maximum


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Economic Report Fourth Quarter

percentage points above the level at the end of the
preceding quarter and was 12.8 percentage points above the
stipulated minimum ratio of 30.0 per cent. The loans-to-deposit
ratio, at 69.6 per cent, was 0.6 and 10.4 percentage points
below the level at the end of the preceding quarter, and the
prescribed maximum of 80.0 per cent, respectively.
2.5
Capital Market Developments
2.5.1
Secondary Market
Developments in the Nigerian Stock Exchange (NSE), based
on available data, were bearish during the fourth quarter of
2015. Total volume and value of traded securities fell by 21.0
and 21.5 per cent, to 18.4 billion shares and N172.6 billion in
175,429 deals, in the review quarter, compared with the 23.3
billion shares and N219.7 billion, in 229,633 deals, in the third
quarter of 2015. The Financial Services Industry led the activity
chart (measured by volume) with 14.3 billion shares valued at
N89.9 billion and traded in 100,126 deals. These represented
78.1 and 52.1 per cent of the total equity turnover in terms of
volume and value, respectively, compared with 18.1 billion
shares valued at N133.4 billion, and traded in 130,087 deals in
the preceding quarter. The Banking sub-sector of the Financial
Services sector was the most active during the review quarter.
Figure 4: Volume and Value of Traded Securities


Table 3: Traded Securities on the Nigerian Stock Exchange (NSE)

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Value (N billion)
Volume (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)


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Economic Report Fourth Quarter

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Volume (Billion)

Value (N Billion)


2.5.2
New Issues Market/Supplementary Listings
There were two (2) supplementary listings in the review quarter (table 4)
Table:4 New and Supplementary Listing on the Nigerian Stock Exchange
S/N Company
Additional Shares (Units)
Reasons
Listing
1 Standard Alliance Insurance Plc.
3500,000,000 Units
convertible preference share Supplementary
2 Seplat Petroleum Development Company Plc. (10,134,248 units
Long-Term Incentive Scheme Supplementary

2.5.3
Market Capitalization
Aggregate market capitalization for all listed securities
(Equities and Bonds) stood at N17.00 trillion, indicating a
marginal decline of 0.02 per cent below the level at the end
of the third quarter of 2015. Similarly, market capitalization for
the listed equities declined by 8.2 per cent below the level in
the preceding quarter to close at N9.9 trillion, at the end of
the review quarter due to persistence of bearish sentiments.
Listed equities accounted for 58.0 per cent of the aggregate
market capitalization, compared with 63.2 per cent at the
end of the preceding quarter.
2.5.4 NSE All-Share Index
The All-Share Index, which opened at 31,217.77 at the
beginning of the period, closed at 26,871.24, representing a
decline of 13.9 per cent, below the level at the end of the
preceding quarter. With the exception of the NSE Oil/Gas, NSE
Insurance and NSE ASeM indices, which rose by 3.83, 2.5 and
0.02 per cent to close at 356.56, 142.61 and 1,208.65,
respectively, all other sectoral indices fell below their
respective levels in the preceding quarter. The NSE Banking,
NSE Consumer Goods, NSE Lotus Islamic, NSE Industrial, NSE
Pension and NSE Premium indices declined by 15.9, 7.6, 4.6,
2.8, 13.9 and 7.7 per cent below their respective levels at the
end of the third quarter 2015, to close at 268.49, 746.19,
1,998.85, 2,166.70, 815.16 and 1,584.92, respectively, at the
end of the review period.


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Figure 5: Market Capitalization and All-Share Index

Table 5: Market Capitalization and All Share Index (NSE)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Market Capitalization (N trillion)

All-Share Index (Equities)
41,329.19

38,748.01

42,482.48

41,210.10

34,657.15

31,744.82

33,456.86

31,217.77

26,871.24


15.5

16.5

17.5

18.5

19.5
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
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 Fourth Quarter

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

Economic Report Fourth Quarter

3.0
Fiscal Operations
3.1
Federation Account Operations
Provisional data indicated that federally-collected revenue, at
N1,600.96 billion, was lower than the quarterly budget
estimate and receipts in the preceding quarter by 34.5 and
16.0 per cent, respectively. 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

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Oil Revenue Gross
Non-Oil Revenue
N Billion

Table 6: Gross Federation Account Revenue (N billion)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Federally-collected revenue (Gross)

Oil Revenue

Non-Oil Revenue


At N830.81 billion or 51.9 per cent of the total revenue, gross oil
receipt was lower than the provisional quarterly budget and
the receipts in the preceding quarter by 38.8 and 12.5 per
cent, respectively. 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, during the review
quarter (Fig. 7, Table 7).
Gross federally -
collected revenue
fell by 16.0 per
cent below the
level
in
the
preceding quarter.


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

Economic Report Fourth Quarter

Figure 7: Gross Oil Revenue and Its Components
-


Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
N billion
Others
PPT/Royalties
Crude oil/Gas Sales


Table 7: Components of Gross Oil Revenue (N billion)


At N770.16 billion or 48.1 per cent of total revenue, gross nonoil receipts fell below the provisional budget estimate and
receipts in the preceding quarter by 29.1 and 19.5 per cent,
respectively. 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, during the review
quarter (Fig. 8, Table 8).
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Oil Revenue

Crude oil/Gas Sales

PPT/Royalties

Others


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

Economic Report Fourth Quarter

Figure 8: Gross Non-Oil Revenue and its Components
-

1,000
1,200
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
N billion
Others
Customs & Excise Duties
Companies Income Tax & Other Taxes
Value-Added Tax (VAT)

Table 8: Components of Gross Non-Oil Revenue (N billion)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
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 N993.81
billion was transferred to the Federation Account for
distribution among the three tiers of government and the
13.0% Derivation Fund. The Federal Government received
N482.84 billion, while the state and local governments
received N244.90 billion and N188.81 billion, respectively. The
balance of N77.26 billion was allocated to the 13.0%
Derivation Fund for distribution among the oil-producing
states. Also, the Federal Government received N25.60 billion
from the VAT Pool Account, while the state and local
governments received N85.33 billion and N59.73 billion,
respectively.
The sum of N17.13 billion was also distributed as Exchange
Gain among the three tiers of government and the 13%
Derivation Fund as follows: Federal Government (N8.18 billion),
State Governments (N4.15 billion), Local Governments (N3.20
billion) and 13% Derivation Fund (N1.59 billion).
A
net
sum
of
N993.81 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 Fourth Quarter

In addition, the sum of N18.99 billion was received by the
Federal Government being NNPC installment refund of N6.33
billion paid in the months of October, November and
December 2015.
Thus, the total statutory and VAT revenue allocation to the
three tiers of government in the fourth quarter of 2015
amounted to N1,200.59 billion, compared with the provisional
quarterly budget estimate of N1,994.77 billion and N1,440.36
billion 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 fourth
quarter of 2015 based on provisional data amounted to
N818.39 billion. This was below the provisional budget estimate
and receipts in the preceding quarter by 12.0 and 21.7 per
cent, respectively. Of the total revenue, receipts from the
Federation Account accounted for 59.0 per cent, while ‘Other
Revenue’, Federal Government Independent Revenue and
VAT accounted for 30.3, 7.6 and 3.1 per cent, respectively
(Fig. 9, Table 9).
Figure 9: Federal Government Retained Revenue
Federation
Account (59.0%)
VAT Pool
Account (3.1%)
Others (30.3%)
FGN Independent
Revenue (7.6%)


At N818.39 billion, the
estimated
Federal
government
retained
revenue
was
lower
than
the

provisional
quarterly
budget estimate and
the receipts in the
preceding quarter.


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

Economic Report Fourth Quarter

Table 9: Federal Government Fiscal Operations (N billion)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Retained Revenue

Expenditure

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


At N1,107.51 billion, provisional data showed that Federal
Government expenditure for the fourth quarter of 2015 was
lower than both the provisional quarterly budget estimate and
the level in the preceding quarter, by 6.9 and 5.8 per cent,
respectively. The development relative to the quarterly
budget estimate was attributed, mainly, to the rise in capital
expenditure. A breakdown of the total expenditure showed
that the recurrent component accounted for 59.6 per cent,
while capital and statutory transfers components accounted
for 31.8 and 8.6 per cent, repectively (Fig. 10). A further
breakdown of the recurrent expenditure showed that the nondebt component accounted for 65.7 per cent, while debt
service payments accounted for the balance of 34.3 per
cent.
Thus, the fiscal operations of the Federal Government resulted
in a deficit of N289.12 billion, compared with the 2015
provisional quarterly budget deficit of N260.25 billion.
Figure10: Federal Government Expenditure
Recurrent
Capital
Transfers
Capital
(31.8%)
Transfers
(8.6%)
Recurrent (59.6%)

Fiscal
operations
of the FG resulted
in an estimated
deficit of N289.12
billion

in
Q4
2015.


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

Economic Report Fourth Quarter

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
N413.24 billion during the review quarter. This was 40.8 and
16.1 per cent lower than both the provisional budget estimate
and the level in the preceding quarter, respectively. Further
breakdown showed that receipts from the Federation
Account was N327.90 billion (79.4 per cent), while VAT
contributed N85.33 billion (20.6 per cent). The share of
Federation Account was 17.1 per cent lower than the level in
the preceding quarter. Receipts from the VAT Pool Account
was also 12.0 per cent lower than the level in the preceding
quarter.
3.2.3
Statutory Allocations to Local Government Councils

Provisional allocations to local governments
from the
Federation and VAT Pool Accounts during the fourth quarter
of 2015 stood at N251.74 billion. This was 41.4 and 16.6 per
cent below the provisional budget estimate and the level in
the preceding quarter, respectively. Of the total amount,
allocation from the Federation Account was N192.01 billion
(76.3 per cent), while VAT Pool Account accounted for the
balance of N59.73 billion (23.7 per cent).


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

Economic Report Fourth Quarter

4.0
Domestic Economic Conditions
Activities in the agrcultural sector were dominated by the harvesting
of tubers, fruits and vegetables in the South, while farmers in the
North were engaged in harvesting of late maturing grains, as well as
pre-planting operations in preparation for dry season farming. In the
livestock sub-sector, farmers were engaged in fattening and other
activities in anticipation of the end of year sales. Crude oil
production was estimated at 1.95 million barrels per day (mbd) or
179.40 million barrels for the quarter. The end-period inflation rate for
the fourth quarter of 2015, on year-on-year basis, was 9.6 per cent,
compared with 9.4 and 8.0 per cent at the end of the preceding
quarter and the corresponding quarter of 2014, respectively. The
inflation rate on a 12-month moving average basis was 9.0 per cent,
compared with 8.7 per cent at the end of the preceding quarter.
4.1
Agricultural Sector
Available data suggested that agricultural activities during the
fourth quarter of 2015 centred on harvesting of tubers, fruits
and vegetables in the South, while farmers in the North were
engaged in harvesting of late maturing grains, as well as preplanting operations in preparation for dry season farming. In
the livestock sub-sector, farmers were engaged in fattening
and other activities in anticipation of the end of year sales.
However, growth in output, though positive, was below the
expected level due to insurgency in the North –Eastern part of
the country.
4.2 Agricultural Credit Guarantee Scheme
A total of N3, 094.5 million was guaranteed to 22,543 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the fourth quarter of 2015. The amount represented an
increase of 6.5 per cent above the level in the preceding
quarter, but was 15.4 per cent below the level in the
corresponding period of 2014. Sub-sectoral analysis showed
that food crops accounted for the largest share of N1, 748.9
million (56.5 per cent) guaranteed to 15,853 beneficiaries,
‘Others’ received N450.0 million (14.5 per cent) guaranteed to
1,765 beneficiaries, while livestock got N378.3 million (12.2 per
cent) guaranteed to 1,704 beneficiaries. Mixed crops had
N249.7 million (8.1 per cent) guaranteed to 1,942 beneficiaries.
A total of N137.9 million (4.5 per cent) was guaranteed to 768
beneficiaries in the Cash Crops subsector, while Fisheries subsector received N129.4 million (4.2 per cent) guaranteed to


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

Economic Report Fourth Quarter

511 beneficiaries.
Analysis by state showed that 35 states and the Federal
Capital Territory benefited from the Scheme in the review
period, with the highest and lowest sums of N408.3 million (13.2
per cent) and N0.15 million (0.005 per cent) guaranteed to
Oyo and Borno states, respectively.
At end-December 2015, total amount released by the CBN
under the Commercial Agriculture Credit Scheme (CACS)
from inception to the participating banks for disbursement
stood at N336.40 billion for 420 projects(Table 10).


4.3
Industrial Production
Available data on Industrial activities during the fourth quarter
of 2015 indicated a decline, compared with the level in the
preceding quarter. At 118.8 (2010=100), the estimated index of
industrial production fell by 0.14 per cent below the level in
the preceding quarter, but showed a 19.2 per cent increase
above the level in the corresponding period of 2014. The
decrease relative to the preceding quarter was attributed to
fall in activities in the manufacturing and mining subsectors
Industrial activities
fell in the review
quarter due to
reduced 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
16.6

Citibank Plc
3.0

Diamond Baqnk Plc
4.4

ECOBANK
6.4

FCMB Plc.
10.0

Fidelity Bank Plc
14.9

First Bank of Nigeria Plc
37.1

GTBank Plc
17.4

Heritage Bank Plc
4.8

Keystone Bank
2.2

Jaiz Bank Plc
1.0

Skye Bank Plc
11.8

Stanbic IBTC Bank
18.5

Sterling Bank Plc
23.7

Union Bank Nigeria PLC
21.6

United Bank for Africa (UBA) Plc
52.8

Unity Bank Plc
24.3

Wema Bank
1.2

Zenith Bank
64.7

TOTAL
336.3

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

Economic Report Fourth Quarter

during the period.
The estimated index of manufacturing production in the fourth
quarter of 2015, at 185.5 (2010=100), showed a decrease of
3.3 per cent relative to the preceding quarter. It, however,
indicated a 2.6 per cent increase above the level in the
corresponding period of 2014. Capacity utilisation was
estimated at 53.7 per cent, indicating a 1.2 percentage point
decrease below the level in the preceding quarter. The
development was attributed to the reduced cash flow effect
and exchange rate challenges on business confidence, which
hindered activities in the sector. (Fig.11).
Figure11: Manufacturing Capacity Utilization Rate

At 94.5 (2010=100), the estimated index of mining production
in the fourth quarter of 2015, indicated 0.08 and 37.3 per cent
increase relative to the levels attained in the preceding
quarter and the corresponding period of 2014, respectively.
The increase in mining production during the review quarter
was accounted for by a rise in crude oil and gas production.
At 4,165 MW/h, estimated average electricity generation in
the fourth quarter of 2015 fell by 0.1 per cent, compared with
the level attained in the preceding quarter. The development
was attributed to the fall in generation from Egbin power plant
from 813mw to 660mw, and the shortage in water supply to
the hydro power stations.

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Percent
Industrial
capacity
utilization
was
estimated to decline
by
1.2
percentage
points
during
the
review quarter.
Average electricity
generation and
consumption fell
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 Fourth Quarter

At 3,832.5 MW/h, average estimated electricity consumption
fell by 0.1 per cent relative to the level attained in the
preceding quarter. The fall in electricity consumption was
attributed to a decline in generation and transmission as well
as distribution losses. (Fig. 12, Table 11).
Figure 112: Index of Industrial Production (2010=100) 3

Table 11: Index of Industrial Production and Manufacturing Capacity Utilization Rate
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
All Sectors (1990=100)

Manufacturing

Mining

Capacity Utilization (%)

Petroleum Sector
Nigeria’s crude oil production, including condensates and
natural gas liquids, was estimated at an average of 1.89
million barrels per day (mbd) or 173.88 million barrels (mb) for
the fourth quarter. This represented a decline of 0.06 mbd or
3.2 per cent, relative to 1.95 mbd or 179.4 million barrels
produced in the third quarter of 2015.


3 Index measurement at (2010=100) from first quarter15

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Index
Mining
All Sectors
Manufacturing
Crude oil and natural
gas production
decreased in the
fourth quarter of
2015.


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

Economic Report Fourth Quarter

Crude oil export stood at 1.44 mbd or 132.48 million barrels.
This represented a decline of 4.2 per cent, compared with 1.50
mbd or 138.00 mb recorded in the preceding quarter. Recent
pipeline vandalism in the Niger Delta, oil theft, illegal
bunkering and production shut-ins accounted for the decline
in crude oil production. Deliveries to the refineries for domestic
consumption remained at 0.45 mbd or 41.4 million barrels
during the review quarter.
At an estimated average of US$44.08 per barrel, the price of
Nigeria’s reference crude, the Bonny Light (37o API), fell by
13.8 per cent below the level in the preceding quarter. The
average prices of other competing crudes, namely the U.K
Brent, the West Texas Intermediate and the Forcados, at
US$43.43, US$44.91 and US$44.24 per barrel, also fell below
their levels in the preceding quarter.
The average price of OPEC’s basket of eleven crude streams,
at US$39.90 per barrel, indicated a fall of 17.1 and 45.7 per
cent below the levels in the preceding quarter and the
corresponding period of 2014, respectively (Fig. 13, Table 12).
Figure12: Trends in Crude Oil Prices

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
US$ per barrel
Bonny Light
OPEC Basket
Crude oil export
decreased in Q4
2015.
Average crude oil
prices, including
Nigeria’s Bony
Light (37o API) fell
in the international
crude oil market in
Q4 2015.


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

Economic Report Fourth Quarter

Table 12: Average Crude Oil Prices in the International Oil Market
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Bonny Light

OPEC Basket


4.5
Consumer Prices4
Available
data
showed
that
the
all-items
composite
Consumer Price Index (CPI), at the end of the fourth quarter of
2015, was 180.2 (November 2009=100), representing an
increase of 2.1 and 9.6 per cent, above the levels in the
preceding quarter and the corresponding quarter of 2014,
respectively. The development was driven, largely, by the
contributions of food and non-alcoholic beverages; housing,
water, electricity, gas and other fuel; clothing and footwear;
transport; furnishing, household equipment and maintenance;
health; and education.
The urban all-items CPI at the end of the fourth quarter of 2015
was 179.22 (November 2009=100), indicating an increase of
2.1 and 9.7 per cent above the levels in the preceding quarter
and the corresponding period of 2014, respectively. Similarly,
the rural all-items CPI, at 181.11 (November 2009=100),
represented an increase of 2.0 and 9.4 per cent over the
levels in the preceding quarter and the corresponding period
of 2014, respectively (Fig. 14, Table 13).
The composite food index (with a weight of 50.7 per cent) was
186.2 per cent, representing an increase of 2.4 per cent,
compared with the 181.8 per cent at the end of the
preceding quarter. The development was attributed to the
increase in the prices of yam, potatoes, vegetables, rice, fruits,
maize and processed food.


4 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.
The general price
level rose in Q4
compared with the
preceding quarter.


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

Economic Report Fourth Quarter

Figure13: Consumer Price Index

Table 13: Consumer Price Index (November 2009=100)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Composite

Urban

Rural

The inflation rate at the end of the review quarter, on a yearon-year basis, was 9.6 per cent, compared with 9.4 and 8.0
per cent in the preceding quarter and the corresponding
period of 2014, respectively. On a twelve-month moving
average basis, the inflation rate was 9.0 per cent, indicating a
0.3 percentage point increase over the level recorded in the
preceding quarter (Fig. 15, Table 14).

147.5

152.5

157.5

162.5

167.5

172.5

177.5

182.5

187.5

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Index
Composite
Urban
Rural
The headline
inflation (y-o-y)
stood at 9.6 per
cent in Q4 2015.


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

Economic Report Fourth Quarter

Figure 15: Inflation Rate


Table 14: Headline Inflation Rate (%)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
12-Month Moving Average

Year-on-Year


Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Percent
12-Month Average
Year-on-Year


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

Economic Report Fourth Quarter

5.0
External Sector Developments
Provisional data showed that foreign exchange inflow and outflow
through the CBN in the fourth quarter of 2015 fell by 35.8 and 18.5
per cent, below the levels in the preceding quarter, respectively.
Total non-oil export receipts declined by 39.1 and 27.4 per cent
below the levels in the preceding quarter and the corresponding
quarter of 2014, respectively. At the inter-bank segment of the
foreign exchange market, the average naira exchange rate
remained unchanged at the level in the preceding quarter of
N196.99 per dollar. At the BDC segment, the average naira
exchange rate, depreciated by 5.7 per cent, to N238.69 per dollar,
relative to the level in the preceding quarter. At US$28.29 billion, the
gross external reserves fell by 5.2 per cent below the level at the end
of the preceding quarter.
5.1
Foreign Exchange Flows
Provisional data showed that foreign exchange inflow and
ouflow through the CBN in the fourth quarter of 2015 were
US$7.14 billion and US$7.76 billion, respectively. This resulted in
a net outflow of US$0.62 billion, in contrast to the net inflow of
US$1.59 billion in the preceding quarter. Relative to the level at
the end of the preceding quarter and the corresponding
period of 2014, inflow declined by 35.8 and 33.1 per cent,
respectively. The development was due to the decline in both
oil and non-oil receipts. Similarly, outflow fell by 18.5 and 46.6
per cent, below the levels in the preceding quarter and the
corresponding period of 2014, respectively. The development
relative to the preceding quarter was due largely to the
decreased funding of the foreign exchange market, external
debt service and other official payments (Fig.16, Table 15).


Foreign exchange
inflow and outflow
through the CBN fell
by 35.8 and 18.5 per
cent, respectively,
and resulted in a net
outflow of US$0.62
billion in Q4 of 2015.


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

Economic Report Fourth Quarter

Figure 16: Foreign Exchange Flows Through the CBN


Table 15: Foreign Exchange Flows Through the CBN (US$ million)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Inflow
9,465.52

10,221.43

12,676.51

13,094.23

10,641.86

8,307.23

6,976.02

11,111.00

7,135.41

Outflow
10,789.61

15,695.66

12,806.25

11,804.98

14,527.35

12,875.77

8,194.56

9,523.32

7,757.49

Netflow
(1,324.09)

(5,474.23)

(129.74)

1,289.25

(3,885.49)

(4,568.54)

(1,218.54)

1,587.68

(622.08)


Provisonal data on aggregate foreign exchange inflow
through the economy indicated that total inflow was US$20.29
billion. This represented a decline of 25.8 ad 45.2 per cent
below the levels in the preceding quarter and the
corresponding period of 2014, respectively. The development
was driven by the fall in receipts from both the CBN and
autonomous sources. Oil sector receipts, which accounted for
19.7 per cent of the total, stood at US$3.99 billion, compared
with US$6.05 billion and US$7.64 billion, recorded in the
preceding quarter and the corresponding period of 2014,
respectively.
Non-oil public sector inflow, at US$3.15 billion (15.5 per cent of
the total), fell by 37.9 per cent below the level in the
preceding
quarter,
but
exceeded
the
level
in
the
corresponding period of 2014 by 4.4 per cent. Autonomous
inflow, which accounted for 64.8 per cent of the total, fell by
18.9 per cent, compared with the level in the preceding
quarter.
Autonomous inflow
into the economy fell
by 18.9 per cent in
Q4 2015 .
-10,000
-5,000


Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
US$ million
Inflow
Outflow
Netflow


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

Economic Report Fourth Quarter

At US$8.62 billion, aggregate foreign exchange outflow from
the economy fell by 21.2 and 41.9 per cent below the levels in
the preceding quarter and the corresponding period of 2014,
respectively. The development, relative to the preceding
quarter, was accounted for by the decline in outflow through
the CBN and autonomous sources. Thus, foreign exchange
flows through the economy resulted in a net inflow of US$11.68
billion in the review quarter, compared with US$16.40 billion
and US$22.18 billion in the preceding quarter and the
corresponding period of 2014, respectively.
5.2
Non-Oil Export Earnings by Exporters
Provisional data showed that total non-oil export earnings, at
US$0.73 billion, decreased by 39.1 and 27.4 per cent, below
the levels in the preceding quarater and the corresponding
period of 2014, respectively. The development, relative to the
preceding quarter, was attributed, mainly, to the significant
decline in receipts from manufactured and agricultural export
products. A breakdown by sectors showed that proceeds
from
minerals,
industrial
sector,
agricultural
products,
manufactured products and food products sub-sectors stood
at US$212.85 million, US$191.60 million, US$143.85 million,
US$106.56 million and US$77.59 million, respectively.
The
percentage
shares
of
minerals,
industrial
sector,
agricultural products, manufactured products and food
products in the total non-oil export proceeds were 29.1, 26.2,
19.6, 14.5 and 10.6, respectively.
5.3
Sectoral Utilisation of Foreign Exchange

The invisible sector accounted for the bulk (40.6 per cent) of
total foreign exchange disbursed in the fourth quarter of 2015,
followed by the industrial sector (21.8 per cent). The
contributions of other sectors in a descending order included:
minerals and oil sector (19.7 per cent), manufactured
products (9.1 per cent), food products (6.1 per cent), transport
sector (1.8 per cent) and agricultural products (0.9 per cent)
(Fig.17).
.
The invisible sector
accounted for the
bulk of the total
foreign exchange
disbursed during
Q4 2015.
Total non-oil export
earnings by
exporters fell
during the fourth
quarter of 2015.


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Economic Report Fourth Quarter

Figure17: Sectoral Utilisation of Foreign Exchange

5.4
Foreign Exchange Market Developments5
At US$27.91 billion, provisional data suggested that aggregate
demand for foreign exchange at the inter-bank and BDC
segments fell by 54.5 per cent below the level in the
preceding quarter. However, it denoted an increase of 88.4
per cent relative to the level in the corresponding period of
2014.
A total of US$7.01 billion was sold by the CBN to authorized
dealers during the fourth quarter of 2015. This reflected a
decline of 12.8 and 44.9 per cent below the levels in the
preceding quarter and the corresponding period of 2014,
respectively. The development, relative to the preceding
quarter, was attributed to the decrease in sales at both the
inter-bank and BDC segments. Of the aggregate, inter-bank,
swaps and BDC sales were US$3.78 billion, US$1.20 billion and
US$0.87 billion, respectively. Also, forward contracts valued at
US$1.16 billion were disbursed at maturity in the review quarter
(Fig. 18, Table 16).


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


Percent of Total
Q2-15
Q3-15
Q4-15
Demand and supply
for foreign exchange
by authorized dealers
fell during Q4 2015.


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Figure 18: Demand for and Supply of Foreign Exchange


Table 16: Demand for and Supply of Foreign Exchange (US$ billion)
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q3-15
Forex Sales at rDAS

MC
MC
MC
Forex Demand at rDAS

MC
MC
MC
Supply of Forex to BDC

Total Forex Supply(BDC and rDAS)


The average exchange rate at the inter-bank segment was
N196.99/US$, same level as in the preceding quarter.
However, it showed a depreciation of 12.6 per cent relative to
the rate in the corresponding quarter of 2014. At the BDC
segment, the average exchange rate, at N238.69 per US
dollar, depreciated by 5.7 and 25.3 per cent relative to their
respective
levels
in
the
preceding
quarter
and
the
corresponding period of 2014 (Fig. 19, Table 17).
Consequently, the premium between the inter-bank and BDC
widened to 21.2 per cent above 14.3 and 3.5 per cent in the
preceding quarter and the corresponding period of 2014,
respectively. This, however, exceeded the international
benchmark of 5.0 per cent (Fig. 20, Table 17).

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
US$ billion
Forex Sales at rDAS
Forex Demand at rDAS
Supply of Forex to BDC
Total Forex Supply
The average naira
exchange rate vis-àvis the US dollar
remained unchanged
at the interbank
segment, but
depreciated at the
BDC segment in Q4
2015.
The premium
between the interbank and the BDC
rates widened in
the review period.


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Economic Report Fourth Quarter

Figure 19: Average Exchange Rate Movements

Table 17: Exchange Rate Movements and Exchange Rate Premium
Average Exchange Rate (N/US$)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
rDAS

169.68 N/A
N/A
N/A
BDC

Interbank

Premium (%)
rDAS/BDC

23.5 N/A
N/A
N/A
rDAS/Interbank

12.6 N/A
N/A
N/A
BDC/Interbank


Figure 20: Exchange Rate Premium

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
N/US $
Average wDAS/rDAS
Average BDC
Average Interbank

Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Per cent
rDAS/BDC
rDAS/Interbank
Interbank/BDC


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5.5
Gross Official External Reserves
Gross external reserves at the end of the fourth quarter of 2015
stood at US$28.29 billion, shwoing a decline of 5.2 and 17.4
per cent below the levels in the preceding quarter and
corresponding period of 2014, respectively. The development,
relative to the preceding quarter, was due to increased
intervention by the Bank at the inter-bank market to stabilize
the naira exchange rate. A breakdown of the official external
reserves showed that CBN reserves stood at US$19.49 billion
(68.9 per cent), Federation reserves, US$2.45 billion (8.7 per
cent) and the Federal Government reserves, US$6.35 billion
(22.4 per cent) (Fig. 21, Table 18).
Figure 21: Gross Official External Reserves


Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
US$ million

Table 18: Gross Official External Reserves (US$ million)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
External Reserves
42,847.3

37,376.4

37,330.0

38,278.6

34,241.5

29,357.2

28,335.2

29,850.1

28,287.6


Gross external
reserves
declined during
the fourth
quarter of
2015.


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6.0 Global Economic Conditions
6.1 Global Output
In October 2015, the International Monetary Fund (IMF)
forecast the global economy to grow by 3.6 per cent in 2016
amidst uncertainties from persisting downside risks and
vulnerabilities. The prospects of rising interest rates in the US,
economic slowdown in China, and higher risk of economic
decline worldwide aggravated uncertainty. Sharp slowdown
in emerging market economies constitutes a drag on global
activity and trade, and have subdued investment and
productivity growth, as well as constrained the momentum of
recovery in the advanced economies.
6.2 Global Inflation
Global inflation generally remained very low, reflecting the fall
in oil prices. Energy prices continued to fall for the 13th
consecutive month in October by 11.6 per cent year-on-year,
while food price inflation picked up to 1.5 per cent. Annual
consumer price inflation in the OECD area was 0.6 per cent in
October 2015, owing to a moderate pickup in food prices and
a less negative contribution from energy prices. Among major
non-OECD economies, headline inflation remained at very
high levels.
Amongst the major emerging economies, consumer price
inflation is set to remain relatively low in China and India.
Inflation is projected to remain stronger for sometime in
countries such as Russia, Brazil and Indonesia, due to the
impact of past currency depreciations, although widening
economic slack should eventually help to ease cost pressures.
In the sub-Saharan Africa region, growth has been weakened
by falling commodity prices and now fragile global financial
conditions. The IMF estimated Africa growth in 2015 at 3.75 per
cent as the strong growth momentum previously observed in
the region has declined.
6.3 Global Commodity Demand and Prices
World crude oil demand was estimated at 93.95 mbd in the
fourth quarter of 2015, representing an increase of 0.3 per cent
above the 93.68 mbd recorded in the preceding quarter.
World crude oil supply in the review quarter was estimated at


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Economic Report Fourth Quarter

95.30 mbd, representing a marginal decline of 0.1 per cent
compared with the level in the preceding quarter.
The price of OPEC Reference Basket (ORB) averaged US$39.90
per barrel in the fourth quarter of 2015, representing a
decrease of 17.1 per cent below the level in the third quarter
of 2015. The development was attributed to persistent
oversupply in the oil market coupled with increasing signs of
slowdown of the Chinese economy. In addition, oil prices were
being driven downward by the appreciation of the US dollar
and fall in equity markets.
6.4
International Financial Markets
Developments in the international stock markets were mixed
during the review period. In Europe, the DAX, MICEX, CAC 40
and FTSE 100 indices increased by 11.2, 7.2, 4.1 and 3.0 per
cent, respectively. In Asia, China’s Shanghai Stock ExchangeA and Japan’s Nikkei 225 indices increased by 15.9 and 9.5
per cent, respectively, while the India’s BSE Sensex declined
by 0.1 per cent.
In North America, the S&P 500 and Mexican Bolsa Indices
increased by 6.5 and 0.8 per cent, respectively, while the
S&P/TSX Composite fell by 2.2 per cent. In South America, the
Argentine Merval index increased by 19.0 per cent, while
Columbian IGBC General and Brazilian Bovespa indices fell by
5.3 and 3.8 per cent, respectively.
In Africa, the South African JSE AS index increased by 1.2 per
cent, while Nigerian All-Share, Egyptian EGX CSE 30, Kenyan
Nairobi NSE 20 and Ghanaian GSE All-Share indices fell by
13.9, 4.3, 3.3 and 0.7 per cent, respectively.
6.5 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 2015 Annual Meetings of the
Board of Governors of the World Bank Group (WBG) and the
International Monetary Fund (IMF) held in Lima, Peru from
October 5 – 11, 2015. At the sidelines meeting of the Group of
Twenty Four Developing Countries (G24) Ministers, it was
noted that growth in the global economy was weaker than


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expected, while Emerging Markets and Developing Countries
(EMDCs) remained the key drivers of global growth. They
called
for
effective,
well-sequenced,
adequately
communicated policy to guard against potential financial
instability risks, including those coming from normalization of
the U.S. monetary policy.
The African Development Bank (AfDB) organized a High-level
Conference on “Feeding Africa” in Dakar, Senegal from
October 21 – 23, 2015. The Conference adopted an action
plan and wide-ranging partnerships to transform African
agriculture into viable agri-business. The following were the key
blocks of the action plan, among others:

Scaling up nutrition programmes across Africa to end
malnutrition and hunger;

Approval of a list of organisations to lead initiatives
aimed at raising agricultural productivity across the
continent, in close partnership with the AfDB, the World
Bank and development partners; and

The
AfDB,
the
African
Union
Commission/New
Partnership for Africa’s Development (NEPAD), the UN
Economic Commission for Africa, the World Bank, the
International Fund for Agricultural Development, and
the United Nations Industrial Development Organization
would work closely with other development partners in
the development of agro-allied industrial zones and
agricultural corridors.
Furthermore, in October 2015, the African Development
Bank (AfDB) successfully launched a new 1 billion US dollar
2-year global benchmark due November 3, 2017. In
addition, the African Development Bank Group (AfDB) and
LAPO Microfinance Bank Ltd (MfB), Nigeria signed a loan
agreement of N2.364 billion (approximately US $12 million)
on November 17, 2015 to support inclusive growth in
Nigeria and also support local SMEs in the country. The
executive directors of the African Development Bank
Group on Tuesday, December 8, 2015 in Abidjan also
approved the institution’s 2016-2018 Work Programme and


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Economic Report Fourth Quarter

Budget, which envisages lending of up to US $33.55 billion
for about 620 projects.
Similarly, the India-Africa Forum Summit was held in New
Delhi, India from October 26 – 29, 2015. The Summit
revealed increased large-scale investments in Africa, as
seen in the substantial flow of funds and services to Africa
through different Indian insutrial groups, notably Mittals, the
Tatas, and the Exim Bank.
Finally, the 10th United Nations Conference on Trade and
Development (UNCTAD) biennial Debt Management
Conference was held in Geneva, Switzerland, from
November 23 - 25, 2015. The Conference provided a forum
for sharing experiences and exchanging views among
governments, international organizations, academia, the
private sector, and civil society on current issues in public
finance, debt management and debt crisis prevention.


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APPENDIX TABLES


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Economic Report Fourth Quarter

Table A1: Money and Credit Aggregates

Sep-14
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
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


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Economic Report Fourth Quarter

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.

Table A2: Money and Credit Aggregates (Growth Rates)
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
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
10.02


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


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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.


Table A3: Federal Government Fiscal Operations (N billion)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Q3-15
Q4-15
Retained Revenue

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Crude

Others/SURE-P

Expenditure

Recurrent

Capital

Transfers

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


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