ECONOMIC REPORT
SECOND 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
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Economic Report Second 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
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Economic Report Second Quarter

Contents


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Economic Report Second Quarter


Text Tables


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Appendix Tables
Figures


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Economic Report Second Quarter

1.0 Summary
Provisional data indicated that growth in the key monetary
aggregate decelerated in the second quarter of 2015. Over the
level at the end of the preceding quarter, broad money supply,
(M2), declined by 1.7 per cent, in contrast to the growth of 1.2 per
cent at the end of the preceding quarter. The decline relative to the
preceding quarter was attributed to the the fall of 0.6 and 12.5 per
cent in foreign assets (net) and other assets (net) of the banking
system, respectively. Over the level at the end-December 2014,
growth in M 2 also decelerated to 0.5 per cent from 1.2 at the end of
first quarter.
Available data indicated mixed developments in banks’ deposit
and lending rates during the second quarter of 2015. The spread
between the weighted average term deposit and maximum lending
rates widened by 1.08 percentage points to 18.6 percentage points
at the end of the second quarter of 2015. Similarly, the margin
between the average savings deposit and the maximum lending
rates, widened by 0.27 percentage point to 23.00 percentage
points. The weighted average inter-bank call rate fell by 0.26
percentage point to 15.17 per cent in the second quarter of 2015,
reflecting the liquidity condition in the inter-bank funds market.
Provisional data indicated that the value of money market assets
outstanding at the end of the second quarter of 2015 fell by 1.3 per
cent to N8,196.96 billion, in contrast to the increase of 8.8 per cent at
the end of the preceding quarter. The development was attributed
to the 1.3 per cent decline in FGN Bonds outstanding. Available
data indicated that developments in the Nigerian Stock Exchange
(NSE) were mixed as some market indicators trended upward, while
others trended downward during the second quarter of 2015.
Total federally-collected revenue stood at N1,485.74 billion,
representing a decline of 39.2 and 27.7 per cent below the 2015
quarterly budget estimate and receipts in the preceding quarter,
respectively. At N839.02 billion, oil receipts, which constituted 56.5
per cent of the total, fell below the 2015 quaterly budget estimate
and receipts in the preceding quarter by 38.2 and 30.7 per cent,
respectively. The fall in oil receipts was attributed, largely, to the
decline in receipts from PPT and Royalties, owing to the persistent fall
in crude oil prices in the international market.
Non-oil receipts, at N646.72 billion, was lower than the 2015 quaterly
budget estimate and the receipts in the preceding quarter by 40.1
and 23.4 per cent, respectively. Federal Government retained


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Economic Report Second Quarter

revenue was N628.72 billion, while total expenditure was N663.59
billion. Thus, the fiscal operations of the Federal Government resulted
in an estimated deficit of N34.88 billion in the second quarter of
2015, compared with the 2015 quarterly budget deficit of N260.25
billion or 1.2 per cent of GDP.
Activities in the agricultural sector increased due to improved level
of widespread rainfall in most parts of the country. Major agricultural
activities in the southern states were harvesting of maize and yam,
while planting, off season harvesting and livestock movement
dominated in the northern states.
Nigeria’s crude oil production, including condensates and natural
gas liquids averaged 1.91 million barrels per day (mbd) or 173.81
million barrels in the quarter. Crude oil export stood at 1.46 mbd or
132.86 million barrels for the quarter, while deliveries to the refineries
for domestic consumption remained at 0.45 mbd or 40.95 million
barrels. The average price of Nigeria’s reference crude, the Bonny
Light (370 API), rose by 9.7 per cent above the level in the preceding
quarter.
The end-period headline inflation rate (year-on-year) was 9.2 per
cent, compared with the 8.5 and 8.2 per cent recorded at the end
of the preceding quarter and the corresponding quarter of 2014,
respectively. Inflation rate on a twelve-month moving average basis
was 8.4 per cent, compared with 8.2 per cent in the preceding
quarter.
Provisional data indicated that foreign exchange inflow and outflow
through the Central Bank of Nigeria (CBN) amounted to US$6.97
billion and US$8.20 billion, respectively, resulting in a net outflow of
US$1.22 billion. Foreign exchange sales by the CBN to the authorized
dealers amounted to US$7.35 billion, compared with US$10.9 billion in
the preceding quarter. The average exchange rate of the naira visà-vis the US dollar at the inter-bank window was N196.97 per US
dollar in the review quarter. Relative to their respective levels in the
preceding quarter, the naira depreciated by 3.0 and 2.6 per cent at
the inter-bank and bureau-de-change segments of the market,
respectively.
The International Monetary Fund (IMF) World Economic Outlook
(WEO) July 2015 update projected global growth at 3.3 per cent in
2015. This represented a downward revision of 0.2 per cent from the
projected level in April 2015, reflecting a reassessment of prospects
in North America, China, and the emerging market economies.
World crude oil demand was estimated at 91.55 mbd in the second


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quarter of 2015, representing a decline of 0.23 per cent below the
91.76 mbd recorded in the first quarter of 2015. World crude oil
supply was estimated at 94.4 mbd in the second quarter,
representing a marginal increase of 0.1 per cent from the 94.3 mbd
recorded in the first quarter of 2015. The development was attributed
to the increased demand for transportation fuels for the summer
driving season.
Other major international economic developments and meetings of
importance to the domestic economy during the review period
included: the 2015 Spring Meetings of the Board of Governors of the
World Bank Group (WBG) and the International Monetary Fund (IMF)
held in Washington D.C., USA from April 13 – 19, 2015. Also, the
Association of African Central Banks (AACB) 2015 Continental
Seminar was held in Nairobi, Kenya from May 13 – 15, 2015. The
theme of the Seminar was “Monetary Policy Frameworks in Africa in
a Changing Financial Landscape”. Finally, the 2015 Annual Meetings
of the African Development Bank (AfDB) was held in Abidjan, Cote
d’Ivoire from May 25 – 29, 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
aggregate decelerated at the end of the second quarter of 2015.
Developments in banks’ deposit and lending rates were mixed
during the review quarter. The value of money market assets
outstanding decreased, due largely, to the fall in FGN Bonds.
Developments in the Nigerian Stock Exchange (NSE) were mixed as
some market indicators trended upward, while others trended
downward.
Provisional data indicated that growth in the key monetary
aggregate decelerated at the end of the second quarter of
2015. Relative to the level at the end of the first quarter of
2015, broad money supply, (M2), quarter-on-quarter, fell by 1.7
per cent to N18,811.4 billion at end-June 2015, in contrast to
the growth of 1.2 per cent at the end of the preceding
quarter. The decline relative to the preceding quarter was
attributed to the respective fall of 12.5 and 0.6 per cent in
other assets (net) and foreign assets (net) of the banking
system, which more than offset the 3.1 per cent increase in
domestic credit (net) of the banking system. Analysis of
monetary developments relative to the levels at endDecember

showed
that
broad
money
growth
decelerate from 1.2 per cent at the end of the first quarter of
2015 to 0.5 per cent at the end of second quarter of 2015. The
development was attributed to the sustained tight monetary
policy stance of the CBN. The outcome at the end of the
corresponding quarter of 2014, however, showed an increase
of 1.66 per cent over the preceding December.
Narrow money supply (M1), quarter-on-quarter, at N6,542.4
billion, declined by 6.5 per cent at the end of the review
quarter, in contrast to the 1.3 per cent growth recorded at the
end of the preceding quarter. The development, relative to
the first quarter of 2015, was attributed to the 19.5 and 3.1 per
cent decrease in its currency outside bank and demand
deposit components, respectively. Relative to the level at the
end-December 2014, narrow money supply (M 1), decline by
5.3 per cent at the end of the second quarter of 2015. The
development was attributed to the 17.6 and 2.0 per cent
decline in its currency outside bank and demand deposit
Growth in key
monetary
aggregate
decelerated during
Q2 2015.


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Economic Report Second Quarter

components, respectively. This was in constrast to the growth
of 0.9 per cent recorded at the end of the corresponding
quarter of 2014.
Quasi-money quarter-on-quarter, rose by 1.0 per cent to
N12,269.0 billion at the end of the second quarter of 2015,
compared with the growth of 1.2 and 3.6 per cent at the end
of the preceding quarter and the corresponding quarter of
2014, respectively. The development relative to the preceding
quarter was attributed to the increase in time and savings
deposits with banks (Fig. 1, Table 1). Relative to the level at
end-December 2014, quasi money grew by 2.2 per cent at the
end of second quarter of 2015.
Figure 1: Growth Rate of Narrow Money (M1) and Broad Money (M2)1

At N21,409.8 billion, aggregate banking system’s credit (net)
to the domestic economy, quarter-on-quarter, grew by 3.1 per
cent at the end of the second quarter of 2015, compared with
the growth of 7.7 per cent at the end of the first quarter. This,
however, contrasted with the decline of 7.8 per cent at the
end of the corresponding quarter of 2014. The development
relative to the level at the end of the first quarter of 2015,

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

-15
-10
-5

-10
-5

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


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Economic Report Second Quarter

reflected the 1.7 per cent growth in credit to the private
sector, which more than offset the 15.3 per cent fall in net
claims on the Federal Government. Relative to end-
December 2014, domestic credit grew by 11.1 per cent at the
end of second quarter 2015, compared with the growth of
14.8 per cent recorded at the end of second quarter of 2014.
The development relative to the preceding quarter, was
attributed to 118.5 and 4.3 per cent growth in banking claims
on the Federal Government and the private sector,
respectively.
Banking system’s credit (net) to the Federal Government,
quarter-on-quarter, fell by 15.3 per cent to negative N2,512.5
billion, in contrast to the growth of 89.4 and 114.3 per cent at
the end of the preceding quarter and the corresponding
quarter of 2014, respectively. The development relative to the
first quarter of 2015 was due, largely, to the 13.9 per cent
reduction in the banking system’s holdings of FGN Bonds.
Relative to end-December 2014, credit to the Federal
Government grew by 118.5 per cent at the end of second
quarter of 2015, compared with the growth of 85.8 per cent
recorded at the end of second quarter of 2014.
At the end of the second quarter of 2015, banking system’s
credit to the private sector, quarter-on-quarter, grew by 1.7
per cent to N18,897.3 billion, compared with the growth of 2.5
and 2.9 per cent at the end of the preceding quarter and the
corresponding quarter of 2014, respectively. The development
relative to the level at the end of the preceding quarter was
attributed to the 2.0 per cent growth in claims on the core
private sector (Fig. 2, Table 1). Relative to the end-December
2014, credit to the private sector grew by 4.3 per cent at the
end of second quarter 2015, compared with the growth of 4.5
per cent recorded at the end of second quarter of 2014.


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Economic Report Second Quarter

Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy2

At N5,951.5 billion, foreign assets (net) of the banking system,
quarter-on-quarter, fell by 0.6 per cent at the end of the
second quarter of 2015, compared with the decline of 13.9
per cent at the end of the first quarter of 2015. This, however,
contrasted with the 16.2 per cent growth in foreign assets (net)
of the banking system at the end of the corresponding quarter
of 2014. The development relative to the preceding quarter,
was attributed to the 75.4 per cent decrease in the foreign
assets holding of banks, which more than offset the 8.2 per
cent growth in net foreign assets holdings of the CBN. Relative
to end-December 2014, foregin asset (net) fell by 14.4 per
cent, compared with a decline of 11.4 per cent recorded at
the end of second quarter of 2014.
Other assets (net) of the banking system, quarter-on-quarter,
declined by 12.5 per cent to negative N8,549.8 billion at the
end of the review quarter, compared with the decline of 3.9
per cent at the end of the preceding quarter. This contrasted
with the 2.6 per cent growth recorded at the end of the
corresponding quarter of 2014. The development relative to
the preceding quarter, reflected the decline in other assets
(net) of the both the CBN and banks. Relative to endDecember 2014, other asset (net) fell by 16.9 per cent, in

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

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


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Economic Report Second Quarter

constrast to the 9.5 per cent growth recorded at the end of
second quarter of 2014.
Table 1: Growth in Monetary and Credit Aggregates (Per cent) Over
Preceding Quarter
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-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 N1,562.3 billion, currency-in-circulation, quarter-on-quarter,
fell by 14.1 per cent at the end of the second quarter of 2015,
in contrast to the increase of 1.1 per cent at the end of the
first quarter of 2015. At the end of the corresponding period of
2014, currency-in-circulation also declined by 4.9 per cent. The
development relative to the first quarter of 2015, was
attributed, largely, to the 19.5 per cent fall in currency outside
bank. Relative to end-Decmber 2014, currency - in -
circulation fell by 13.1 per cent at the end of the second
quarter of 2015, compared with the decline of 115.7 per cent
recorded at the end of the second quarter of 2014.

Total deposits at the CBN rose by 0.6 per cent to N6,908.0
billion, in contrast to the decline of 12.3 per cent at the end of
the first quarter of 2015. The development reflected, largely,
the respective increase of 6.4 and 56.4 per cent in banks and
private sector deposits. Of the total deposits, the shares of the
Federal Government, banks and ‘’Others’’ were N2,296.5
billion (33.2 per cent), N4,383.4 billion (63.5 per cent) and
N228.1billion (3.3 per cent), respectively.
Reserve money (RM), at N5,945.8 billion, quarter-on-quarter,
rose by 0.2 per cent at the end of second quarter of 2015,
Reserve money
(RM) rose at the
end of the second
quarter of 2015.


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Economic Report Second Quarter

compared with the 0.1 per cent growth recorded at the end
of the first quarter of 2015. The development, relative to the
level at the end of the preceding quarter, was attributed to
the 6.4 per cent increase in banks’deposit with the CBN.
Relative to end-December 2014, reserve money grew by 0.3
per cent at the end of second quarter 2015, in constrast to the
decline of 5.9 per cent recorded at the end of second quarter
of 2014.
2.3
Money Market Developments
Money market rates reflected liquidity conditions in the review
period. Major money market rates were generally lower than
their levels in the preceding quarter as Federation Account
injections and payments of matured bills and bonds buoyed
liquidity conditions in the market. Open Market Operations
(OMO) was used to moderate the level of liquidity in the
system. Consequently, excess liquidity mop-up through OMO
during the review period amounted to N2,000.50 billion,
compared with N2, 057.07 billion in the preceding quarter.
Both Nigerian Treasury Bills (NTBs) and FGN Bonds were issued
during the review period with impressive patronage. Also, the
Bank intervened in the foreign exchange market through the
provision of liquidity to sustain the stability of rates. The Bank
also announced measures to reduce demand pressure on the
foreign exchange market, including imposition of restriction on
foreign exchange allocation to goods that could possibly be
produced in the country.
Provisional data indicated that the total value of money
market assets outstanding at the end of the second quarter of
2015 stood at N8,196.96 billion, showing a decline of 1.3 per
cent, in contrast to the 8.7 per cent increase at the end of the
preceding quarter. The development was attributed largely,
to the 1.3 per cent fall in the FGN Bonds outstanding.
2.3.1
Interest Rate Developments
Available data indicated mixed developments in banks’
deposit and lending rates during the second quarter of 2015.
The average svaings, one-month and 12-month deposit rates
rose by 0.03, 0.35 and 1.31 percentage points to 3.60, 8.85 and
8.16 per cent, respectively. However, all other rates of various
maturites fell from a range of 4.46 – 9.70 per cent to 4.09 – 9.28
per cent. At 7.91 per cent, the average term deposit rate fell
Money market
rates were
generally lower
during the review
period.
The spread between
the weighted –
average term deposit
and maximum lending
rates widened at the
end of the second
quarter.


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Economic Report Second Quarter

by 0.63 percentage point below the level in the first quarter of
2015. The maximum lending rate rose by 0.30 percentage
point to 26.60 per cent, while the prime lending rate fell by
0.44 percentage point to 16.40 per cent. Consequently, the
spread between the weighted average term deposit and
maximum lending rates widened by 1.08 percentage points to
18.60 percentage points at the end of the second quarter of
2015. The spread between the average savings deposit and
the
maximum
lending
rates,
also,
widened
by
0.27
percentage point to 23.0 percentage points, compared with
22.73 percentage points in the first quarter of 2015. With the
headline inflation rate at 9.2 per cent at end-June 2015,
lending rates were positive, while deposit rates were negative
in real terms except for the 3- and 6- month deposit rates.
At the inter-bank funds segment, the weighted average interbank call rate, which stood at 15.43 per cent at the end of the
preceding quarter, fell by 0.23 percentage point to 15.20 per
cent in the second quarter of 2015, reflecting the liquidity
condition in the banking system. However, the weighted
average rate at the Open-Buy-Back (OBB) segment fell by
2.01 percentage points to 15.60 per cent. The Nigeria Interbank Offered Rate (NIBOR) for the 7-day tenor rose to 18.8
per cent above 12.16 per cent in the preceding quarter.
However, the 30-day tenor declined from 14.90 per cent in the
preceding quarter to 14.20 per cent in the second quarter of
2015 (Fig. 3, Table 2).
Interbank call
rate fell in Q2
2015.


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Economic Report Second Quarter

Figure 3: Selected DMBs Interest Rates (Average)


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

Prime Lending

Interbank

Maximum Lending


2.3.2
Commercial Paper (CP)
Commercial Paper (CP) outstanding held by DMBs fell by 26.7
per cent to N6.7 billion at the end of the second quarter of
2015, compared with N9.1 billion at the end of the preceding
quarter. The development was due to the fall in investment in
CP by the commercial banks during the review quarter. Thus,
CP constituted 0.08 per cent of the total value of money
market assets outstanding, at the end of the review period,
compared with 0.11 per cent at the end of the preceding
quarter.
2.3.3
Bankers’ Acceptances (BAs)
At the end of the review quarter, the value of BAs outstanding
declined by 58.7 per cent to N8.6 billion, compared with N20.8
billion at the end of the preceding quarter. The development
was attributed to the decline in investment in BAs by the DMBs

Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Percent per Annum
Percent per Annum
Prime
Interbank
Maximum
Average Term Deposits (RHS)
Investment in
CP by banks fell
in the second
quarter of 2015.
DMBs’ holdings of
BAs declined
during Q2 of
2015.


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Economic Report Second Quarter

during the quarter. Consequently, BAs accounted for 0.10 per
cent of the total value of money market assets outstanding at
the end of the second quarter of 2015, compared with 0.25
per cent at the end of the preceding quarter.
2.3.4 Open Market Operations
At the Open Market Operations (OMO), bills with tenors
ranging from 9 to 301 days were used for liquidity
management in the second quarter of 2015. Consequently,
there were 18 auctions and 9 maturities during the review
period. Total sales and subscription were N2,204.65 billion and
N2,725.96 billion, respectively, in the second quarter of 2015.
The bid rates ranged from 10.25 to14.85 per cent, while the
stop rates were between 11.45 to 14.84 per cent. Matured bills
amounting to N1,760.08 billion were repaid, translating to a
net withdrawal of N444.57 billion in the review period.
2.3.5
Primary Market
At the primary market segment, NTBs of 91-, 182- and 364-day
tenors were offered. Total amount offered, subscribed to and
allotted were N4,350.33 billion, N2,361.0 billion and N994.63
billion, respectively. The bid rates ranged from 7.50 to 15.00,
10.00 to 15.69 and 10.00 to 16.55 per cent, respectively, for the
91-, to 182- and 360-day tenors, while the stop rates were from
9.79 to 10.50, 12.70 to14.10 and 12.80 to14.15 per cent,
respectively. In the preceding quarter, a total of N1,239.13
billion, N2,852.21 billion and N1,239.13 billion, were offered,
subscribed to and allotted, respectively, for the three tenors,
indicating 19.7 per cent decline in total amount alloted.
2.3.6
Bonds Market
Tranches of FGN Bonds of 5-, 10- and 20-year tenors were reopened during the review period. The total amount offered,
subscribed to and allotted were N210.22 billion, N499.86 billion
and N210.22 billion, respectively. In addition, total of N64.4
billion of the 5-year and 10-year bond was allotted on noncompetitive basis. The marginal rates for the 5-year bond
ranged from 13.84 to14.44 per cent, 13.48 to14.22 per cent for
the 10-year and 13.88 to 14.45 per cent for the 20-year tenor.
Consequently, the marginal rates for the three tenors ranged
from 13.48 to14.45 per cent.

Subscription for FGN
Bonds of various
maturities were
reopened during the
second quarter of
2015.


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Economic Report Second Quarter

2.3.7
CBN Standing Facilities
Total request for the standing lending facility (SLF) granted
during the review period was N1,081.84 billion (inclusive of
intra-day liquidity facility converted to overnight repo),
compared with N1,734.26 billion in the first quarter of 2015.
Total standing deposit facility (SDF) granted during the review
period was N4,118.89 billion, while the cost incurred stood at
N1.997 billion, compared with the request of N4,834.06 billion
and total cost of N2.286 billion in the preceding quarter.
2.4
Deposit Money Banks’ Activities
Available data indicated that the total assets and liabilities of
the commercial banks stood at N28,400.8 billion at the end of
the second quarter of 2015, representing a decline of 1.1 per
cent below the level at the end of the preceding quarter. The
funds were sourced, largely, from foreign and unclassified
assets disposal as well as draw-down on reserves. The funds
were used, mainly, to increase capital accounts.
At N17, 086.2 billion, banks’ credit to the domestic economy,
fell by 1.1 per cent, in contrast to the 4.4 per cent growth in
the preceding quarter. The development was attributed to
the decline in claims on the Federal Government and the
private sector, in the review quater.
Central Bank’s credit to the commercial banks rose by 5.3 per
cent to N303.4 billion at the end of the review quarter,
reflecting increase in CBN loans and advances to banks over
the level at the end of the preceding quarter. Total specified
liquid assets of the banks stood at N6,348.1 billion, representing
35.8 per cent of their total current liabilities. At that level, the
liquidity ratio fell by 0.7 percentage point below the level in
the preceding quarter, but was 5.8 percentage points above
the stipulated minimum ratio of 30.0 per cent. The loans-todeposit ratio, at 67.8 per cent, was 1.6 percentage points
above the level at the end of the preceding quarter, but was
12.2 percentage points below the prescribed maximum of
80.0 per cent.
2.5
Discount Houses’ Activities
Total assets/liabilities of the discount houses stood at N175.4
billion at the end of the second quarter of 2015, indicating an
At 35.8 per cent,
liquidity ratio in Q2 2015
was 8.2 percentage
points above the
stipulated minimum
ratio, while the Loan-todeposit ratio was below
the prescribed
maximum of 80 per
cent.


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Economic Report Second Quarter

increase of 60.3 per cent above the level at the end of the
preceding quarter. The increase in assets relative to the level
at the end of the first quarter of 2015 was accounted for,
mainly, by the 84.5, 58.8 and 45.9 per cent rise in other assets,
claims on banks and Federal Government, respectively.
Correspondingly, the increase in total liabilities was attributed
to the 503.9, 161.9 and 56.8 per cent increase in takings,
capital and reserves, and other liabilities, respectively.
Discount houses’ investment in Federal Government securities
increased by 33.3 per cent to N67.2 billion and represented
59.2 per cent of their total deposit liabilities. At this level,
discount houses’ investment was 0.8 percentage point below
the prescribed minimum level of 60.0 per cent for fiscal 2015.
Total borrowings by the discount houses was N61.0 billion,
while their capital and reserves stood at N35.0 billion. This
resulted in a gearing ratio of 1.7:1, compared with the
stipulated maximum of 50:1 for the fiscal year.
2.6
Capital Market Developments
2.6.1
Secondary Market
Available data indicated that developments in the Nigerian
Stock Exchange (NSE) were mixed during the second quarter
of 2015. Total volume and value of traded securities fell by 4.7
and 0.4 per cent to 24.7 billion shares and N277.9 billion,
respectively, in 273,502 deals in the review period, compared
with 25.9 billion shares and N279.1 billion, respectively, in
261,116 deals in the first quarter of 2015. The Financial Services
Industry (measured by volume and value of transactions) led
the activity chart with 19.3 billion shares valued at N139.098
billion, traded in 153,842 deals; thus contributing 77.9 and 50.1
per cent to the total equity turnover volume and value,
respectively, compared with 20.6 billion shares valued at
N144.8 billion traded in 160,155 deals in the preceding quarter.
This was followed by the activities in the Conglomerates
Industry. The Banking sub-sector of the Financial Services
Sector was the most active with 11.3 billion shares valued at
N112.2 billion traded in 97,082 deals 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 Second Quarter

Figure 4: Volume and Value of Traded Securities

Table 3: Traded Securities on the Nigerian Stock Exchange (NSE)
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Volume (Billion)

Value (NBillion)


2.6.2
New Issues Market
There were thirteen (13) supplementary listings in the review
quarter (see table 4 below).
Table:4 New and Supplementary Listing on the Nigerian Stock Exchange
First Quarter 2015
S/N Company
Additional Shares (Units)
Reasons
Listing
1 FBN Holdings Plc
3.263 billion shares
Bonus Issue
Supplementary
2 Glaxo Smithkline Consumer Nig. Plc
239.175 million shares
Bonus Issue
Supplementary
3 Nigeria Aviation Handling Company Plc
147.656 millkon shares
Bonus Issue
Supplementary
4 Vitafoam Nigeria Plc
163.8 million shares
Bonus Issue
Supplementary
5 Sye Bank Plc
660.966 million
Bonus Issue
Supplementary
6 Pharma Deko Plc
116.819 million
Rights Issue
Supplementary
7 Prestige Assurance Plc
3.01 billion shares
Rights Issue
Supplementary

Champion Brewries Plc
629.496 million shares
Placing
Supplementary

Diamond bank plc
8.69 billion Ordinary shares
Rights Issue
Supplementary
10 McNICHOLS CONSOLIDATED PLC
68,114,665 ordinary shares
Conversion to ordinary SharesSupplementary
11 OANDO PLC
2,949,933,156 ordinary shares
Rights Issue
Supplementary
12 PHARMA DEKO PLC
482,754 Ordinary Shares
additional issues
Supplementary
13 INTERNATIONAL BREWERIES PLC
31,722,850 ordinary shares
bonus declaration
Supplementary

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


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

Economic Report Second Quarter

2.6.3
Market Capitalization
Aggregate market capitalization for all listed securities
(equities and bonds) stood at N17.02 trillion at the end of the
review quarter, indicating an increase of 4.7 per cent above
the level
in
the
preceding
quarter. Similarly, market
capitalization for the listed equities rose by 6.6 per cent above
the level in the preceding quarter to close at N11.43 trillion at
the end of the review quarter. Listed equities accounted for
67.2 per cent of the aggregate market capitalization,
compared with 66.0 per cent at the end of the preceding
quarter.
2.6.4 NSE All-Share Index
The All-Share Index, which opened at 31,744.82 at the
beginning of the quarter, closed at 33,456.83, representing an
increase of 5.4 per cent above the level at the end of the
preceding quarter. At end-June 2015, with the exception of
the NSE Oil/Gas and NSE ASeM indices, which fell by 2.3 and
0.1 per cent below their respective levels at the end of
preceding quarter, all the other five sectoral indices rose
above their levels in the preceding quarter. The NSE Banking,
NSE Insurance, NSE Consumer goods, NSE Lotus Islamic and
NSE Industrial indices increased by 1.7, 0.7, 5.0, 7.6 and 15.5
per cent, to close at 370.18, 145.65, 845.06, 2,228.86 and
2,229.07, respectively, at the end of the review period.
Total market
capitalization rose,
while All-Share
Index declined
during Q2 2015.


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

Economic Report Second Quarter

Figure 5: Market Capitalization and All-Share Index

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

All-Share Index (Equities)
36,164.31

36,585.08

41,329.19

38,748.01

42,482.48

41,210.10

34,657.15

31,744.82

33,456.86


Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
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 Second Quarter

3.0
Fiscal Operations
3.1
Federation Account Operations
Available data showed that total federally-collected revenue
during the second quarter of 2015 stood at N1,485.73 billion,
reflecting a decline of 39.2 and 27.7 per cent, compared with
the provisional quarterly budget estimate3 of N2,444.60 billion
and receipts of N2,055.27 billion in the preceding quarter,
respectively. The development relative to the budget
estimate was attributed to the decline in oil and non-oil
revenue during the review period (Fig. 6, Table 6).
Figure 6: Components of Gross Federally Collected Revenue

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

Oil Revenue

Non-Oil Revenue


At N839.02 billion, gross oil receipts, which constituted 56.5 per
cent of the total, fell by 38.2 and 30.7 per cent below the
provisional quarterly budget estimate of N1,357.80 billion and
receipts of N1,210.77 billion in the preceding quarter,
respectively. The decline in oil revenue relative to the budget

3 2015 Approved Budget Estimate was used

Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Oil Revenue Gross
Non-Oil Revenue
Gross federally -
collected revenue
declined by 27.7
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 Second Quarter

estimate was attributed, mainly, to the fall in receipts from PPT
and Royalties, owing to the persistent fall in crude oil prices in
the international market, during the review quarter (Fig. 7,
Table 7).

Figure 7: Gross Oil Revenue and Its Components

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


Non-oil receipts (gross), at N646.72 billion (43.5 per cent of the
total), was below the provisional budget estimate and
receipts in the preceding quarter by 40.5 and 23.4 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).
-


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

Figure 8: Gross Non-Oil Revenue and its Components

Table 8: Components of Gross Non-Oil Revenue (N billion)
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
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 during the review
quarter, the sum of N898.58 billion (net deductions) was
transferred to the Federation Account for distribution among
the three tiers of government and the 13.0% Derivation Fund.
The sum of N98.83 billion, N195.05 billion and N57.75 billion
were transfred to the Federal Governmnet Independenmt
Revenue, VAT pool account and Others, repectively. The
Federal Government received N430.41 billion, while the state
and
local
governments
received
N218.31
billion
and
N168.31billion, respectively. The balance of N81.56 billion was
allocated to the 13.0% Derivation Fund for distribution among
the oil-producing states. Also, the Federal Government
received N29.26 billion from the VAT Pool Account, while the
state and local governments received N97.53 billion and
N68.27 billion, respectively.
Thus, the total statutory and VAT revenue allocation to the
-

1,000
1,200
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
N billion
Others
Customs & Excise Duties
Companies Income Tax & Other Taxes
Value-Added Tax (VAT)
The
sum
of
N898.58
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.


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Economic Report Second Quarter

three tiers of government in the second quarter of 2015
amounted to N1,211.67 billion, compared with the provisional
quarterly budget estimate of N1,994.77 billion and N1,616.44
billion in the preceding quarter.
3.2
The Fiscal Operations of the Three Tiers of
Government

3.2.1
The Federal Government

At N628.72 billion, the estimated Federal Government retained
revenue for the second quarter of 2015 was lower than both
the provisional budget estimate and the receipts in the
preceding quarter by 32.4 and 38.8 per cent, respectively. Of
this amount, the Federal Government’s share from the
Federation Account, VAT, NNPC Refund, NNPC additional
revenue and “Others” accounted for 68.5, 15.7, 4.7, 3.0, 0.6
and 7.5 per cent, respectively (Fig. 9, Table 9).
Figure 9: Federal Government Retained Revenue

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

Expenditure

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


Federation
Account (68.5%)
VAT Pool
Account
(4.6%)
Others(11.2
%)
FGN Independent
Revenue (15.7%)
Federal government
estimated
retained
revenue was lower
than both the 2015
provisional quarterly
budget estimate and
the receipts in the
preceding quarter by
32.4 and 38.8 per
cent, respectively.


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

Economic Report Second Quarter

Total Federal Government estimated expenditure for the
second quarter of 2015 stood at N663.59 billion, indicating a
decline of 44.2 and 42.6 per cent below the provisional
quarterly budget estimate and the level in the preceding
quarter, respectively. The development relative to the
proportionate quarterly budget estimate was attributed,
mainly, to the fall in both the capital and recurrent
components during the period. A breakdown of the total
expenditure
showed
that
the
recurrent
component
accounted for 91.1 per cent, while capital and statutory
transfers components accounted for 0.8 and 8.1 per cent,
repectively (Fig. 10). A further breakdown of the recurrent
expenditure
showed
that
the
non-debt
component
accounted for 74.9 per cent, while debt service payments
accounted for the balance of 25.1 per cent.
Thus, the fiscal operations of the Federal Government resulted
in a deficit of N34.88 billion, compared with the 2015
provisional quarterly budget deficit of N260.25 or 1.2 per cent
of GDP.
Figure10: Federal Government Expenditure

3.2.2
Statutory Allocations to State Governments

Total
allocation
to
state
governments
(including
the
Federation Account, 13.0% Derivation Fund and VAT) stood at
N433.29 billion during the review quarter. This was 38.0 and
24.9 per cent lower than both the provisional budget estimate
and the level in the preceding quarter, respectively. Further
Recurrent
Capital
Transfers
Capital
(0.8%)
Transfers
(8.1%)
Recurrent
(91.1%)
Fiscal operations
of the FG resulted
in an estimated
deficit of N34.88
billion in
Q2
2015.


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

Economic Report Second Quarter

breakdown showed that receipts from the Federation
Account was N335.77 billion (77.5 per cent), while VAT
contributed N97.53 billion (22.5 per cent). The share of
Federation Account was 30.4 per cent lower than the level in
the preceeding quarter. Receipts from the VAT Pool Account
was 3.8 per cent higher 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 second quarter
of 2015 stood at N254.32 billion. This was 40.8 and 22.1 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 N186.06 billion
(73.2 per cent), while VAT Pool Account accounted for the
balance of N68.27 billion (26.8 per cent).
3.2.4 Public Debt and Debt Payment

3.2.4.1
Consolidated Federal Government Debt

At N10,428.49 billion or 11.9 per cent of GDP, the consolidated
Federal Government debt at end-second quarter 2015 was
higher than its level at first quarter of 2015 by 0.5 per cent. The
breakdown comprised domestic debt, N8,396.59 billion and
external debt, N2,031.90 billion (US$10.32 billion) (Fig. 11, Table
10).
Figure 11: Composition of Consolidated Federal Government Debt Stock
External
Debt
19.5%
Domestic
Debt
80.5%


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

Economic Report Second Quarter

Table 10: Consolidated Debt of the Federal Government (N’billion)
Type
Q3-14
Q4-14
Q1-15
Q2-15
External Debt
1,497.40

1,647.84

1,864.43

2,031.90

Domestic Debt
7,651.10

7,904.03

8,507.55

8,396.50

Total
9,148.50

9,551.87

10,371.98

10,428.40


3.2.4.2 Domestic Debt

The domestic debt stock of the Federal Government at endsecond quarter of 2015 stood at N8,396.59 billion, representing
a decrease of 1.3 per cent below the level of N8,507.55 billion
recorded at end-March 2015. The decrease was due to the
reduction in the issuance of Nigerian Treasury Bills and FGN
Bonds. The stock of FGN Bonds and Treasury Bills fell by 1.3 and
1.4 per cent, respectively, and accounted for 96.8 per cent of
the total debt stock. The banking system remained the
dominant
holder
of
the
outstanding
domestic
debt
instruments with N5,700.92 billion or 67.9 per cent, while the
non-bank public accounted for N2,695.67 billion or 32.1 per
cent.
3.2.4.3
External Debt
At US$10.32 billion, the external debt stock of the Federal
Government for the second quarter of 2015 rose above the
level at end-March 2015 by 9.1 per cent. In naira terms, the
rise in external debt stock moderated to 9.0 per cent above
the level at end-March 2015 due to the appreciation in the
naira exchange rate. The composition of external debt stock
showed that multilateral debt stood at US$7.23 or 70.1 per
cent of the total. The non-Paris bilateral and commercial
debts, at US$3.08 billion, accounted for the balance.
3.2.4.4 Debt Service Payments
The total debt service payments for second quarter of 2015
stood at N227.35 billion or 1.0 per cent of GDP. This comprised
N9.85 billion (US$49.99 million) for external debt service and
N217.50 billion for domestic debt service. Overall, total debt
service payments fell by 31.5 per cent below the level in first
quarter of 2015 (Fig. 12, Table 11).


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

Economic Report Second Quarter

Figure 12:Composition of Consolidated Federal Government Debt Payment
External
Debt
4.3%
Domestic
Debt
95.7%

Table 11: Consolidated Debt Service Payment of the Federal Government (N,Billion)
Type
Q3-14
Q4-14
Q1-15
Q2-15
External Debt

Domestic Debt

Total


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

Economic Report Second Quarter

4.0
Domestic Economic Conditions
The agricultural sub-sector in the second quarter of 2015, witnessed
an increased level of activities as a result of widespread rainfall in
most parts of the country. Major agricultural activities in the southern
states were harvesting of maize and yam, while planting, off season
harvesting and livestock movement were undertaken in the northern
states. Crude oil production was estimated at 1.91 million barrels per
day (mbd) or 173.81 million barrels for the quarter. The end-period
inflation rate for the second quarter of 2015, on year-on-year basis,
was 9.2 per cent, compared with 8.5 and 8.2 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 8.4 per cent, compared with 8.2 per cent at the end of the
preceding quarter.
4.1
Agricultural Sector
Available data indicated that the tempo of agricultural
activities increased during the review quarter as a result of
widespread rainfall recorded in most parts of the country.
Major agricultural activities in the southern states were
harvesting of maize and yam while planting, off season
harvesting and livestock movement were undertaken in the
northern states. However, high incidence of cattle rustling,
Fulani herdsmen/farmers clashes and insecurity in the
northeast continued to impact negatively on agricultural
output during the quarter.
4.2
Agricultural
Credit
Guarantee
Scheme
Operations
A total of N2,681.0 million was guaranteed to 14,229 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the second quarter of 2015. This amount represented a
decline of 2.9 and 19.1 per cent below the levels in the
preceding quarter and the corresponding period of 2014,
respectively. Sub-sectoral analysis showed that food crops
obtained the largest share of N1, 874.6 million (69.9 per cent)
guaranteed to 10,635 beneficiaries, livestock got N268.9
million (10.0 per cent) guaranteed to 859 beneficiaries, cash
crops received N185.5 million (6.9 per cent) guaranteed to 828
beneficiaries, while N129.0 million (4.8 per cent) was
guaranteed to 890 beneficiaries in the mixed crops sub-sector,
fisheries had N96.5 million (3.6 per cent) guaranteed to 280


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

Economic Report Second Quarter

beneficiaries, while “Others” received N126.4 million (4.7 per
cent) guaranteed to 737 beneficiaries.
Analysis by state showed that 34 states of the Federation and
the Federal Capital Territory benefited from the Scheme in the
quarter with the highest and lowest sums of N319.4 million (11.9
per cent) and N0.4 million (0.01 per cent) guaranteed to Kogi
and Borno states, respectively.
At end-June 2015, the total amount released by the CBN
under the Commercial Agriculture Credit Scheme (CACS) to
the participating banks for disbursement stood at N287.5
billion for 369 (three hundred and fifty three) projects (Table
12).


4.3
Industrial Production
Industrial activities declined during the second quarter of 2015
relative to the level in the preceding quarter. At 110.2
(2010=100), the estimated index of industrial production fell by
5.9 and 6.6 per cent below the levels in the preceding quarter
of 2015 and the corresponding quarter of 2014, respectively.
The decline was attributed to the lower level of activities in the
manufacturing and power sub-sectors.
The estimated index of manufacturing production, at 185.1
Industrial
activities fell in
the review
quarter due to
decreased
activities in the
manufacturing
and power subsectors.
Table 12: Disbursement of Credit Under the Commercial Agriculture Credit Scheme (CACS)
S/N
Participating Banks
Amt Disbursed (N billion)
Number of Projects/State Governments

United Bank for Africa (UBA) Plc
45.8

Zenith Bank
52.3

First Bank of Nigeria Plc
36.5

Unity Bank Plc
24.2

Union Bank Nigeria PLC
20.1

Stanbic IBTC Bank
17.3

Sterling Bank Plc
15.6

Access Bank Plc
13.6

Fidelity Bank Plc
10.9

Skye Bank Plc
9.7

GTBank Plc
11.4

FCMB Plc.
7.3

ECOBANK
6.4

Heritage Bank Plc
3.2

Diamond Baqnk Plc
4.4

Citibank Plc
3.0

Keystone Bank
2.2

Mainstreet Bank
2.0

Wema Bank
1.1

Enterprise Bank
0.5

TOTAL
287.5

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

Economic Report Second Quarter

(2010=100), showed a decline of 1.0 and 0.3 per cent,
compared with the levels in the preceding quarter of 2015
and the corresponding period of 2014, respectively. Capacity
utilization, at 59.5 per cent, fell by 1.0 percentage point below
the level in the preceding quarter. The development was
attributed to decrease in investor confidence due to the
election uncertainties and a fall in power supply during the
review period (Fig.13).
Figure 13: Manufacturing Capacity Utilization Rate

At 87.4 (2010=100), the estimated index of mining production
rose marginally by 0.1 per cent, compared to the level at the
end of the preceding quarter, but declined by 0.5 per cent
relative to the level attained at the end of the corresponding
period of 2014. The rise in mining production during the review
quarter, was accounted for by the increase in crude oil and
gas production.
At 2,800 MW/h, estimated average electricity generation fell in
the second quarter of 2015 by 6.2 per cent, compared with
the level attained in the preceding quarter. The development
was attributed to the effect of gas pipeline vandalism across
the country; a strike in the oil and gas sector, which led to
the decline in gas supply to power plants, as well as low
water levels to the hydro plants.
At 2,590 MW/h, estimated average electricity consumption

Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Percent
Actual industrial
capacity utilization
fell by 1.0
percentage point
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 Second Quarter

declined by 0.2 per cent, compared with the level attained in
the
preceding
quarter.
The
reduction
in
electricity
consumption was attributed to the fall in power supply (Fig. 14,
Table 13).
Figure 14: Index of Industrial Production (2010=100) 4

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

Manufacturing

Mining
146.25


Capacity Utilization (%)

Petroleum Sector
Nigeria’s crude oil production, including condensates
and natural gas liquids, averaged 1.91 mbd or 173.81
million barrels (mb) in the quarter under review. This
represented an increase of 0.02 mbd (1.1 per cent),
compared with 1.89 mbd (170.1 million barrels) produced
in the first quarter of 2015. Crude oil export was estimated
at 1.46 mbd or (132.86 million barrels), representing an
increase of 1.4 per cent, compared with 1.44 mbd or
129.6 mb recorded in the preceding quarter. The
development was attributed to the renewed cooperation

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

Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Index
Mining
All Sectors
Manufacturing
Average electricity
generation and
consumption fell
during the review
quarter.
Crude oil and natural
gas production rose in
the second quarter of
2015.
Crude oil
export rose in
Q2 2015.


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

Economic Report Second Quarter

among
security
agencies
and
the
adoption
of
sophisticated surveillance technologies, which helped to
minimize the incidence of sabotage and vandalism of
crude oil installations. Allocation of crude oil for
domestic consumption was 0.45 mbd or 40.95 million
barrels during the review quarter.
At an estimated average of US$62.22 per barrel, the price of
Nigeria’s reference crude, the Bonny Light (37o API), rose by
9.7 per cent, compared with the level in the preceding
quarter. The average prices of other competing crudes,
namely the U.K Brent, the Forcados and the West Texas
Intermediate also rose to US$60.90, US$62.43 and US$57.06 per
barrel, compared with US$55.58, US$57.07 and US$47.34 per
barrel, respectively, in the preceding quarter. At US$59.31 per
barrel, the average price of OPEC’s basket of eleven crude
streams rose by 17.9 per cent, compared with the average of
US$50.30/b
recorded
in
the
preceding
quarter.
The
development was due largely, to increased demand for
refined products and the US crude inventories draw-down,
which were largely responsible for the rebound in crude oil
prices (Fig. 15, Table 14).
Figure15: Trends in Crude Oil Prices

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


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Economic Report Second Quarter

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

OPEC Basket


4.5
Consumer Prices5
Available
data
showed
that
the
all-items
composite
Consumer Price Index (CPI) at the end of the second quarter
of 2015 was 173.2 (November 2009=100), representing an
increase of 2.9 and 9.2 per cent over the levels in the
preceding quarter and the corresponding quarter of 2014,
respectively. The development relative to the preceding
quarter was driven largely by increase in the indices 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 second quarter of
2015 was 172.2 (November 2009=100), indicating an increase
of 2.9 and 9.2 per cent over the levels in the preceding
quarter and the corresponding period of 2014, respectively.
Similarly, the rural all-items CPI, at 174.2 (November 2009=100),
represented an increase of 2.8 and 9.1 per cent over the
levels in the preceding quarter and the corresponding period
of 2014, respectively (Fig. 16, Table 15).

5 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 Q2 2015
on account of the
increase in the prices
of food items and
non-alcoholic
beverages.


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Economic Report Second Quarter

Figure16: Consumer Price Index

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

Urban

Rural
147.9


The inflation rate for the second quarter of 2015, on a year-onyear basis, stood at 9.2 per cent, compared with 8.5 per cent
in the preceding quarter. This indicated 0.7 percentage point
increase above the level in the preceding quarter. The
inflation rate on a twelve-month moving average basis was
8.4 per cent, compared with 8.2 per cent recorded in the
preceding quarter (Fig. 17, Table 16).

142.5

147.5

152.5

157.5

162.5

167.5

172.5

177.5

Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Index
Composite
Urban
Rural
The headline
inflation (y-oy) stood at 9.2
per cent in Q2
2015.


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Economic Report Second Quarter

Figure 17: Inflation Rate


Table 16: Headline Inflation Rate (%)
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
12-Month Moving Average

Year-on-Year


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


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5.0
External Sector Developments
Provisional data indicated that foreign exchange inflow through the
CBN in the second quarter of 2015 declined by 16.1 and 45.0 per
cent below the levels in the preceding quarter and the
corresponding quarter of 2014, respectively. Outflow through the
Bank also fell by 36.4 and 36.0 per cent below the levels in the
preceding quarter and the corresponding quarter of 2014,
respectively. Total non-oil export receipts fell by 64.9 and 75.1 per
cent below the levels in the preceding quarter and the
corresponding quarter of 2014, respectively. At the BDC segment of
the foreign exchange market, the average naira exchange rate, at
N216.41 vis-à-vis the dollar, depreciated by 2.6 per cent, relative to
the level in the preceding quarter. Similarly, at the inter-bank
segment, the average naira exchange rate, relative to the
preceding quarter, depreciated to N196.97 per dollar. The gross
external reserves fell by 3.5 per cent in the second quarter to
US$28.34 billion, below its level at the end of the preceding quarter.
5.1
Foreign Exchange Flows
Provisional data indicated that foreign exchange inflow
through the CBN in the second quarter of 2015 amounted to
US$6.97 billion, representing a decline of 16.1 and 45.0 per
cent below the levels in the preceding quarter and the
corresponding period of 2014, respectively. The development
was due to the significant fall in crude oil receipts, which more
than off set the marginal inccrease in inflow from its non-oil
component. Foreign exchange outflow through the CBN
amounted to US$8.20 billion, showing a decline of 36.4 and
36.0 per cent below the levels in the preceding quarter and
the corresponding period of 2014, respectively. The decline in
outflow, relative to the preceding quarter, was attributed,
largely, to the fall in rDAS utilization and other official
payments. The development resulted in a net outflow of
US$1.22 billion, compared with the net outflow of US$4.57
billion and US$0.13 billion recorded in the preceding quarter,
compared with $US4.57 billion and US$0.13 billion in the
preceding quarter and the corresponding period of 2014,
respectively (Fig.18, Table 17).


Foreign exchange
inflow and
outflow through
the CBN declined
by 16.1 and 36.4
per cent,
resulting in a net
outflow of
US$1.22 billion in
Q2 of 2015.


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Economic Report Second Quarter

Figure 18: Foreign Exchange Flows Through the CBN


Table 17: Foreign Exchange Flows Through the CBN (US$ million)
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Inflow
9,442.91

11,857.35

9,465.52

10,221.43

12,676.51

13,094.23

10,641.86

8,307.23

6,971.05

Outflow
12,542.53

12,667.33

10,789.61

15,695.66

12,806.25

11,804.98

14,527.35

12,875.77

8,195.09

Netflow
(3,099.62)

(809.98)

(1,324.09)

(5,474.23)

(129.74)

1,289.25

(3,885.49)

(4,568.54)

(1,224.04)


Provisonal data on aggregate foreign exchange flows
through the economy indicated that total inflow amounted to
US$23.74 billion, representing a decline of 16.5 and 39.5 per
cent below the levels in the preceding quarter and the
corresponding period of 2014, respectively. The development
was attributed, largely, to the decline in receipts from crude
oil, following the falling prices of crude oil at the international
market as well as the fall in invisible purchases. Oil sector
receipts, which accounted for 16.1 per cent of the total, stood
at US$3.83 billion, compared with US$5.59 billion and US$11.2
billion,
recorded
in
the
preceding
quarter
and
the
corresponding period of 2014, respectively.
Non-oil public sector inflow, at US$3.14 billion (13.2 per cent of
the total), rose by 15.4 and 113.6 per cent above the levels in
the preceding quarter and the corresponding period of 2014,
respectively. Autonomous inflow, which accounted for 70.9
per cent of the total, fell by 16.4 per cent, compared with the
level in the preceding quarter.
Autonomous inflow
into the economy fell
by 16.4 per cent in
Q2 2015 .
-10,000
-5,000


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


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Economic Report Second Quarter

At US$8.61billion, aggregate foreign exchange outflow from
the economy fell by 34.9 and 334.1 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, mainly, by the closure of the retail
Dutch Auction System (rDAS) segment of the foreign
exchange market. Overall, a net inflow of US$15.21 billion was
recorded in the second quarter of 2015, compared with
US$15.21billion and US$26.20 billion in the preceding quarter
and corresponding period of 2014, respectively.
5.2
Non-Oil Export Earnings by Exporters
Total non-oil export earnings by Nigerian exporters during the
second quarter of 2015 stood at US$631.54 million, indicating a
decline of 64.9 and 75.1 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, mainly, to the significant fall in receipts
from
minerals
sector
and
manufactured
products.
A
breakdown
of
the
proceeds
showed
that
minerals,
manufactured products, industrial sector, agricultural products
and food products earned US$295.1 million, US$154.7 million,
US$111.2
million,
US$46.8
million
and
US$23.7
million,
respectively.
The shares of minerals, manufactured products, industrial
sector, agricultural products and food products in non-oil
export proceeds were 46.7, 24.5, 17.6, 7.4, and 3.8 per cent,
respectively.
5.3
Sectoral Utilisation of Foreign Exchange

Available data indicated that the invisible sector accounted
for the bulk (41.2 per cent) of total foreign exchange
disbursed in the second quarter of 2015, followed by the
industrial sector (18.4 per cent). Other beneficiary sectors in a
descending order included: minerals and oil sector (17.7 per
cent), manufactured products (10.1 per cent), food products
(9.3 per cent), transport sector (2.1 per cent) and agricultural
products (1.2 per cent) (Fig.19).
.
The invisible
sector accounted
for the bulk of
the total foreign
exchange
disbursed during
Q2 2015.
Total non-oil
export earnings
by exporters fell
during the
second quarter
of 2015.


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Economic Report Second Quarter

Figure19: Sectoral Utilisation of Foreign Exchange

5.4
Foreign Exchange Market Developments6
Foreign exchange demand at the interbank market by the
authorized dealers during the review quarter stood at
US$71.22 billion, indicating an increase of 299.0 per cent
above the level in the preceding quarter of 2015. The
development,
relative
to
the
preceding
quarter
was
attributed, largely, to the closure of the rDAS window of the
market. Similarly, demand at the BDC segment stood at
US$0.97 billion, compared with US$0.86 billion and US$1.83
billion in the preceding quarter and the corresponding quarter
of 2014. The sum of US$7.35 billion was sold by the CBN during
the review quarter, indicating a decline of 32.7 and 31.8 per
cent below the levels in the preceding quarter and the
corresponding period of 2014, respectively (Fig. 20, Table 18).


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


Percent of Total
Q4-14
Q1-15
Q2-15
Demand and supply
of foreign exchange
by authorized dealers
fell during Q2 2015.


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Economic Report Second Quarter

Figure 20: Demand for and Supply of Foreign Exchange


Table 18: Demand for and Supply of Foreign Exchange (US$ billion)
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
Forex Sales at rDAS

MC
Forex Demand at rDAS

MC
Supply of Forex to BDC

Total Forex Supply(BDC and rDAS)


The average exchange rate of the naira to the US dollar at the
interbank segment in the review period was N196.97/US$,
indicating a depreciation of 3.0 and 17.6 per cent, relative to
the rates in the preceding quarter and the corresponding
quarter of 2014, respectively. At the bureau-de-change (BDC)
segment, the naira traded at an average of N216.41/US$,
indicating a depreciation of 2.6 and 22.3 per cent relative to
their respective levels in the preceding quarter and the
corresponding period of 2014, respectively (Fig. 21, Table 19).
The premium between the inter-bank and BDC rates
narrowed to 9.9 per cent from 10.3 per cent in the preceding
quarter (Fig. 22, Table 19).

Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
US$ billion
Forex Sales at rDAS
Forex Demand at rDAS
Supply of Forex to BDC
Total Forex Supply
The average naira
exchange rate visà-vis the US dollar
depreciated in all
segments of the
foreign exchange
market in Q2
2015.
The premium
between the interbank and the BDC
rates narrowed in
the review period.


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Economic Report Second Quarter

Figure 21: Average Exchange Rate Movements

Table 19: Exchange Rate Movements and Exchange Rate Premium
Average Exchange Rate (N/US$)
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
rDAS

169.68 N/A
BDC

Interbank

Premium (%)
rDAS/BDC

23.5 N/A
rDAS/Interbank

12.6 N/A
BDC/Interbank


Figure 22: Exchange Rate Premium

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

Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
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 second quarter of
2015 stood at US$28.34 billion, indicating a decline of 3.5 per
cent below the level recorded at the end of the preceding
quarter. The development was attributed, mainly, to the
dwindling oil receipts and demand pressure at the inter-bank
segment of the foreign exchange market. A breakdown of the
reserves showed that CBN reserves stood at US$23.58 billion
(83.2 per cent), Federation reserves, US$2.27 billion (8.0 per
cent) and the Federal Government reserves, US$2.48 billion
(8.8 per cent) (Fig. 23, Table 20).
Figure 23: Gross Official External Reserves


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


Table 20: Gross Official External Reserves (US$ million)
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
External Reserves
44,957.0

44,108.5

42,847.3

37,376.4

37,330.0

38,278.6

34,241.5

29,357.2

28,335.2


Gross external
reserves fell
during the
second quarter
2015.


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Economic Report Second Quarter

6.0 Global Economic Conditions
6.1 Global Output
The International Monetary Fund (IMF) World Economic
Outlook (WEO) July 2015 update projected global growth at
3.3 per cent in 2015. This represented a downward revision of
0.2 per cent from the projected level in April 2015, reflecting a
reassessment of prospects in North America, China, and the
emerging market economies.
Global growth momentum has been moderated as the world
economy continued to expand along an uneven recovery
path. Growth has been weighed down by contraction in the
United States, slow growth in the United Kingdom, weakening
investment in China and decelerated activities in emerging
markets. High levels of uncertainty, declining confidence and
high inflation have also dampened activities in Brazil and
Russia.
In the emerging market and developing economies, growth
was projected to remain broadly stable at 4.2 per cent in 2015
and would gradually increase to 4.7 per cent in 2016. The
development was attributed to the dampening impact of
commodity prices, rebalancing in China and its implications
for emerging Asia, a much weaker outlook in Russia and
downward revisions to potential growth in commodity
exporters.
6.2 Global Inflation
Global inflation remained low, reflecting the decline in energy
prices. Inflation among major advanced economies, the US
and Europe experienced significantly low rate and in some
cases deflation during the first half of 2015. Inflation rate rose
from -0.2 per cent in April 2015 to 0.0 per cent in May 2015 in
the United States. Euro area inflation rate was in negative
territory in the first quarter of 2015 before rising to 0.3 per cent
in April before and moderated to 0.2 per cent in May 2015.
The rise in inflation in the second quarter of 2015 could be
attributed to the massive quantitative easing embarked upon
by the European Central Bank (ECB) in March 2015. However,
inflation in the Eurozone was still below the ECB target range
of close to 2.0 per cent. Overall, inflation in the advanced


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Economic Report Second Quarter

economies was projected at 0.4 per cent in 2015. Inflation in
the US, euro area and the United Kingdom were projected at
0.1 per cent apiece, while Japan was projected at 1.0 per
cent.
Inflation in China and India remained subdued. However, in
Brazil and Russia, inflation remained elevated as currency
depreciation led to higher import prices.
6.3 Global Commodity Demand and Prices
World crude oil demand was estimated at 91.55 mbd in the
second quarter of 2015, representing a decline of 0.23 per
cent below the 91.76 mbd recorded in the first quarter of 2015.
World crude oil supply was estimated at 94.4 mbd in the
second quarter, representing a marginal increase of 0.1 per
cent from the 94.3 mbd recorded in the first quarter of 2015.
The development was attributed to the increased demand for
transportation fuels for summer driving season.
The price of OPEC Reference Basket (ORB) averaged US$59.89
per barrel in the second quarter of 2015, representing an
increase of 19.07 per cent above the level in the first quarter
of 2015. The development was attributed to consecutive
weeks of crude oil inventory draw-down in the US as refineries
were running at above 90 per cent capacity since early April.
The prices of Inter-Continental Exchange (ICE) Brent declined
to close at US$63.75 per barrel, while Nymex WTI rose to close
at US$59.83 per barrel. The price of ICE Brent, since the
beginning of the second quarter, hovered around $60–85/ per
barel arising from competing concerns associated with lower
prices which supported demand growth, but affected the US
supply growth.
6.4
International Financial Markets
During the second quarter of 2015, most of the currencies of
Asia,
Europe,
South
and
North
America
and
Africa
depreciated against the U.S. dollar, apparently due to sluggish
recovery of global output. Despite expansionary measures by
the European Central Bank (ECB), Bank of England (BoE), and
Bank of Japan (BoJ) capital reversal remained a major threat
posed by the normalization of the US monetary policy. The
emerging economies were affected largely by their weak
demand, lower commodity prices and tight liquidity condition.


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Economic Report Second Quarter

In Asia, the divergence between the monetary policy stance
in China and Japan worsened the fragility of financial markets
and currency risks.
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 Spring Meetings of the Board
of Governors of the World Bank Group (WBG) and the
International Monetary Fund (IMF) held in Washington D.C.,
USA from April 13 – 19, 2015. The meeting noted the following:

that
global
recovery
remained
uneven,
with
divergences across countries and regions;

emerging markets and developing countries (EMDCs)
continued to be the major drivers of global growth;

Weakness in the euro area and Japan continued, while
growth in the U.S. showed some improvement; and

that domestic policy effort to improve resilience to
external shocks remained critical and must be
complemented by adequate financial backstops,
particularly from the IMF and other international
financial institutions (IFIs).
Also, the Association of African Central Banks (AACB) 2015
Continental Seminar was held in Nairobi, Kenya from May 13 –
15, 2015. The theme of the Seminar was “Monetary Policy
Frameworks in Africa in a Changing Financial Landscape”.
During the meeting, members:

agreed that monetary policy was a dynamic process and
countries were advised to consider moving towards
forward-looking monetary policy framework, such as
inflation targeting and hybrid frameworks;

observed the need for a convergence in the monetary
policy frameworks of AACB countries in line with the ongoing regional integration initiatives, but also accounting
for country differences by allowing some structural
reforms, which might take 3 to 10 years,

Noted the developments in African financial landscape
and listed the key contributors to the trend to include:
financial innovations such as the development of robust


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Economic Report Second Quarter

payments system, growth in micro-financing, increase in
shadow banking and non-bank financial institutions;
liberalization of capital accounts; and the adoption of
Islamic finance.
Finally, the 2015 Annual Meetings of the African Development
Bank (AfDB) was held in Abidjan, Cote d’Ivoire from May 25 –
29, 2015. The meeting identified options for Africa’s economic
transformation as emphasized in its 2013 – 2022 10-year
Strategy to include: investment in infrastructure, regional
economic
integration;
private
sector
development;
governance;
accountability;
enhanced
skills/technology;
greater trade facilitation; and diaspora remittances - which
could serve as important sources of investment finance for
Africa.


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APPENDIX TABLES


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

Economic Report Second Quarter

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

Economic Report Second Quarter

Table A1: Money and Credit Aggregates


1/ Quasi money consist of Time, Savings and Foreign Currency Deposit at Deposit Money Banks excluding Taking from Discount
Houses.

2/ Demand Deposit consist of State, Local and Parastatals Deposits at CBN, State, Local Government and Private Sector Deposits as well
as Demand Deposits of non-financial Public Enterprises at Deposit Money Banks.


Mar-14
Jun-14
Sep-14
Dec-14
Mar-15
Jun-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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Table A2: Money and Credit Aggregates (Growth Rates)
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Q2-15
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
1.89
3.18
10.02

2.6
4.6
Claims on State and Local Governments

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

Other Asset (Net)
-7.89


Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Percentage Change Over Preceding Quarter
Percentage Change Over Preceding December

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


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