Classified as

Half Year
Economic Report

CENTRAL BANK OF NIGERIA
Ha lf Year Economic Report, 2023


Classified as


CENTRAL BANK OF NIGERIA
Ha lf Year Economic Report, 2023


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023
i

Central Bank of Nigeria Corporate Head Office
Plot 33, Abubakar Tafawa Balewa Way Central
Business
District, Cadastral Zone
P.M.B. 0187
Garki, Abuja
Website: www.cbn.gov.ng

Contact Centre
Tel: +234 (0) 700 225 5226


©2023 Central Bank of Nigeria

ISSN 1597 - 2976


Classified as


ABOUT THE REPORT


The Central Bank of Nigeria (CBN) Economic Report presents economic
developments in Nigeria, intended for dissemination to the public. The
Report provides insights on current developments in the real, fiscal,
financial, and external sectors of the Nigerian economy, as well as on
global issues of interest. It also reflects the policy initiatives of the CBN
in pursuit of its mandate. The Report is targeted at a wide range of
readers, including economists, policymakers, financial analysts in the
government and private sectors, and the public. Free copies of the
Report, both current and past issues, can be obtained from the CBN
website: www.cbn.gov.ng. All inquiries concerning the report should be
directed to the Director, Research Department, Central Bank of Nigeria,
P.M.B. 187, Garki, Abuja, Nigeria.


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023
iii

GOVERNANCE FRAMEWORK

Members of the Committee of Governors

Godwin I. Emefiele, CON
-
Governor (Chairman)

Aishah N. Ahmad
-
Deputy Governor (Financial System Stability)

Edward L. Adamu
-
Deputy Governor (Corporate Services)

Folashodun A. Shonubi
-
Deputy Governor (Operations)

Kingsley I. Obiora
-
Deputy Governor (Economic Policy)

Alice Karau
-
Secretary to the Board


Members of the Monetary Policy Committee (MPC) as of 30 June 2023
1 Godwin I. Emefiele, CON
-
Governor (Chairman)
2 Aishah N. Ahmad
-
Deputy Governor (Financial System Stability)
3 Edward L. Adamu
-
Deputy Governor (Corporate Services)
4 Folashodun A. Shonubi
-
Deputy Governor (Operations)
5 Kingsley I. Obiora
-
Deputy Governor (Economic Policy)
6 Mike I. Obadan
-
Member
7 Adeola F. Adenikinju
-
Member
8 Robert C. Asogwa
-
Member
9 Aliyu R. Sanusi -
Member
10 Ahmed Aliyu -
Member
11 Momodu Omamegbe -
Member
12 Mohammed A. Salisu
-
Member
13 Hassan Mahmud
-
Secretary


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023
Classified as


List of Departmental Directors as of 30 June 2023
1 Samuel C. Okojere
-
Banking Services
2 Haruna B. Mustafa
-
Banking Supervision
3 Elizabeth O. Fasoranti
-
Branch Operations
4 Muhammad A. Abba
-
Capacity Development
5 Rashida J. Monguno
-
Consumer Protection
6 Osita C. Nwanisobi
-
Corporate Communication
7 Alice Karau
-
Corporate Secretariat
8 Ahmed B. Umar
-
Currency Operations
9 Philip Y. Yusuf
-
Development Finance
10 Benjamin A. Fakunle
-
Finance
11 Angela A. Sere-Ejembi
-
Financial Markets
12 Chibuzo A. Efobi
-
Financial Policy and Regulation
13 Joseph G. Omayuku
-
Governors
14 Amina A. Habib
-
Human Resources
15 Rakiya S. Mohammed
-
Information Technology
16 Lydia I. Alfa
-
Internal Audit
17 Sirajuddin K. Salam-Alada
-
Legal Services
18 Abdulkadir A. Jibril
-
Medical Services
19 Hassan Mahmud
-
Monetary Policy
20 Nkiru E. Asiegbu
-
Other Financial Institutions Supervision
21 Musa I. Jimoh
-
Payments System Management
22 Arinze A. Stanley
-
Procurement and Support Services
23 Michael A. Adebiyi
-
Research
24 Benjamin C. Nnadi
-
Reserve Management
25 Blaise Ijebor
-
Risk Management
26 Oluwakemi O. Osa-Odigie
-
Security Services
27 Mohammed M. Tumala
-
Statistics
28 Clement O. Buari
-
Strategy Management
29 Ozoemena S. Nnaji
-
Trade and Exchange
30 Olorunsola E. Olowofeso
-
West African Monetary Institute
31 Abubakar A. Kure
-
NIRSAL Microfinance Bank


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023
v


List of Branch Controllers/Currency Officers as at 30 June 2023
1 Ogbogu D. Amaechi
-
Abakaliki
2 Wahab Oseni
-
Abeokuta
3 Ogbu, O. Michael
-
Abuja
4 Wasiu A. Omotoso
-
Ado-Ekiti
5 Fatai A. Yusuf
-
Akure
6 Okafor G. Ikechukwu
-
Asaba
7 Benedicth I.C. Maduagwu.
-
Awka
8 Haladu A. Idris
-
Bauchi
9 Renner D. Jumbo
-
Benin
10 Mannir D. Abdullahi
-
Birnin-Kebbi
11 Glory U. Iniunam
-
Calabar
12 Gana A. Abdulkadir
-
Damaturu
13 Sa'adatu A. Ibrahim
-
Dutse
14 Chidozie E. Okonjo
-
Enugu
15 Shehu A. Goringo
-
Gombe
16 Umar B. Ibrahim
-
Gusau
17 Olufolake M. Ogundero
-
Ibadan
18 Najimu L. Oluwale
-
Ilorin
19 Idirisa D. Maina
-
Jalingo
20 Esther T. Catherine
-
Jos
21 Yusuf W. Baba
-
Kaduna
22 Babangida, Jino
-
Kano
23 Musa Ahmed. Ladan
-
Katsina
24 Samson Isuwa
-
Lafia
25 Bariboloka K. Godfrey
-
Lagos
26 Ahmed I. Sule
-
Lokoja
27 Tijani K. Lawan
-
Maiduguri
28 John O. Itaha
-
Makurdi
29 Saheed M. Ademola
-
Minna
30 Ajuma D. Madojemu
-
Osogbo
31 Oruwari Oyoburuoma
-
Owerri
32 Okeke Chuks
-
Port Harcourt
33 Dahiru U. Nakazalle
-
Sokoto
34 Ayotunde O. Oladimeji
-
Umuahia
35 Itohan M. Ogbomon-Paul
-
Uyo
36 Francis E. Asuquo
-
Yenagoa
37 Sanusi S. Nyashi
-
Yola


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023
Classified as
iii

iii

iii
iv
v


ABOUT THE REPORT
GOVERNANCE FRAMEWORK
Members of the Committee of Governors
Members of the MPC
Departmental Directors
Branch Controllers/Currency Officers


SERVING THE NIGERIAN PEOPLE


DELIVERING ON
THE CBN’s
MANDATE

THE GLOBAL
ECONOMY


•
The CBN’s Mandate

•
CBN
Strategic
Priorities

•
Output Growth

•
Inflation

•
Financial
Markets

•
Commodity
Prices

•
Central Banks’
Response

•
Fiscal Measures

CONTENTS


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023
vi


MACRROECONOMIC PERFORMANCE

OUTLOOK

ADDITIONAL
INFORMATION


•
Monetary Policy

•
Global
outlook

•
Regional
Meetings
•
NonRegional
Meetings

•
The Real Economy

•
Domestic
outlook

•
Fiscal Developments

•
Financial Developments

•
Payments System
Management

•
External Sector
Development

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

EXECUTIVE SUMMARY
The Global Economy: Global economic output
expanded in the first half of 2023 on account of
improvement in supply chain, moderating
inflationary pressures, improved business and
consumer sentiments, as well as eased household
budget constraints. This was reflected in the
average
J.P.
Morgan
Global
Composite
Purchasing Manager’s Index (PMI), which rose to
52.75 points in the first half of 2023, from 48.85
points and 52.00 points in the preceding and
corresponding periods of 2022, respectively. The
expansion was driven, primarily, by the services
sub-sector, which rose to 53.65 points, compared
with 49.30 points in the preceding period.
The Real Economy: The domestic economy
maintained a modest growth trajectory in the first
half of the year, despite significant headwinds.
Real Gross Domestic Product (GDP) grew by 2.41
per cent, compared with 2.91 per cent and 3.32
per cent in the preceding and the first halves of
2022, respectively. The growth was on account of
sustained improvement in the performance of the
non-oil sector, driven by increased investments in
the sector and sustained fiscal and monetary
stimuli to critical sectors of the economy.
Despite the subsisting monetary policy tightening,
headline inflation, in the first half of 2023, rose to
22.79 per cent from 21.34 per cent and 18.60 per
cent at the preceding and corresponding halves of
2022. The heightened price pressures were
occasioned by higher energy and food prices that
accompanied the Russia-Ukraine war and
exchange rate pass-through. From the domestic
front, cost-push factors such as the removal of
PMS subsidy and the reforms in the foreign
exchange market, among other legacy structural
challenges, contributed to the continued surge in
aggregate prices.
Domestic crude oil production in the first half of
2023 improved due to enhanced security of crude
oil production and distribution infrastructure and
sustained investment in exploration activities by
the NNPC Limited. At an average daily production
of 1.21 million barrels per day (mbpd), Nigeria’s
crude oil output in the first half of 2023, increased
by 2.54 per cent, from 1.18 mbpd in the second
half of 2022. However, it fell slightly by 0.82 per
cent, relative to the level in the corresponding half
of 2022. Crude oil prices declined in the first half
of 2023, due, mainly to higher global supply,
particularly
from
the
US
and
Mexico.
Consequently, the average spot price of Nigeria’s
reference crude, the Bonny Light, fell by 17.22 per
cent in the first half of 2023 to US$81.87 per
barrel (pb) from US$98.90 pb in the second half of
2022. The Bank reduced the pace of its
intervention in the critical segments of the
economy, while loan repayment increased in the
same period. The increase in recovery reflected
increased drive for loan-recovery and positive
returns from the programmes.
Fiscal Developments: Fiscal policy in the first half
of 2023 towed the path of fiscal consolidation
with the implementation of broad reforms to
widen the fiscal space and ensure fiscal viability.
In addition, expenditure and public debt policies
were implemented to reflect efforts at softening
the impact of external and domestic headwinds.
Revenue performance was influenced by broad
reforms in the mineral and non-oil sectors. The
Finance Act 2023 helped broaden the tax base to
include digital assets for capital gains. However,
the continued crude oil theft, and subsisting tax
expenditures lowered accretion to the Federation
Account. Federation revenue waned due to
subsidy payments for premium motor spirit (PMS)
and
low
domestic
crude
oil
production.
Accordingly, at N6,903.32 billion or 5.4 per cent
of GDP, provisional gross federally collected


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023
Classified as
revenue declined by 5.5 per cent, relative to the
level in the second half of 2022, and fell short of
the proportionate budget by 34.8 per cent.
Retained revenue of the FGN rose significantly,
relative to the corresponding period of 2022.
Provisional FGN retained revenue, at N3,128.31
billion (2.6 per cent of the GDP), outpaced
performance in the first half of 2022 by 34.9 per
cent, reflecting higher independent FGN receipts.
Provisional aggregate expenditure of the FGN
declined, relative to the first half of 2022. At
N6,998.76 billion (8.9 per cent of the GDP),
provisional aggregate expenditure of the FGN
was below the level in the first half of 2022 and
the benchmark by 13.0 per cent and 35.9 per cent,
respectively. The lower expenditure was driven by
reduced interest obligations, arising from the
redemption of N703.77 billion out of the total
debt stock of the FGN in 2022. Consequently, the
fiscal operations of the Federal Government
(FGN) resulted in an overall deficit of 3.1 per cent
of GDP, while consolidated public debt levels
exceeded the 40.0 per cent debt-to-GDP national
threshold, but remained well within the 70.0 per
cent benchmark for Market Access Countries
(MAC).
Financial Developments: The Bank sustained its
hawkish policy stance in a bid to tame
inflationary pressure in the first half of 2023.
Despite
the
subsisting
monetary
policy
tightening, liquidity in the banking system was
higher-than-expected on the back of the
combined effect of currency recirculation,
exchange rate reforms, improved FAAC payments
and
maturities
of
government
securities.
Consequently, broad money supply (M3) grew
significantly by 24.4 per cent annualised to 48.8
per cent exceeding its provisional benchmark of
28.21 per cent. The financial sector remained
resilient in the first half of 2023, as key financial
soundness indicators were within regulatory
benchmarks. The Bank’s payments system
architecture remained robust driving digital
financial inclusion through the introduction of
innovative measures aimed at fostering a more
profound evolution of the payments system
landscape during the period.
Activities at the Nigerian equities market were
bullish, as the All-Share Index (ASI) and aggregate
market capitalisation appreciated, relative to
their levels at end-December 2022 and end-June
2022. The performance was on account of betterthan-expected
2023Q1,
corporate
earnings
declaration, dividend reinvestments, and the
anticipation of favourable 2023H1 corporate
earnings following the reforms in the energy
sector and the foreign exchange market.
External Sector Developments: The external
account in the first half of 2023 deteriorated due
largely to global financial tightening to rein in
inflation, and a lull in economic activities,
attributed to the uncertainties surrounding the
general elections. The development resulted in an
overall balance of payments deficit of 1.4 per cent
of GDP, relative to 1.0 per cent of GDP in the
second half of 2022 and 0.4 per cent of GDP in
the first half of 2022.
Sustained inflow of remittances and lower
payments for the import of goods and services,
resulted in an improved current account surplus
of 1.1 per cent of GDP. The financial account
maintained a net borrowing position with a net
incurrence of financial liabilities of 0.7 per cent of
the GDP, compared with 1.4 per cent in the
preceding period. The international investment
position (IIP) posted a lower net liability of
US$53.13 billion. The external reserves position at
end-June 2023 was US$33.71 billion and could
finance 7.9 months of import (goods only) or 5.9
months of import (goods and services), which was
above the international benchmark of 3.0
months. The adoption of a market determined


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

exchange rate in June 2023 led to the
depreciation of the naira by 10.3 per cent. The
stock of external debt increased to US$43.16
billion at end-June 2023, from US$40.06 billion at
end-June 2022.
Outlook: Looking ahead, the global economic
outlook for the rest of 2023 remains positive,
owing to easing supply chain pressure, as shocks
from the COVID-19 pandemic and Russia-Ukraine
war taper. On the domestic front growth is
expected to maintain a positive trajectory for the
rest of the year. Tailwinds to the outlook are
predicated on a sustained rally in crude oil prices,
improvement in domestic crude oil production,
gains of fiscal consolidation and other reforms
under the Finance Act 2023. Headwinds to the
domestic outlook remain rising energy prices,
external debt service obligations, subsisting
security challenges, legacy infrastructural deficit,
and tightening global financial conditions.


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

Section One


CBN Strategic Priorities (2019 – 2024): 5-Point Agenda


CBN MANDATE
&
STRATEGY
* Ensure monetary and price stability
* Issue legal tender currency in Nigeria
* Maintain external reserves to safeguard the international
value of the legal tender currency
* Promote a sound financial system in Nigeria
* Act as Banker and provide economic and financial advice to the
Federal government
Foster the Development of a Robust
Payments System
Conserve the utilization of reserves
for critical raw materials and imports
that are not produced locally
Improve consumer
spending and
investment by MSMEs through
affordable and adequate credit
Grow our External Reserves
Improve Access to Credit
Promote inclusive growth and
private sector investment by
leveraging on monetary tools to
maintain a low inflation
environment , while trying to seek
exchange rate stability
Preserving macroeconomic and
financial stability
Drive the cashless initiative across
the country to enhance efficiency
and propel the financial inclusion
drive
Diversify the Economy through
i ntervention programmes
Boost productivity growth in both
the agricultural and manufacturing
sectors through end
- to - end value
chain credit intervention
programmes


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

Strategic
Themes
Price stability
Integrity and
soundness
Future-forward
& inclusive
Catalyst for
productivity
Resilience
against shocks
Operational
excellence
Empowered
for impact
Integrity
Partnership
Accountability
Courage
Tenacity
Mission
“To ENSURE monetary, price, and
financial system stability as a
catalyst for inclusive growth and
sustainable economic
development”
CBN: 2021-2024
CBN Strategy
Core Values
Vision
“To be a people-focused Central
Bank promoting confidence in the
economy and enabling an
improved standard of living”


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

Section Two
THE GLOBAL ECONOMY


THE GLOBAL ECONOMY
•Global Output
•Global Inflation
•Glonal Financial Markets
•Central Banks' Responses
•Fiscal Measures


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

2.1
GLOBAL OUTPUT GROWTH
Global economic output expanded in the first half
of 2023 due to diminishing supply chain pressures
and moderating inflationary pressures. Economic
activities expanded on eased household budget
constraints and improved business & consumer
sentiments as a result of tailwinds from
moderating inflationary pressures, and waning
supply chain disruptions due to the reopening of
China’s economy.
The average J.P. Morgan Global Composite
Purchasing Manager’s Index (PMI), rose to 52.75
points in the first half of 2023 above 48.85 points
and 52.00 points in the preceding and
corresponding
periods,
respectively.
The
expansion was driven primarily by the services
sub-sector, which rose to 53.65 points, compared
with 49.30 points in the preceding period, as
business optimism strengthened, and cost
pressures peaked. It was, however, dampened by
a contraction in manufacturing output as new
orders declined. The manufacturing sub-index
remained in contractionary territory at 49.53
points in the first half of 2023.

Table 2.1: Global Purchasing Managers’ Index (PMI)

2022H1
2022H2
2023H1
Composite
52.0
48.85
52.75
Manufacturing
51.87
49.83
49.53
Services
(Business Activity)
52.67
49.30
53.65
Source: JP Morgan.
2.1.1. Advanced Economies (AEs)
Economic activities in major Advanced Economies
improved as supply chains normalised and price
pressures moderated. The average JP Morgan
composite Global Purchasing Managers’ Index
(PMI) in most of the countries in the region
improved in the first half of 2023. In the United
States and the United Kingdom, a solid upturn in
private sector business activity, attributed to
improved supply chains, broad decline in food
and energy prices, and stronger demand,
stimulated the pace of economic activity. The
expansion was reflected by the rise in PMI to
51.68 and 52.59 points, compared with 46.90 and
49.40 points, respectively, in the second half of
2022.
Similarly, economic activity expanded in Germany
as PMI rose to 51.99 points, over the level in the
preceding half of 2022. The expansion was
underpinned by an uptick in the services sector
on the back of reduced inflationary pressures and
the acceleration of new businesses and job
creation. Also, business activities in Japan further
expanded, as reflected by the rise in PMI to 52.00
points, compared with 50.33 points in the
corresponding period of 2022. The expansion was
buoyed
by
increased
demand
and
accommodative policies such as the travel
subsidy programme.

Table 2.2: Selected Countries' PMIs

2022H1
2022H2
2023H1
United States
54.43
46.90
51.68
United Kingdom
56.67
49.40
52.59
China
46.47
49.95
54.32
India
54.48
56.90
59.59
Germany
54.23
46.85
51.99
Italy
52.18
48.20
53.07
Japan
50.33
50.15
52.00
South Africa
49.47
50.65
49.18
Source: IHS Markit.


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
2.1.2 Emerging Markets and Developing
Economies
Growth in the Emerging Markets and Developing
Economies (EMDEs) remained impressive, due to
rising demand and the re-opening of China’s
economy. The PMI figures indicated expansion for
most EMDEs. Specifically, China’s PMI index, at
54.32 points, rose above the benchmark relative
to 49.95 points in the preceding period. This was
driven primarily by improved domestic sales and
operating conditions in China's manufacturing
sector and an overall uptick in economic
activities. India’s PMI index rose to 59.59 points
above 56.90 points and 54.48 in the preceding
and corresponding half of 2022, respectively. The
increase was attributed to surging demand and
increased export orders, with improvements in
operating conditions.
In South Africa, the PMI index dropped to 49.18
from 50.65 points in the second half of 2022,
owing primarily to disruptions in electricity supply
and elevated prices, resulting in weak economic
performance.

2.2
GLOBAL INFLATION
Inflationary pressures moderated in the first half
of 2023 following monetary policy tightening by
most
central
banks
and
supply
chain
improvement. In the Advanced Economies (AEs),
inflation generally declined due to lower
commodity prices, reduced energy costs, and
sustained interest rate hikes. In the United States,
inflation eased to 3.0 per cent, compared with 6.5
per cent at end-December 2022 and 9.1 per cent
at end-June 2022. In the United Kingdom,
inflation decreased to 7.9 per cent, compared
with 10.5 per cent and 9.4 per cent at endDecember 2022 and end-June 2022, respectively.
In Japan, inflation fell to 3.3 per cent, from 4.0 per
cent at end-December 2022, but was higher than
2.4 per cent at end-June 2022. Inflation in
Germany and Italy fell to 6.4 per cent and 6.7 per
cent, from 8.1 per cent, and 12.3 per cent at endDecember 2022, respectively, and 6.7 per cent
and 8.5 per cent at end-June 2022.
In the EMDEs, inflation generally declined in most
economies, compared with the level in the
second half of 2022, due to decreased food and
energy prices and the normalisation of the supply
chains in many sectors. Specifically, inflation in
China flattened to 0.0 per cent, from 1.8 per cent
at end-December 2022 and 2.5 per cent at endJune 2022. Inflation in Russia and India declined
to 3.2 per cent and 4.8 per cent at end-June 2023,
from 11.9 per cent and 5.7 per cent in the
preceding half, and 15.9 per cent and 7.0 per cent
in the corresponding half of 2022, respectively.


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Source: Refinitiv Eikon (Thomson Reuters).


Source: Refinitiv Eikon (Thomson Reuters).


Country
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
United States

United Kingdom

Japan

Germany

Italy

China

Russia

India

Brazil

South Africa


United
States
United
Kingdom
Japan
Germany
Italy
China
Russia
India
South
Africa
Brazil
Jun-22
Dec-22
Jun-23
Table 2.3: Inflation in Selected Countries
Figure 2.1: Inflation in Selected Countries (per cent)


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Similarly, inflation in Brazil and South Africa fell,
compared with the level in the second half of
2022, driven majorly, by declining energy costs. In
Brazil, inflation fell to 3.2 per cent, from 5.8 per
cent at end-December 2022 and 11.9 per cent at
end-June 2022. Inflation in South Africa
decelerated to 5.4 per cent, from 7.2 2 per cent
at end-December 2022 and 7.4 per cent at endJune 2022.

2.3
GLOBAL FINANCIAL MARKETS
2.3.1 Global Financial Conditions
Tight global financial conditions amid waning
inflationary pressures influenced the performance
of financial markets in the first half of 2023.
Global stock markets were bullish in the review
period, led by the AEs, despite the policy rate
hikes. The equity indices of the AEs weathered
the banking sector crisis to post gains, fueled by
the surge in artificial intelligence (AI) inspired
tech stock and the deceleration in inflation.
Specifically, the S&P 500 grew by 15.91 per cent,
compared with 1.43 per cent in the second half of
2022 and a contraction of 20.58 per cent in the
first half of 2022.
Similarly, the performance of the Nasdaq 100,
CAC 40, DAX, EURO STOXX 50, NIKKIE 225, TOPIX,
FTMIB, and IBEX 35 surpassed the gains in the
previous and corresponding periods of 2022.
Notably, the EMDEs stocks were confronted by
capital outflows triggered by concerns about
rising interest rates and inflation amid broadbased weaknesses in commodity prices and
concerns over the outlook for the Chinese
economy. Specifically, the Brazilian BVSP, Indian
BSESN, Egyptian EGX30, and South African JALSH,
underperformed in the review period, compared
with the levels in the first and second halves of
2022. Uncertainties surrounding the Turkish
election constrained the growth of the XU100 to
4.54 per cent, from 129.04 per cent in the second
half of 2022 and 29.48 per cent in the first half of
2022.
Figure 2.2: Key Global Stock Indices

Source: Reuters and Bloomberg.

Figure 2.3: 10-year Government Bond Yields for Selected
Countries
Source: Bloomberg.

In response to elevated inflation, government
bonds surged on the back of the hawkish

US-S&P 500
US-Dow Jones
US-Nasdaq 100
UK-FTSE 100
France-CAC 40
Germany-DAX
Euro Area-EURO STOXX 50
Canada-SPTSE
Japan-Nikkei 225
Japan-TOPIX
Italy-FTMIB
Spain-IBEX 35
Mexico-MXX
Turkey-XU100
Russia-IMOEX
Brazil-BVSP
India-BSESN
Hong Kong-HSI
China-SZSE
China-SZSC
Indonesia-JKSE
Kenya-NSE20
Egypt-EGX30
South Africa-JALSH
Advanced Economies
Emerging Markets and Developing Economies
Jun-23
Dec-22
Jun-22

United States
Euro Area
United Kingdom
Japan
Canada
Italy
Spain
Mexico
India
Indonesia
Turkey
South Africa
Ghana
Kenya
Russia
Advanced Economies
Emerging Markets and Developing Economies
Jun-23
Dec-22
Jun-22


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monetary policy stance. Bond yields in the US
rallied by 1.5 percentage points, compared with
the second half of 2022, reflecting concerns over
inflation and expectations of tighter monetary
policies by the US Federal Reserve. Similarly, the
bond yields of the United Kingdom (2.83 per
cent), Japan (0.30 per cent), and Canada (2.88 per
cent) rose higher than in the preceding period.
Yields of emerging market bonds also rallied in
the review period, except Turkey, reflecting the
rate-cutting stance of the Turkish Central Bank at
the beginning of the year. Policy rate hikes fueled
the surge in yields of Mexico, India, Indonesia,
South Africa, and Kenya, while the increase in the
Russian bond yield was largely due to the
government's dependence on bonds to finance
its budget deficit.

2.4
GLOBAL COMMODITY PRICES
2.4.1 Agricultural Commodity Prices
Global agricultural commodity prices generally
declined in the first half of 2023. The extension of
the Black Sea Grain Initiative between Russia and
Ukraine played a pivotal role in sustaining grain
exports to global markets. In addition, favourable
weather conditions in key grain-producing
regions, which benefitted harvest, coupled with
a
decrease
in
energy
costs
moderated
agricultural commodity prices.
Consequently, the all-commodities index stood at
124.5 index points (2010=100), showing a 0.9 per
cent decline, compared with the level in the
preceding half, but was 19.1 per cent higher than
the corresponding period in 2022. Significant
price decreases were observed for rubber, palm
oil, soybeans, wheat, and cotton, which saw
declines of 0.6 per cent, 2.5 per cent, 5.8 per
cent, 8.0 per cent, and 14.7 per cent,
respectively.
Conversely, price increases of 7.4 per cent, 10.9
per cent, and 20.9 per cent were recorded for
groundnut, coffee, and cocoa, respectively, in the
first half of 2023. The surge in price of cocoa was
driven by lower production in West Africa, a
consequence of the prevalence of black pod
disease, which significantly affected cocoa
supply.

Table 2.4: Indices of Average World Prices of Nigeria's
Major Agricultural Export Commodities (2010 = 100)
(Dollar Based)

2022H1
2022H2
2023H1
% ∆

-1
-2
-3

All Commodities

Cocoa

Cotton

Coffee

Wheat

Rubber

Groundnut

Palm Oil

Soya Beans

Source: Staff Computation based on data from Index Mundi.

2.4.2 Crude Oil Prices
Crude oil prices declined in the first half of 2023,
due, mainly to higher global supply, particularly
from the US and Mexico. Consequently, the
average spot price of Nigeria’s reference crude,
the Bonny Light, fell by 17.2 per cent to US$81.87
per barrel (pb) from US$98.90 pb in the second
half of 2022, and by 26.2 per cent from
US$110.96 pb in the corresponding half of 2022.


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Figure 2.5: Bonny Light Average Prices, 2018H1-
2023H1(US$ per barrel)

Source: Refinitiv Eikon (Thomson Reuters).

Similarly, prices of the Brent, Forcados, West
Texas Intermediate (WTI) and OPEC Reference
Basket fell by 18.0 per cent, 17.5 per cent, 15.1
per cent and 16.3 per cent to US$80.37 pb,
US$82.26 pb, US$75.93 pb and US$79.35 pb,
respectively, relative to the level in the second
half of 2022. Furthermore, the prices of all the
crude streams declined, compared with the levels
in the corresponding half of 2022.

Figure 2.6: Average Monthly Crude Oil Prices, 2022-2023
(US$ per barrel)

Source: Refinitiv Eikon (Thomson Reuters).
2.4.3 Global Crude Oil Supply and Demand
Global crude oil supply increased on account of
higher supplies from some non-OPEC countries.
World crude oil supply averaged 101.20 million
barrels per day (mbpd) in the first half of 2023, a
2.4 per cent and 2.30 per cent increase above the
levels in the preceding and corresponding halves
of 2022, respectively. The rise was attributed,
mainly to higher supplies of crude oil from Mexico
and the US. Specifically, increased private sector
investment in Mexico’s oil and gas sector
contributed to the increase in crude oil supply. In
the US, the crude oil supply increase was
supported by higher demand for oil in Asia, as
countries in the region sought alternative sources
of crude following production cuts by OPEC+.
Following the announcement by OPEC+ in April
2023 to cut production by 1.16 mbpd from May
until the end of the year, OPEC crude oil supply
fell by 2.1 per cent, to 33.76 mbpd in the first half
of 2023, from 34.57 mbpd in the preceding half
of 2022. Specifically, the OPEC crude portion fell
by 2.2 per cent to 28.43 mbpd, while the
Liquefied Natural Gas (LNG) and condensates
portion fell by 1.6 per cent to 5.41 mpbd,
compared with the levels in the second half of
2022. However, it rose by 0.24 per cent
compared with 33.76 mbpd in the first half of
2022.
World crude oil demand rose to 100.40 mbpd in
the first half of 2023, compared with 100.06
mbpd and 98.56 mbpd in the preceding and
corresponding halves of 2022, respectively. The
Organisation for Economic Co-operation and
Development (OECD) countries' demand was
45.0 per cent (45.53 mbpd) of the total world
demand, while non-OECD countries, led by China,
accounted for the balance, at 54.87 mbpd.

US$ PER BARREL

Bonny Light
Brent
Forcados
WTI
OPEC Basket


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The improved economic growth in China
following the reopening of its economy and
higher crude oil import quotas to refiners,
supported the increase in demand. In addition,
the importation of large volumes of discounted
Russian crude feedstock by Chinese refiners,
further supported the increase in crude oil
demand.

2.5
CENTRAL BANKS’ RESPONSE
Most central banks tightened their monetary
policy stance to tame the persistent inflationary
pressures. The pace of policy hikes slowed in the
first half of the year, signaling an end to the
aggressive
tightening
cycle
in
2022,
as
inflationary pressures began to ease. Specifically,
the Federal Reserve raised the monetary policy
rate by a cumulative 75 basis points (bps) to 5.25
per cent within the period. The European Central
Bank and Bank of England raised their policy rates
by 150 bps each, to 4.0 per cent and 5.0 per cent,
respectively. Also, the Bank of Canada raised its
benchmark rate by 50 bps to 4.75 per cent.
However, the Bank of Japan maintained its ultralow policy rate at -0.10 per cent to support
economic recovery.
Monetary authorities in the EMDEs also
maintained a hawkish stance, tightening rates
further to curtail the elevated inflation and
safeguard their domestic currencies. The Bank of
Mexico raised its repo rate to 11.25 per cent from
10.50 per cent. Central Bank of Turkey also hiked
its policy rate to 15 per cent from 9.0 per cent,
reversing its unorthodox monetary policies.
Major economies in Africa also continued to
tighten their financial conditions. The Central
Bank of Egypt and the Reserve Bank of South
Africa raised policy rates by 2 bps and 125 bps, to
18.25 per cent and 8.25 per cent, respectively, in
the first half of 2023. The Bank of Ghana raised its
policy rate by a cumulative 250 bps, to 29.50 per
cent. However, the People’s Bank of China
retained the anchor rate at 3.65 per cent
throughout the period to balance growth and
safeguard the yuan.

Table 2.5: Monetary Policy Rates of Selected Central Banks
Country
2022H1
2022H2
2023H1
United States
4.5
4.50
5.25
United Kingdom
1.25
3.50
5.00
Japan
-0.10
-0.10
-0.10
Canada
1.75
4.25
4.75
Euro Area
0.0
2.50
4.00
China
3.70
3.65
3.65
India
4.9
6.25
6.50
Mexico
7.75
10.5
11.25
Turkey
14.0
9.0
15.0
Egypt
11.5
16.25
18.25
Ghana
19.0
27.00
29.50
South Africa
7.00
7.00
8.25
Nigeria
14.00
16.50
18.50
Source: Various Central Bank Websites.


2.6
FISCAL MEASURES
Fiscal authorities faced the dilemma of supporting
counter-inflationary measures and providing
relief to the vulnerable. Several European
countries commenced the reform of their fiscal
framework
after
adopting
flexible
policy
measures to cushion the effects of the COVID-19
pandemic. The new measures were aimed at
achieving debt sustainability and building up fiscal
buffers. The EU also extended the escape clause
earlier adopted in 2022 to allow greater flexibility
when countries are faced with shocks.


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During the period, the Turkish government rolled
out a programme to provide free natural gas to
households for one year to stem the cost-of-living
crises in the country. Some countries within the
EU, such as Germany and France, also
implemented energy subsidies to address the
elevated energy prices owing to the RussiaUkraine war.
In Africa, Heads of Government, the African
Development
Bank,
Development
Finance
institutions,
and
institutional
investors
established the modalities for developing 69
priority infrastructure projects worth US$160
billion, expected to be completed by 2030. The 69
projects were under the Programme for
Infrastructure Development in Africa (PIDA), a
blueprint for infrastructure development meant
to increase Africa's output, competitiveness and
economic integration.
Also, the Governments of Egypt and Ghana
secured loans of about US$3 billion each from the
IMF.
The
loans
aimed
at
restoring
macroeconomic
stability,
particularly
safeguarding
domestic
currencies
while
protecting
the
vulnerable.
The
countries
introduced reforms towards a more sustainable
debt framework, preserve financial stability,
restore buffers, and pave the way for privatesector-led
growth.
To
address
the
high
inflationary pressure and fiscal prudence, the
Bank of Ghana signed a Memorandum of
Understanding with the Ghanaian government to
eliminate fiscal dominance by halting the
financing of the budget through Ways and Means
Advances.


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Section Three
MACROECONOMIC
PERFORMANCE
THE DOMESTIC ECONOMY
• Monetary Policy
• Real Economy
• Fiscal Policy
• Financial Markets
• Payments System
• External Sector


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3.1
MONETARY POLICY


Major Economic
Development


Exchange rate instability

Heightened currency
speculation

Elevated global inflation

Insecurity-induced
inflationary pressure
Priorities of Monetary Policy


Ensure exchange rate &
price stability

Strengthen financial
market fundamentals

Encourage credit flow to
the real sector


Implications


Persistence of
macroeconomic risk

Pressure on the exchange
rate

Declining but double-digit
inflation figure

Heightened investors’
sentiment


Monetary Policy Environment
Liquidity Management
Throughout the first half of the year, the Central Bank of Nigeria (CBN) employed
Open Market Operations (OMO), reserve requirements, and discount window
operations to maintain optimal banking system liquidity. In response to
escalating inflationary pressures, the CBN adhered to a tight monetary policy
stance, incrementally raising the Monetary Policy Rate (MPR) by 50 basis points
at each of the January, March, and May 2023 Monetary Policy Committee (MPC)
meetings, reaching 18.5 percent.
The asymmetric corridor, set at +100/-700 basis points around the MPR,
alongside the Cash Reserve Ratio (CRR) at 32.5 percent and Liquidity Ratio at 30
percent, remained unchanged. The Bank's decisions were driven by upside risks
to the inflation outlook and a commitment to uphold its credibility, aligning with
earlier forward guidance to tighten policy in the face of persistent inflationary
trends.
Exchange Rate Policy

In an official press release issued on June 14, 2023, the CBN
informed business stakeholders and the public about immediate
adjustments to the operations of the Nigerian foreign exchange
market. These modifications entail consolidating multiple
exchange rates into the Investors and Exporters (I&E) window,
providing unrestricted access to foreign exchange for all eligible
transactions without segmentation.
Instruments of MP
In
fulfilling
its
statutory
mandate, the Bank utilized a
variety of monetary policy
instruments during the review
period.

The CBN Bill remained the
major instrument of
monetary policy,
complemented by:

Cash Reserve Ratio (CRR)

Standing Facilities
operations

Interventions in the
foreign exchange market.
Trend in Monetary Policy Rate (per cent)

Monetary Policy Decisions

January
23 and
24, 2023

Raised the MPR to 17.5 percent
Retained the CRR at 32.5 percent
Retained the Liquidity Ratio at 30.0 percent; and
Retained the Asymmetric corridor at +100 and -700
basis points around the MPR.

March 20
and 21,

Raised the MPR to 18.0 percent
Retained the CRR at 32.5 percent
Retained the Liquidity Ratio at 30.0 percent; and
Retained the Asymmetric corridor at +100 and -700
basis points around the MPR.

May 23
and 24,

Raised the MPR to 18.5 percent
Retained the CRR at 32.5 percent
Retained the Liquidity Ratio at 30.0 percent; and
Retained the Asymmetric corridor at +100 and -700
basis points around the MPR.


Monetary Policy
objectives
Price stability
Headline inflation: 6-9%


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3.2
THE REAL ECONOMY
3.2.1 Domestic Output
The economy maintained its growth trajectory,
albeit at a slower pace, despite significant
headwinds in the first half of the year. Real
Gross Domestic Product (GDP) grew by 2.41 per
cent to N35,469 billion, compared with 2.91
per cent and 3.32 per cent in the preceding and
the first halves of 2022, respectively. The
growth
was
on
account
of
sustained
improvement in the performance of the non-oil
sector, which grew by 3.18 per cent to N33,420
billion in the first half of 2023. Continued
growth in the non-oil sector was largely, driven
by increased investment in ICT infrastructure,
owing to the continued deployment of the Fifth
Generation (5G) broadband services, and
improved finance and insurance services. Also,
the 2023 general elections and the prepopulation census spending gave further
impetus to growth.
The growth momentum, however, moderated
on account of both global and domestic
headwinds. On the global front, energy costs,
exacerbated by the lingering effects of the
Russia-Ukraine war, coupled with sustained the
hikes in policy rates to contain inflation,
weakened the productive base of the economy.
On the domestic front, the subsisting
infrastructural and security challenges, and
hike in PMS prices, constrained production
activities during the period.


Figure 3.2.1: GDP Growth Rate (per cent)
Source: National Bureau of Statistics (NBS).

The oil sector contracted by 8.70 per cent to
N2,049 billion during the period, compared with
the 18.66 per cent and 19.71 per cent in the
preceding and first halves of 2022, respectively,
due to lower crude oil prices. However, the
narrowed contraction was on account of
improved security measures in the crude oil
production and distribution infrastructure. In
addition, sustained investment, such as the
exploration activities by the Nigeria National
Petroleum
Company
(NNPC)
Limited,
particularly in the Middle Benue Trough
(starting with the Ebenyi-A Exploration Well in
Nasarawa State) contributed to the lower
contraction.
Furthermore, Total Energies made a significant
oil and gas discovery in the Ntokon field, located
in Oil Mining Lease (OML)102 offshore Nigeria.
The Ntokon-1AX well has a reservoir of 38
meters of light oil and 15 meters of gas.
Consequently, at an average daily production of
1.21 million barrels per day (mbpd), Nigeria’s
crude oil output in the first half of 2023,
increased by 2.54 per cent, over 1.18 mbpd in
the second half of 2022. In contrast, the

2019H1 2019H2 2020H1 2020H2 2021H1 2021H2 2022H1 2022H2 2023H1
Total GDP
Non-Oil GDP
Oil GDP


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production level fell slightly by 0.82 per cent,
relative to the levels in the corresponding half
of 2022.

Figure 3.2.2: Average Crude Oil Production
Source: Refinitiv Eikon (Thomson Reuters).

3.2.2 Sectoral Performance
Agriculture
Agriculture sector performance moderated in
the first half of 2023. The tepid growth was on
account of marked increases in input costs,
heightened security concerns along food
producing areas, and lagged effects of the 2022
flooding on farm produce, and food delivery
chain.
Thus, the agriculture sector grew tepidly by
0.32 per cent to N7,922 billion, compared with
the 1.69 per cent and 2.15 per cent in the
preceding and first halves of 2022, respectively.
The growth was driven mainly by crop
production, which grew faster at 1.88 per cent
compared with 1.86 per cent in the preceding
half. Forestry grew by 1.58 per cent while
livestock and fishery contracted by 17.3 per
cent and 1.59 per cent, respectively.


Figure 3.2.3: Agriculture Sector Performance (%)
Source: National Bureau of Statistics (NBS).

The growth of the sector was corroborated by
the higher Index of Agricultural Production,
which stood at 152.3 points (2010=100).

Table 3.2.1: Agricultural Production Index


First Half 2022, Second Half 2022, First Half 2023

%(3&1)
%(3&2)
Aggregate

Crops

Staples

other crops

Livestock

Fishery

Forestry

Source: National Bureau of Statistics (NBS).
Industry
The performance of the industry sector
remained weak on account of technical and
production challenges, especially in the crude
petroleum and natural gas sub-sector. The
sector contracted (though at a slower pace) by
0.76 per cent in to N7,025 billion the first half

2021H1
2021H2
2022H1
2022H2
2023H1
Crop Prod.
Livestock
Forestry
Fishing
Agric (RHS)

Millions Of Barrels Per Day


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of 2023, compared with 4.52 per cent and 4.73
per cent contractions inthe preceding and
corresponding halves of 2022, respectively.
Contraction in the industry sector was due to
the poor performance of the mining and
quarrying subsector, especially the crude oil
and natural gas activity sector as a result of
lower crude oil prices owing to increased global
supply of crude oil, particularly from the US and
Mexico. However, the solid mineral activity
sector grew further by 32.92 per cent
compared with 27.42 per cent in the preceding
half, on account of sustained implementation
of reforms.
The slow pace of contraction of the industry
sector was reflected in the improvement in the
index of Industrial Production, which, at 96.8
(2010=100) index points, rose by 6.5 per cent,
compared with 90.9 points in the preceding half
of 2022.
Figure 3.2.4.: Index of Industrial Production
Source: Computed based on data obtained from NBS and
Manufacturing Association of Nigeria (MAN).

Manufacturing subsector
The Manufacturing sub-sector remained largely
innovative and resilient to observed shocks as it
drove growth in the industry sector and overall
GDP growth with contributions of 0.87
percentage point and 0.18 percentage point,
respectively. The subsector also grew faster by
1.88 per cent, compared with 0.51 per cent in
the preceding half of 2022 on account of
innovative supply chain delivery systems and
other cost-cutting measures which improved
operational efficiency of manufacturing outfits
amid rising operational costs as well as
increased investment in plant and technology.
The sub-sector showed resilience in the face of
higher energy prices and weaker purchasing
power of citizens owing to rising inflationary
pressures. The improved performance was due
to rising demand for locally manufactured
goods. This resulted in higher manufacturing
capacity utilisation, which increased by 3.3
percentage points to 58.2 per cent, compared
with 54.9 per cent and 57.9 per cent observed
in the preceding and corresponding halves of
2022, respectively.

Construction
Construction subsector supported growth,
expanding by 3.34 per cent to N1,322 billion in
the first half of 2023, compared with a growth
of 4.59 per cent and 4.48 per cent in the
preceding and corresponding halves of 2022,
respectively. The positive performance of the
sub-sector
was
attributed
to
continued
investment in public ad private sectors to
narrow infrastructural deficit in the country.
This
included
the
completion
of
key
infrastructural projects, such as the Second
Niger Bridge, 200 out of 365 kilometres of the
Kano-Abuja highway, and 114 out of 127
kilometres of the Lagos-Ibadan highway. This
was in addition to the ongoing construction of

F I R S T H A L F
2 0 2 2
S E C O N D H A L F
2 0 2 2
F I R S T H A L F
2 0 2 3
Index
Manufacturing
Mining
Electricity
Industry


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the dual carriageway section of the KadunaKano Road and Federal Secretariat building
complexes in Anambra, Bayelsa, and Zamfara
states. Also, the number of housing units under
construction by the Federal Government
increased to 6,124 units as at June 2023, from
6,018 units and 5,698 units as at the end of the
preceding and corresponding halves of 2022,
respectively. In addition, the number of
completed housing units increased to 2,870
units as at end June 2023 from 2,515 units and
2,362 units at the end of the preceding and
corresponding halves of 2022, respectively.

Water Supply, Sewage and Waste
Management Sub-Sector
The
water
supply,
sewage
and
waste
management sub-sector grew by 14.72 per
cent to N114 billion, compared with 6.28 per
cent and 19.41 per cent in the preceding and
corresponding halves of 2022, respectively.
This resulted in a 0.04 percentage point
contribution to overall growth.

Energy
Electricity, Gas, Steam & Air conditioner
subsector
The Electricity, Gas, Steam & Air conditioner
subsector grew by 6.84 per cent to N161.87
billion in the first half of 2023, compared with
7.06 per cent and a contraction of 11.42 per
cent in the preceding and corresponding halves
of 2022, respectively. The growth was driven
mainly by the improvement in electricity

1 The five modular refineries are - the Waltersmith, Niger
Delta Petroleum Resources (NDPR), OMSA Pillar Astex
Company (OPAC), Duport and Edo Refineries.
generation occasioned by the execution of the
Siemens project and activation of the 700
megawatts Zungeru Hydroelectric Power Plant
to the national grid, among other investments.
Hence, the average electricity generation, at
4,193.4 MW/h increased by 4.0 and 10.3 per
cent, compared with 4,031.0 MW/h and 3,801.9
MW/h in the preceding and corresponding half
of 2022. Similarly, the average electricity
consumption rose by 13.4 per cent to 3,547.8
MW/h from 3,128.1 MW/h and 3,236.2 MW/h
in the preceding and corresponding halves of
2022. The increase was attributed to addional
investment in the electricity distribution chain
and continued deployment of prepaid meters
nationwide.
A
comprehensive
legal
and
institutional
framework for Nigeria's electricity industry was
created with the signing of the Electricity Act of
2023 into law. The Act aims to transform the
sector by empowering states, companies, and
individuals to generate, transmit and distribute
electricity. It addresses issues related to grid
instability, electricity access and employment
opportunities.
Refinery Operations
The output of the five modular refineries 1 in
Nigeria revealed that fuel oils constituted the
majority of products produced and was closely
followed by the automotive gas oil (AGO) or
diesel.


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Table 3.2.2: Total production from refineries
(million litres) 2023H1
Product
Jan
Feb
Mar
Apr
May
Jun
Total
AGO

DPK


NAPHTA

Fuel Oil

Total

Source: Nigerian Midstream and Downstream Petroleum Regulatory
Authority (NMDPRA).

Consumption of Petroleum Products
Nigeria’s
Premium
Motor
Spirit
(PMS)
consumption fell during the period on account
of the removal of subsidy, which led to a
reduction in domestic demand. The total
estimated volume of Premium Motor Spirit
(PMS) consumed in the first half of 2023 fell by
5.55 per cent to 11.480 billion litres from
12.155 billion litres and 12.190 billion litres in
the preceding and corresponding halves of
2022. However, the total estimated volume of
Automotive Gas Oil (AGO) consumed increased
by 21.09 per cent and 26.29 per cent, to 2.536
billion litres from 2.094 billion litres and 2.008
billion litres in the preceding and corresponding
halves of 2022.
Table 3.2.3: Industry Sector Performance (Growth rate)

2020H

2020H

2021H

2021H

2022H

2022H

2023H

Industry Sector

Mining and
Quarrying
-1.04 -15.54 -6.98
-8.67 -19.27 -16.94 -8.00
Manufacturing

Electricity,
Gas, Steam &
Air conditioner

Water supply,
sewage, waste
Management.

Construction

Source: National Bureau of Statistics (NBS).
Services
The services sector sustained its performance
and remained the major driver of growth owing
to the increased leverage of ICT in business and
improved access to credit by financial
institutions. The Sector contributed 2.49
percentage points to the overall growth and
rose by 4.39 per cent to N20,521 billion in the
first half of 2023, compared with 6.29 per cent
and 7.07 per cent in the second and first halves
of 2022, respectively.


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Source: National Bureau of Statistics (NBS).

Information and Communication Technology
During the first half of 2023, the Information
and Communication industry maintained a
positive growth trajectory, contributing 1.63
percentage points to real GDP growth. The
sector grew by 9.40 per cent to N6,56 billion,
compared with 10.43 per cent and 9.06 per cent
in the second half and first half 2022,
respectively. The sector’s performance was
attributed to substantial investment in the 5G
network services by the telecommunication
companies. Despite the huge investment in the
subsector, slower growth was realised in the ICT
subsector on account of the 1.12 per cent drop
in the number of active telecom subscriptions
to 221.26 million, below 222.57 million
recorded at end-December 2022.

In addition, the broadband penetration rate
declined to 47.01 per cent below its preceding
level of 47.36 per cent within the same
timeframe. The development was attributed to
the disconnection of customers who were
unable to comply with the enhanced Subscriber
Identity
Module
(SIM)
registration
requirements by the government. The policy
which
also
discouraged
new
SIM
card
registration was intended to check rising
security challenges and improve the national
security environment.
Teledensity, which gauges the number of
telephone connections per 100 individuals also
dipped to 115.30 per cent in the first half of
2023, compared with 116.60 per cent at endDecember 2022.
Table 3.2.4: Services Sector Performance (Growth rate)

2020H1
2020H2
2021H1
2021H2
2022H1
2022H2
2023H1
Contributio
n to
Growth in
2023H1
Services Sector

Trade

Accommodation and Food
Services

Transportation and Storage

Information and
Communication

Arts, Entertainment &
Recreation

Financial and Insurance

Real Estate

Professional, Scientific &
Technical Serv.

Administrative and Support
Services

Public Administration

Education

Human Health & Social
Services


4.39
2.20
0.02
Other Services


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Figure 3.2.5.: Active Telephony Subscriptions and
Teledensity 2023H1
Source: Nigerian Communications Commission (NCC).
Domestic Wholesale and Retail Trade
The domestic wholesale and retail trade
subsector also supported growth, contributing
0.1 percentage point to the overall growth. The
subsector grew at a slower pace, on account of
policy-induced shocks on aggregate demand,
which manifested in weaker purchasing power of
households, and higher energy costs.

Education
Similarly, the education subsector grew by 1.01
per cent to N570 billion compared with 1.18 per
cent and 1.58 per cent in the preceding and
corresponding halves of 2022. The growth was
on account of continued efforts by the
government to improve access and the quality
of infrastructure of educational institutions
nationwide. Thus, the FGN signed the Student
Loan Bill (2023) into law, to provide financial
assistance to Nigerian students in tertiary
institutions through the Education Loan Bank.
Similarly,
the
Federal
Executive
Council
approved the establishment of 37 new private
universities across the country. The Federal
Government also approved the disbursement
of N320.34 billion intervention fund to public
tertiary institutions nationwide.

Transport
The Transport subsector dragged growth,
dipping by 18.1 per cent to N366.41 billion from
N593.21 billion and N509.61 billion in the
preceding and corresponding halves of 2022,
respectively. The poor performance of the
sector was attributed to the unintended effects
of the currency redesign policy and hike in the
price of PMS, which increased transport costs.
The number of passengers who used the rail
transport service decreased to 915,842 persons
from 1,837,456 persons and 1,375,492 persons
in the preceding and corresponding halves of
2022, respectively. The decrease was due to
perceived security concerns along the rail
routes amid intermittent suspension of rail
services on account of derailment of coaches
from the rail lines. However, the volume of
cargoes increased to 115,995 tonnes from
86,448 tonnes and 70,576 tonnes in the
preceding and corresponding halves of 2022,
respectively. Similarly, the number of airlifted
passengers on the domestic and international
routes fell to 8,096,505 from 9,347,079 and
9,965,684 in the preceding and corresponding
periods of 2022, respectively. Also, cargo
movement by air fell to 60.536 million kg from
75.236 million kg and 80.529 million kg in the
preceding and corresponding halves of 2022,
respectively. However, the number of ocean
going vessels increased to 2,454 tonnes from
2,429 tons and 2,346 tonnes in the preceding
and corresponding halves of 2022, respectively.
The volume of cargo throughput also increased
to 84.299 million tonnes, from 79.089 million
tonnes in the preceding half, though below the


Teledensity (%)
Number of Subscriptions
Subscriptions
Teledensity


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
84.659 million tonnes recorded in the
corresponding half of 2022.

3.2.3 Employment and Job Creation
The Federal Government sustained efforts at
improving the employment level in the country
by partnering with stakeholders. The federal
government, through the Ministry of Labour
and Employment collaborated with the German
Federal Ministry for Economic Cooperation and
Development to train 200,000 Nigerian youths
on various skills and equip them to be selfemployed. The training was on arts, fashion,
painting, baking, ICT, and fishery, among others.

The level of unemployment stood at 4.1 per
cent in the first quarter of the year compared
with 5.3 per cent at the fourth quarter of 2022.

3.2.4 Consumer Prices
Headline inflation maintained a northward
trajectory throughout the first half of 2023
despite sustained monetary policy tightening.
Notwithstanding the improvements in supply
chains, price pressures rose due to higher
energy cost and food prices that accompanied
the Russia-Ukraine war and exchange rate passthrough following elevated global inflation
rates. From the domestic front, cost-push
factors such as the removal of PMS subsidy and
the reforms in the foreign exchange market
accounted for the continued surge in aggregate
prices.
Furthermore,
other
structural
challenges
such
as
election-related
expenditures, the effect of the 2022 flooding
on farming activities, security challenges,
legacy infrastructural deficit, and expectations
of further increase in aggregate prices
continued to weigh on inflation.

Thus, the observed shocks in the macroeconomy drove headline inflation (year-onyear) to 22.79 per cent at end-June 2023 from
21.34 per cent at end-December 2022 and
18.60 per cent at end-June 2022. Further
analysis indicated that, although the seasonally
adjusted inflation rate was above the long-run
trend, there appeared to be a convergence to
its trend level, indicating that current shocks to
inflation would wane over time.


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
P
Figure 3.2.5: Headline Inflation Rate (per cent)
Source: National Bureau of Statistics (NBS).
Food Inflation
Aggregate food price increases remained
unabated and grew consistently to 25.25 per
cent at end-June 2023 from 23.75 per cent at
end-December 2022 and 20.60 per cent a year
ago. Food prices rose on account of continued
security challenges, particularly in major food
producing
areas,
exchange
rate
effect,
(especially on imported food and input for food
processing) as well as higher transport costs in
the delivery of farm produce to the markets.
The rise in food inflation was driven mainly by
processed food which accounted for an
average of 13.7 percentage points compared
with the average of 10.9 percentage points
contributed by farm produce.
Figure 3.2.6: Contribution of Processed Food and Farm
Produce (Percentage Points) to Food Inflation
(Per cent), First Half 2023
Source: National Bureau of Statistics (NBS).

Peocessed food
Farm Produce
Food


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Table 3.2.5: Average Contribution of Components of
Processed Foods, 2023H1

Source: National Bureau of Statistics (NBS).


Core Inflation
Underlying inflationary pressures persisted
throughout the period, as core inflation
measures, such as ‘all items less farm produce’
and ‘all items less farm produce and energy’,
indicated a rising trajectory of the non-volatile
component of the CPI. Supply side shocks drove
core inflation (all items less farm produce and
energy) to 20.06 per cent at end-June 2023
from 18.21 per cent at end-December 2022
and 15.70 per cent in June 2022. Further review
of the core inflation rate using alternative
measures such as the trimmed mean (20.0 per
cent trim) and the trimmed median, revealed
that the core inflation rate continued to follow
a northward trajectory.

Figure 3.2.7: Core Inflation Measures, (Seasonally
Adjusted) per cent

January 2020
June 2023
core1_inf
core2_inf
Trimmed mean
Trimmed Median

Source: National Bureau of Statistics (NBS).

Dynamics in core inflation was driven by
processed food items, which contributed an
average of 8.23 percentage points in the first
half of 2023. This was followed closely by the
housing, water, electricity, gas, and other fuel
components, which contributed an average of
3.89 percentage points to core inflation.
Clothing and footwear component also drove
core inflation by an average of 2.04 percentage
points during the period. Further analysis
revealed that fish & sea food (due mainly to
higher cost of fish feed and other inputs), meat,
and guinea corn flour contributed an average of
25.79 per cent, 21.34 per cent, 19.11 per cent
and 7.34 per cent, respectively, to the upward
pressure from the processed food component of
the core inflation in the first half of 2023.

Component
Share (%)
Fish & Sea Food
25.79
Meat
21.34
Guinea Corn Flour Sold Loose
19.11
Corn Flakes 350g
7.38
Gari Yellow Sold Loose
4.31
Oil & Fats
4.12
Milk, Cheese & Eggs
3.86
Fritters (Puff Puff)
3.21
Eko (Agidikafa)
2.26
Sugar, Jam, Honey, etc.
2.05
Custard 300g
1.99
Plantain Flour
1.52
Corn Flour 2kg
1.21
Others
1.84


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Figure 3.2.8: Component Contribution to Core2 Inflation
(Percentage Points)
Source: National Bureau of Statistics (NBS).

3.2.5 Development Financing
The Bank continued to intervene in the critical
sectors of the economy. The Bank reduced the
pace of its intervention in the critical segments
of the economy, relative to the preceding and
the corresponding periods of 2022. A total of 63
projects, including 134,275 individuals and
businesses benefited from the Bank’s 13
intervention programmes, compared with 125
and 187 projects, including 279,211 and
134,275 individuals and businesses that
benefited from its 20 and 19 programmes in the
preceding and the corresponding periods of
2022, respectively.
Cumulative disbursement declined by 35.4 per
cent to N331.33 billion below N513.13 billion in
the preceding half of 2022, while the repayment

2 This measures underlying inflation by excluding farm
produce from Headline inflation
increased by 27.4 per cent to N264.04 billion
above N207.33 billion in the same period. The
increase in recovery reflected the drive for
repayments.
Activities at the National Collateral Registry (NCR)
indicated mixed performance. The number of
financing statements and number of borrowers
indicated that 30,327, worth N833.49 billion, was
registered in respect of 31,734 borrowers during
the review period, compared with 40,909, worth
N1,025.61 billion, in respect of 42,695 borrowers
in the second half of 2022.
A further breakdown indicated that 48.79 per cent
of the financing statements were for 47.81 per
cent of borrowers (female and female-owned
enterprises). When compared with the second
half of 2022, 51.43 per cent of the financing
statements were in respect of 50.57 per cent of
total borrowers (female and female-owned
enterprises). From the inception of the NCR in
2016 to end-June 2023, a total of 146 financial
institutions had registered 319,220 financing
statements valued at N17.24 trillion.

Table 3.2.6: No. and Value of Secured Transactions in Movable
Assets (STMA) Financing Statements in respect of Females and
Female-owned Businesses 2023
Debtor
Type
No. of Financing
Statements in respect
of Females and
Female-owned
Businesses
No. of Female and
Female-owned
Enterprise Borrowers
Financing Statements
(N' billion)

2022H2
2023H1
2022H2
2023H1
2022H2
2023H1
Individual

Large
Business

1.19
0.59
Medium
Business

2.78
1.92
Micro
Business

0.19
0.30
Small
Business

2.23
1.44
Total

Source: Central Bank of Nigeria.


Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov '22
Dec '22
Jan '23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
Miscellaneous Goods & Services
Restaurant & Hotels
Education
Recreation & culture
Communication
Transport
Health
Furnishings, Household Equip &HH Maint.
Housing,Water, Elect.Gas & Other Fuel
Clothing & footwear
Alcoholic Bev. Tobacco & Kola
Non-Alcoholic Beverages
Processed Food
Core1


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption

Table 3.2.7: No. and Value of Secured Transactions in
Movable Assets (STMA) Financing Statements 2023
Debtor
Type
No. of Financing
Statements in
respect of Females
and Female-owned
Businesses
No. of Female and
Female-owned
Enterprise
Borrowers
Financing Statements
(N' billion)

2022H2
2023H1
2022H2
2023H1
2022H2
2023H1
Individual

Large
Business

95.34
168.07
Medium
Business

Micro
Business

2.50
2.07
Small
Business

Total

Source: Central Bank of Nigeria.

3.2.5 Financial Inclusion
The drive towards the attainment of 95.0 per
cent financial inclusion target by 2024 was
enhanced by the significant increase in the use
of the agent network, which increased to 1.67
million by June 2023, to bridge the channels
dispersion gap, particularly in the rural areas
and
Northern
Nigeria. Also,
Unique/Foundational
ID
with
total
NIN
registrations reaching 101 million as of June 26,
2023, were optimised. In addition, SabiMoni eLearning Platform was launched to facilitate
self-paced online delivery of the financial
literacy curriculum for the Volunteer Corps
Members (VCMs) to reduce dependence on
manual and paper-based training materials, and
to
broaden
outreach
to
the
target
consumers. Similarly, 195,314 agents were
onboarded under the SANEF agent expansion
scheme, bringing the total to 1,669,487, and
increasing access point per capita to 1,574
agents per 100,000 adults.

Table 3.2.8 Disbursements on Interventions in 2022H1, 2022H2 and 2023H1
Interventions
2022H1
2022H2
2023H1 *
Disbursements

Repayments
Disbursements

Repayments
Disbursements

Repayments
Amount
Beneficiaries

Amount
Amount
Beneficiaries

Amount
Amount
Beneficiaries

Amount
(N
Billion)

(N Billion)
(N
Billion)

(N Billion)
(N
Billion)

(N Billion)
Agricultural Credit Guarantee
Scheme (ACGS)
3.21
13,194 Loans
Guaranteed

2.14
5.25
30,650 Loans
Guaranteed

₦3.14
0.03
10,304 loans

₦3.30
Commercial Agricultural Credit
Scheme (CACS)
28.3
12 Projects

32.86
0.99
11 Projects

43.61

1 Project

40.7
Anchor Borrowers' Programme
35.52
28,875 farmers

42.99
103.72
245,361 farmers

63.37
37.9
123,856
farmers

82.15
Accelerated Agriculture
Development Scheme (AADS)
1.5
1 State
governmentsponsored
projects

4.37
0.18
1 State governmentsponsored projects

1.64
Nil
Nil

1.92
Maize Aggregation Scheme (MAS)
Nil
Nil

Nil
Nil
Nil

Nil
Nil
Nil

-
Paddy Aggregation Scheme (PAS)
6.2
3 Projects

Nil
Nil
Nil

Nil
Nil

4.5
Presidential Fertilizer Initiative (PFI)
Nil
Nil

Nil
Nil

Nil
Nil

National Food Security Programme
(NFSP)
Nil
Nil

2.03
Nil
Nil

4.95
Nil
Nil

3.29
Real Sector Support Facility Using
Differentiated Cash Reserve Ratio
(RSSF-DCRR)
210.29
34 Projects

18.5
73.2
16 Projects

27.39
114.12
16 Projects

43.24
COVID-19 Intervention for
Manufacturing Sector (CIMS)
413.84
50 Projects

131.26
29 Projects

7.95
83.65
24 Projects

30.03
Non-oil Export Stimulation Facility
(NESF)
Nil
Nil

Nil
Nil

7.45
Nil
Nil

4.08
Micro, Small and Medium
Enterprises Development Fund
(MSMEDF)
Nil
Nil

2.52
0.01
130 Beneficiaries

5.07
Nil
Nil

1.22
Agribusiness/Small and Medium
Enterprises Investment Scheme
(AGSMEIS)
1.6
2,720
Beneficiaries

0.008
1.32
154 Beneficiaries

2.75
4.19
1 Project

Nil
Creative Industry Financing
Initiative (CIFI)
Nil
Nil

0.28
0.17
30 Beneficiaries

0.3
Nil
Nil

0.41
Targeted Credit Facility (TCF)
24.37
50,302
Beneficiaries

Nil
1.21
2,863 Beneficiaries

0.82
0.035

Beneficiaries

1.05
Nigeria Youth Investment Fund
(NYIF)
Nil
Nil

0.28
0.88
Nil

2.62
Nil
Nil

-
Shared Agent Network Expansion
Facility (SANEF)
Nil
Nil

0.37
Nil
Nil

0.4
Nil
Nil

0.85
Healthcare Sector Intervention
Facility (HSIF)
17.21
11 Projects

Nil
12.28
8 Projects

6.53
Nil
Nil

7.44
Healthcare Sector Research &
Development Intervention (Grant)
Scheme (HSRDIS)
0.02
-

Nil
0.03
1 Project

Nil
0.04
N/A

-
National Mass Metering
Programme (NMMP)
0.2
3 DisCos

Nil
3.11
3 DisCos

0.36
2.4
N/A

1.87
Nigeria Electricity Market
Stabilization Facility (NEMSF - 2)
34.37
8 DisCos

Nil
63.64
8 DisCos

13.98
35.57
8 DisCos

21.95
Nigeria Bulk Electricity Trading –
Payment Assurance Facility (NBETPAF)
26.93
1 Project

322.87
Nil
1 Project

Nil
Nil
Nil

Nil
Solar Connection Facility (SCF)

Nil

Nil

Nil

Nil
Nil
Nil

1.07
Intervention Facility for Nigeria Gas
Expansion Programme (IFNGEP)

4 Projects

Nil
9.3
2 Projects

Nil
Nil
Nil

Nil
Tertiary Institution
Entrepreneurship Scheme (TIES)
0.26
53 Beneficiaries

Nil
0.06
20 Beneficiaries

Nil
0.16

Beneficiaries

Nil
100FOR100 Policy on Production
and Productivity (100FOR100 PPP)
69.13
51 Projects

1.43
82.54
31 Projects

1.14
47.23
20 Projects

6.1
Youth Entrepreneurship
Development Programme (YEDP)
Nil
Nil

0.12
Nil
Nil

0.001
Nil
Nil

0.00013
Power and Airline Intervention
Facility (PAIF)
Nil
Nil

15.91
Nil
Nil

4.37

1 Project

5.87
Textile Sector Intervention Facility
(TSIF)
Nil
Nil

8.62
1.5
3 Projects

4.49
Nil
Nil

Nil
Private – Accelerated Agricultural
Development Scheme (P-AADS)
Nil
Nil

Nil
Nil
Nil

Nil
Nil
Nil

Nil
Export Facilitation Initiative (EFI)

5 Projects

Nil
Nil
Nil

Nil
Nil
Nil

Nil
Export Development Facility (EDF)
17.08
15 Projects

Nil
22.39
14 Projects

Nil
Nil
Nil

Nil
Source: Central Bank of Nigeria.


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
3.3
FISCAL DEVELOPMENTS
Fiscal policy in the first half of 2023 towed the path
of fiscal consolidation with the implementation of
broad reforms to widen the fiscal space and
ensure fiscal viability. In addition, expenditure and
public debt policies were implemented to reflect
efforts at softening the impact of external and
domestic headwinds.
Consequently, the fiscal operations of the Federal
Government (FGN) resulted in an overall deficit of
3.1 per cent of GDP, while public debt, at 25.0 per
cent of GDP (at end-March 2023) remained within
the 40.0 per cent medium-term domestic debt
strategy threshold.
3.3.1 Federation Account Operations
•
Federation Revenue
Revenue performance in the review period was
influenced by broad reforms in the mineral and
non-oil sectors. Specifically, the Finance Act 2023,
helped broaden the tax base to include digital
assets for capital gains. However, the continued
crude oil theft, and subsisting tax expenditures
lowered accretion to the Federation Account.

3 Earnings lodged in the Federation Account by virtue of Section 161 of the
Federal Republic of Nigeria Constitution 1999 as amended.
Key Budget Parameters and Projections
Source: 2023 Appropriation Act.

Relative to the second half of 2022, federation
revenue in the first half of 2023 waned, owing to
subsidy on premium motor spirit, and low
domestic crude oil production. At N6,903.32
billion or 5.4 per cent of GDP, provisional gross
federally collected revenue3 declined by 5.5 per
cent, relative to the level in the second half of
2022, and fell short of the proportionate budget
by 34.8 per cent. However, it was 25.0 per cent
above collection in the first half of 2022. The
performance, relative to the corresponding half of
2022, reflected payoffs from non-oil revenue
reforms, including the Strategic Revenue Growth
Initiatives (SRGIs); and higher oil revenue,
following the removal of the petrol subsidy.
•1.69 mbpd
Daily oil production
•US$75.00
Crude oil price
•N435.57/US$
Exchange rate
•3.75 %
GDP growth
•17.16 %
Inflation rate
Deficits
N11.60 Trillion
Expenditure
N22.65 Trillion
Revenue
N11.05 Trillion

This document is for CBN internal consumption
This document is for CBN internal consumption
Figure 3.3.1: Structure of Federation Revenue (per cent)
Sources: Federal Ministry of Finance, Budget and National Planning
(FMFB&NP) and Office of the Accountant General of the Federation
(OAGF).

The strong performance of non-oil revenue was
sustained in the first half of 2023, accounting for
68.9 per cent of total federation earnings.
Improvement in non-oil revenue reflected the
benefits from fiscal consolidation measures
implemented under the Finance Act 2023.
Conversely, the contribution of oil continued to
decline from 37.9 per cent in the first half of 2022,
to 31.1 per cent in the current period. Structural
rigidities, burden of subsidy payments and low
domestic crude oil production due to theft,
insecurity, and under-investment in the upstream
sector,
contributed
to
the
depressed
performance of oil revenue.
Drivers of Federally Collected Revenue
Non-oil Revenue
Sustained growth in the economy, tax reforms,
and expenditure rationalisation in GovernmentOwned Enterprises and MDAs, drove non-oil
revenue performance in the period. In nominal
terms, non-oil revenue at N4,753.18 billion (3.3
per cent of the GDP), surpassed the levels in the
first half of 2022 by 38.7 per cent and the
preceding half by 1.4 per cent. However, the
collection fell short of the proportionate target by
17.6 per cent.

Figure 3.3.2: Composition of Non-Oil Revenue (per cent)
Sources: Federal Ministry of Finance, Budget, and National Planning
(FMFB&NP) and Office of the Accountant General of the Federation
(OAGF).

Oil Revenue
Low domestic crude oil production and subsidy
deductions, majorly contributed to the decline in
oil receipts in the period. Oil revenue at N2,150.14
billion (2.0 per cent of the GDP), underperformed
in relation to the proportionate budget of
N4,821.79 billion by 55.4 per cent. However, it
surpassed the level in the first and second halves
of 2022 by 2.6 per cent and 17.8 percent,
respectively.
Figure 3.3.3: Composition of Oil Revenue (per cent)

Source: Federal Ministry of Finance, Budget, and National Planning
(FMFB&NP) and Office of the Accountant General of the Federation
(OAGF).

Deductions
From the gross revenue of N6,903.32 billion
realised in the first half of 2022, statutory
deductions from oil and non-oil revenue, as well
as transfers, amounted to N2,727.30 billion,
PPT &
Royalties
97.9%
Others

1st Half 2022 2nd Half 2022 1st Half 2023
Budget
Oil Revenue
Non-Oil Revenue
Company
Income Tax
24.8%
Customs &
Excise Duties
16.2%
ValueAdded Tax
30.5%
FGN
Independent
Revenue
28.2%
Other
Transfers
0.4%


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
leaving a net distributable balance of N4,649.76
billion.

Allocations to the three tiers of government
Allocation to the three tiers of government
exceeded the level in the first half of 2022, owing
to improved non-oil revenue. Total disbursement
exceeded the level in the corresponding half of
2022 by 19.0 per cent. However, it was 2.5 per
cent and 28.9 per cent below the levels in the
second half of 2022 and the half year budget,
respectively. The shortfall in federation allocation,
relative to the target, exacerbated fiscal pressure
at the central and subnational levels.

Table 3.3.1: Federally Collected Revenue and
Distribution (N Billion)


1st Half

2nd Half

1st Half

Budget
Federation Revenue (Gross)

Oil


Crude Oil & Gas Exports

PPT & Royalties

Domestic Crude Oil/Gas Sales

Others


Non-oil


Corporate Tax


Customs & Excise Duties

Value-Added Tax (VAT)

Independent Revenue of Fed.
Govt.

Others*


Total Deductions/Transfers*

Federally
Collected
Rev
(Net)
Less Deductions
& Transfers**


Plus:


Additional Revenue

Excess Oil Revenue

Excess Non-Oil Revenue

Exchange Gain

10.35
12.94
215.48

Total Distributed Balance

Federal Government

State Governments

Local Governments

13% Derivation

Sources: Federal Ministry of Finance, Budget, and National Planning
(FMFB&NP).


4 Revenue Statistics in Africa 2022, OECD Publishing.

Figure 3.3.4: Distribution to the Three Tiers of Government
and 13% Derivation Fund (N Billion)
Source: Federal Ministry of Finance, Budget, and National
Planning (FMFB&NP) and Office of the Accountant General of
the Federation (OAGF).

Tax Effort
Analysis of the structure of federation revenue
indicates declining contribution of taxes to total
federation earnings. Tax revenue accounted for
79.9 per cent of total federation revenue in the
first half of 2023, compared with 84.5 per cent
and 87.3 per cent in the first and second halves of
2022, respectively. Income tax (consisting of
Petroleum Profit Tax (PPT) and Company Income
Tax (CIT)) remained the main driver of tax revenue
in the period.
Tax revenue-to-GDP, at 5.4 per cent, was
marginally above the first half tax revenue-to-GDP
ratio of 5.2 per cent, but was below the level in
the second half of 2022 of 5.8 per cent. This
compares with an average tax revenue-to-GDP of
16.0 per cent in 31 African countries4.
Figure 3.3.5: Composition of Tax Revenue

Sources: Staff computation using data from the Federal Ministry of
Finance, Budget and National Planning (FMFB&NP) and Office of the
Accountant General of the Federation (OAGF).
Note: Income tax consists of CIT and PPT. However, PPT includes
royalties, which might overstate PPT contribution.

2022H1
2022H2
2023H1
Half Year
Benchmark
Income Tax
Consumption Tax
Trade Tax
Other Taxes

FG
SG
LG
13%
Half Year
Benchmark
2023H1
2022H2
2022H1

This document is for CBN internal consumption
This document is for CBN internal consumption
Table 3.3.2: Tax & Non-Tax Revenue Structure (N Billion)

2022H1
2022H2
2023H1
Budget
Total revenue

Non-Tax

Tax

Tax Revenue Percentage of:


Total Revenue

GDP

Income tax

PPT

CIT

Consumption tax

Trade tax

Other Taxes

Note: PPT includes royalties, thus overstating its contribution.
Other Taxes includes Education Tax.
Sources: Staff computation using data from the Federal Ministry of
Finance, Budget and National Planning (FMFB&NP) and Office of the
Accountant General of the Federation (OAGF).

3.3.2 Fiscal Operations of the Federal
Government
FGN Retained Revenue
Retained revenue of the FGN rose significantly,
relative to the corresponding period of 2022.
Provisional FGN retained revenue, at N3,128.31
billion or 2.6 per cent of the GDP, outpaced
performance in the first half of 2022 by 34.9 per
cent, reflecting higher statutory and independent
FGN receipts. However, relative to the second
half of 2022 and the target, FGN retained revenue
dropped by 6.3 per cent and 43.4 per cent,
respectively.
The
development
indicated
persisting revenue challenge, despite growing
non-oil revenue.


5 N317.71 billion in domestic debt repayment, and
USD906.24 million or N386.05 billion @ N426 /USD1
Table 3.3.3: FGN Retained Revenue (N Billion)

2022H1
2022H2
2023H1
Budget
FGN Retained
Revenue

Federation
Account

VAT Pool
Account

FGN
Independent
Revenue

Excess Oil
Revenue

Excess Non-Oil

Exchange Gain

Others*

Sources: Federal Ministry of Finance, Budget and National Planning
(FMFB&NP) and Office of the Accountant General of the Federation
(OAGF)
Note*: Includes Transfers from Special Levies Accounts, FGN’s share
of Signature Bonus, Domestic Recoveries, Stamp Duty, Grants and
Donor Funding and Share of NLNG Dividend.

Federal Government Expenditure
Provisional aggregate expenditure of the FGN
declined, relative to the first half of 2022. At
N6,998.76 billion or 8.9 per cent of the GDP,
provisional aggregate expenditure of the FGN was
below the level in the first half of 2022 and the
benchmark by 13.0 and 35.9 per cent,
respectively. The lower expenditure was, driven
by reduced interest obligations, arising from the
redemption of N703.77 billion5 out of the total
debt stock of the FGN in 2022. Relative to the
second half of 2022, aggregate expenditure in the
first half of 2023 was, however, higher by 8.3 per
cent, driven by increased capital spending.
At N4,147.27 billion or 5.7 per cent of the GDP,
total recurrent expenditure accounted for 59.3
per cent of total expenditure, while capital
expenditure and transfers constituted 34.0 per
cent and 6.7 per cent, respectively.


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Table 3.3.4: FGN Expenditure (N Billion)

2022H1
2022H2
2023H1
Budget
Aggregate
Expenditure

Recurrent

of which:


Personnel Cost

Pension
and
Gratuities

Overhead Cost

Interest
Payments

Domestic

External

Special Funds

Capital
Expenditure

Transfers
419.98

325.24

474.94

483.74


Source: CBN Staff Estimate.


Table 3.3.5: Economic Classification of
Government Expenditure, First Half 2023

Expenditure
(=N=billion)
Percentage share

Admin.
Economic
services
Social and
community
services
Transfers
Recurrent
4,147.27


Capital

Transfers
474.94


Source: CBN Staff Estimate.


Figure 3.3.6: Composition of Federal Government
Expenditure in per cent

Sources: Office of the Accountant General of the Federation (OAGF)
and Staff estimates.


Federal Government Fiscal Balance
The fiscal operations of the Federal Government in
the first half of 2023 recorded a deficit of 3.8 per
cent of the GDP, driven, largely, by low revenue
outcome. The fiscal operations of the Federal
Government resulted in an overall deficit of
N3,870.45 billion, representing a contraction of
32.4 per cent, relative to the level in the first half
of 2022 and was below the proportionate budget

62020-2023 Medium-Term Debt Strategy framework
by 28.2 per cent. It however, widened by 23.8 per
cent, when compared with the second half of
2022. The deficit was financed from domestic
(FGN Bond, Treasury Bills, Sukuk, Promissory
Notes, Treasury Bonds, Green Bonds, and Savings
Bonds) and external (Multilateral, Bilateral,
Commercial and Syndicated loans) sources.

Table 3.3.6: Federal Government Fiscal Operations
(N Billion)

2022H1
2022H2
2023H1*
Budget
Retained
revenue

Aggregate
expenditure

Primary
balance

Overall
balance

Deficit-toGDP (%)

Source: CBN Staff Estimates from available data.
Note: * 2023 Figures are provisional.

Figure 3.3.7: Federal Government Fiscal Operations
(N Billion)
Sources: Federal Ministry of Finance, Budget and National Planning
(FMFB&NP) and Office of the Accountant General of the Federation
(OAGF).
Note: revenue and expenditure figures are provisional.


3.3.3. Public Debt Strategy and Sustainability
FGN borrowing in the review period was anchored
on the 2020-2023 MTDS6, which stipulates a selfRecurrent
59.3%
Capital
34.0%
Transfers

2022H1
2022H2
2023H1
Budget
Revenue
Expenditure
Fiscal Balance

This document is for CBN internal consumption
This document is for CBN internal consumption
imposed debt-to-GDP threshold of 40.0 per cent,
as against the 70.0 per cent for Market AccessCountries (MAC7). The strategy also targets an
optimal portfolio mix of 70.0 per cent domestic
and 30 per cent external debt; among other
considerations
towards
ensuring
debt
sustainability.

Table 3.3.7: Revised MTDS Targets
Indicator
Targets
Targets
2016-2019
2020-

Fiscal Sustainability: Total Public
Debt as % of the GDP
Max. 25%
Max. 40%
Portfolio Composition:


Domestic: External Debt Mix
Max.60:
Min.40
Max.70:
Min.30
Refinancing Risk: Average Tenor of
Debt Portfolio
Min. 10
years
Min. 10
years
Long-Term: Short-Term
Min.75:
Max.25
Min.75:
Max.25
Domestic Debt Mix
Source: MTDS 2020-2023, Debt Management Office.


•
Total Public Debt
Public debt levels exceeded the 40.0 per cent debtto-GDP national threshold, but remained well
within the 70.0 per cent benchmark for MarketAccess Countries (MAC). Total public debt
outstanding, comprising Federal and State
governments’ debt obligation, at end-June 2023,
stood at N87,379.40 billion or 42.3 per cent of the
GDP, representing an increase of 103.9 and 75.3
per cent, above the levels at end-June 2022 and
end-March 2023, respectively. The increase was
attributed to the exchange rate revaluation and
securitisation of FGN Ways and Means Advances.


Table 3.3.8: Total Public Debt (N Billion)
Type
2022H1
2022H2
2023H1*
External Debt
16,615.66
18,702.25
33,248.98
Of which:


FGN
14,723.46
16,703.35
29,898.43

7 These are countries with capacity to access international markets
on a durable and substantial basis.
States & FCT
1,892.20
1,998.90
3,350.54
Domestic Debt
26,230.22
27,548.12
54,130.42
Of Which:


FGN
20,948.94
22,210.36
48,314.74
States & FCT
5,281.28
5,337.75
5,815.68
Total
42,845.88
39,556.03
87,379.40
Source: Debt Management Office.
Note: *As at end-June, awaiting third quarter figures.

The consolidated debt stock of the Federal
Government
(including
State
governments’
external debt, which are contingent liability of the
FGN) was N81,563.72 billion or 39.5 per cent of
the GDP, while State governments’ domestic debt
stock accounted for the balance of N5,815.68
billion or 2.8 per cent of the GDP.
Federal Government Debt Profile
A breakdown of the FGN debt shows domestic
debt at N48,314.74 billion (59.2%), while external
debt stood at N33,248.98 billion (40.8%) or
US$43.16 billion. FGN Bond maintained its
dominance in domestic debt portfolio, accounting
for 86.9 per cent, followed by Treasury Bills
(9.8%), Promissory Notes (1.6%), FGN Sukuk
(1.5%), and others8 (0.2%).

Figure 3.3.8: Composition of FGN Debt Stock (N Billion)
Source: Debt Management Office.
Note: 2023H1 is at end-June.
Holdings of Nigeria’s external debt indicates that
Multilateral, Commercial and Bilateral loans
accounted for 48.2 per cent, 36.2 per cent and
12.8 per cent, respectively, while ‘other’ loans9
constituted 2.9 per cent.

8 Composed of Treasury Bonds (0.11 per cent), Green Bonds (0.03
per cent) and FGN Savings Bond (0.06 per cent)
9 Promissory Notes

2022H1
2022H2
2023H1
Local Currecy Denominated Debt
Foreign Currecy Denominated Debt


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Figure 3.3.9.: Composition of Domestic Debt Stock
in Per cent
Source: Debt Management Office.

Figure 3.3.10: Composition of External Debt Stock
in Per cent

Source: Debt Management Office.

Debt Service
The consolidated debt service payment of the
Federal Government in the first half of 2023 was
N1,997.65 billion, compared with N1,809.56
billion in the corresponding half of 2022. Of the
total interest payment in the period, 72.1 per cent
or N1,440.01 billion went to domestic creditors,
while 27.9 per cent or N557.64 billion was paid to
external creditors. With regards to the solvency of
the FGN, debt service accounted for 63.9 per cent
of FGN retained revenue in the first half of 2023.
This compares with the DMO’s self-imposed debtservice-revenue threshold of 50.0 per cent, and
the ratio of 54.2 per cent in the first half of 2022.


10 These arise from state governments’ contractual obligations, including
their contribution to external debt service fund, payments for fertilizer,
Figure 3.3.11: Breakdown of Total Debt Service
(N Billion)

Source: Debt Management Office.
Note: 2023H1 is at end-June.

3.3.4
Sub-National Government Finances
State Governments and the FCT
Revenue
The revenue of state governments increased in the
first half of 2023, relative to the first half of 2022;
driven, majorly, by improvements in receipts from
Exchange Gain and VAT. At N1,767.26 billion state
governments’ gross statutory allocation increased
by N258.58 billion or 17.1 per cent, relative to the
level in the first half of 2022. The increase was
due, largely, to considerable improvement in
Exchange Gain, and VAT receipts, on account of
the depreciation of the naira, increased
consumption of VAT-able goods, broadening of
the tax-net, and curbing of revenue leakages.
Subsisting liabilities of N348.03 billion 10 was
deducted from states’ Federation Account
receipts, leaving a net balance of N1,419.23
billion for distribution to the states. This
exceeded the distribution in the corresponding
period of 2022 by N187.79 billion or 15.2 per cent.
The sources of states’ statutory revenue include:
Federation Account, N923.20 billion (52.2%); VAT
Pool Account, N673.69 billion (38.1%); Non-oil
Excess N94.44 billion (5.3%); and Exchange Gain,
N75.93 billion (4.3%).


State Including Agricultural Project, National Fadama Project and the
National Agricultural Technology Support Programme.

2022H 1
2022H 2
2023H 1
External
Domestic
FGN Bonds
86.9%
Treasury Bills
9.8%
Promisory
Notes
1.6%
FGN Sukuk
1.5%Others
0.2%
Multilateral
48.2%
Commercial
36.2%
Bilateral
12.8%
Others
2.9%

This document is for CBN internal consumption
This document is for CBN internal consumption
Figure 3.3.12: Composition of State Governments and FCT’s
Revenue First Half 2023 in Per cent

Source: Federal Ministry of Finance, Budget and National Planning
(FMFB&NP), Office of the Accountant General of the Federation
(OAGF) and Staff Estimates.


Table 3.3.9: Subnational Government Revenue (N Billion)

Half Year 2022
Half Year 2023
Half Year
Benchmark
State Governments
1,255.39
1,513.80
1,918.6
13% Derivation
253.30
253.47
610.01

State
Allocation
(N’Billion)
% of Total
Top 3
Lagos
142.11
8.0
Delta
123.13
7.0
Rivers
95.16
5.4
Bottom 3
Ekiti
33.27
1.9
Kwara
33.02
1.9
Nasarawa
32.85
1.9
Source: Federal Ministry of Finance, Budget and National Planning
(FMFB&NP), Office of the Accountant General of the Federation
(OAGF) and Staff Estimates.

Local Government Finances
Aggregate
revenue
of
local
governments
improved in the first half of 2023, on the back of
higher VAT collection. The 774 Local governments
received N1,115.39 billion from the Federation
Account in the first half of 2023. This was 20.5
and 1.7 per cent higher than the levels in the first
and second halves of 2022, respectively. It was,
however, 21.9 per cent below target.
Gross allocation to Local governments comprised
receipts from the Federation Account, N535.65
billion (48.0%); VAT, N417.31 billion (42.3%); Nonoil Excess revenue, N68.94 billion (6.2%); and
Exchange Gain, N39.23 billion (3.5%).


Table 3.3.10: Subnational Government Revenue (N Billion)

2022H1
2022H2
2023H1
Budget
State Govt.

Local Govt.

Derivation

Source: Staff compilation from Federal Ministry of Finance, Budget
and National Planning (FMFB&NP) and Office of the Accountant
General of the Federation (OAGF).

Local governments in Lagos, Kano and Katsina
states received the highest allocations in the
period at N90.69 billion (8.1%), N61.15 billion
(5.5%), and N44.57 billion (4.0%); while Ebonyi,
Gombe and Bayelsa states ranked least receiving
1.6, 1.4 and 1.1 per cent of the total allocation to
the 774 local governments, respectively.

Table 3.3.11 Subnational Government Revenue
Performance by State

Local

Allocation
(N’Billion)

% of
Total


2022H1
2022H2
2023H1

Top 3
Lagos


Kano


Oyo
37.67
44.81
-


Katsina

Bottom 3
Ebonyi


Gombe


Bayelsa

Source: Staff compilation from Federal Ministry of Finance, Budget
and National Planning (FMFB&NP) and Office of the Accountant
General of the Federation (OAGF).

Figure 3.3.13: Composition of Statutory Allocations to Local
Governments, First Half 2023 in Per cent
Source: Federal Ministry of Finance, Budget and National Planning
(FMFB&NP) and Office of the Accountant General of the Federation
(OAGF).
Federation
Acct
52.2%
VAT
38.1%
Excess
Non-Oil
5.3%
Exchange
Gain
4.3%
Federation
Account
48.0%
VAT
42.3%
Non-Oil
Excess
6.2%
Exchange
Gain
3.5%

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
3.4 FINANCIAL DEVELOPMENTS
3.4.1 Monetary and Credit Developments
The Bank sustained its hawkish policy stance in a
bid to tame inflationary pressure in the first half of
2023. Key policies, such as the adoption of marketdetermined exchange rate and the securitisation
of Ways and Means Advances, influenced the
trajectory and structure of key monetary
aggregates.

Reserve Money
Reserve money rose by 8.2 per cent to ₦17,339.25
billion, driven, wholly by growth in liabilities to
Other Depository Corporations (ODCs). Liabilities
to Other Depository Corporations grew by 13.2
per cent, relative to the 30.6 and 6.4 per cent
growth at end-December 2022 and end-June
2022, respectively. The increase in liabilities to
ODCs was attributed to 18.9 per cent growth in
required reserves, reflecting increased deposits,
arising from improved financial services.
Currency-in-circulation
(CIC),
however,
contracted by 13.6 per cent, compared with a
decline of 9.4 per cent and 2.1 per cent at endDecember 2022 and end-June 2022, respectively,
thus constituting a drag on reserve money. The
development was due to the Bank’s efforts aimed
at deepening the adoption of the eNaira and
electronic transaction channels.
Table 3.4.1: Reserve Money (N’ Billion)

Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
Reserve
Money

Currency
in
Circulation

Notes and
Coins

eNaira

Liabilities
to ODCs

Source: Central Bank of Nigeria.
Figure 3.4.1: Reserve Money

Source: Central Bank of Nigeria.

Further disaggregation of CIC revealed that the
value of notes and coins declined by 13.7 per cent
to ₦2,596.11 billion at end-June 2023, while
eNaira transactions increased by 180.8 per cent to
₦7.16 billion.

Figure 3.4.2: Composition of Currency-in-Circulation
(N Billion)
Source: Central Bank of Nigeria.

Jun-21
Dec-21
Jun-22
Dec-22
Jun-23
CIC

LODCs

RM

N'Billion
CIC
LODCs
RM

Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
N' Billion
N'Billion
Naira & Coins (LHS)
eNaira (RHS)

This document is for CBN internal consumption
This document is for CBN internal consumption

Broad Money Supply
Broad money (M3) grew significantly above its
provisional benchmark, driven, largely, by the
increase in net foreign assets (NFA) following the
adoption of a market- determined exchange rate
in June 2023. NFA grew significantly by 59.6 per
cent to ₦11,112.80 billion against the contraction
of 25.6 and 34.7 per cent recorded at endDecember 2022 and end-June 2022, respectively.
Notably, the NFA maintained a downward
trajectory until May 2023 before it started rising
in June 2023, due to the revaluation effect of the
assets, following the Bank’s decision to switch to
a market-determined exchange rate. This was
reflected in the 51.8 per cent growth in claims on
non-residents, propelled by the increase in the
value of the official reserve assets and other
foreign assets of the Bank, as well as the increase
in foreign currency deposits of ODCs.
Net domestic assets (NDA) also grew by 18.9 per
cent to ₦53,818.46 billion in June 2023, relative
to 28.9 and 21.9 per cent at end-December 2022
and end-June 2022, respectively. The increase in
NDA was, driven by the 31.2 per cent growth in
domestic claims which was prompted by the 39.8
and 26.6 per cent rise in net claims on the central
government and claims on other sectors,
respectively.
The composition of the monetary authority’s
claims on the central government changed
significantly in line with the securitisation of the
Ways and Means Advances, which took effect in
June 2023. Consequently, claims in the form of
securities and shares increased by 987.1 per cent,
compared with the growth of 22.8 per cent at
end-December 2022, but contrasted with the
decrease of 4.6 per cent in the corresponding
period of 2022. Claims in the form of loans to the
central government declined by 60.78 per cent, in
contrast to the increase of 34.4 and 25.6 per cent
at end-December 2022 and end-June 2022,
respectively.
Claims on other sectors increased owing to the
26.9, 4.6 and 31.5 per cent growth in claims on
other financial corporations, claims on public
nonfinancial corporations and claims on private
sector, respectively.
The combined growth in NFA and NDA,
culminated in the 24.4 per cent increase in broad
money (M3) to ₦64,906.93 billion, relative to the
17.4 and 10.0 per cent growth at end-December
2022 and end-June 2022, respectively. On an
annualised basis, M3 grew by 48.8 per cent, 20.6
percentage points above the 2023 provisional
benchmark of 28.21 per cent.
On the liability side, the major drivers of the
growth
in
broad
money
liabilities
were
transferable deposits and other deposits, which

Box 3
Currency Operations
The Bank issued currency totaling ₦2,405.34
billion during the review period. This
represented an increase of 331.0 and 236.37
per cent, relative to the first and second
halves of 2022, respectively. The eNaira
accounted for less than half a per cent of the
currency issued, with banknotes accounting
for over 99.0 per cent.

Period
Bank Note
(N Billion)
eNaira
(N Billion)
Total
(N Billion)
Jan – Jun 2022
557.61
0.48
558.09
Jul – Dec 2022
713.51
1.55
715.09
Jan – Jun 2023
2,400.48
4.86
2,405.34

The Forensic Currency Laboratory of the Bank
has secured approval to commence in-house
counterfeit
notes
adjudication
and
examination
using
state-of-the-art
technology to enhance quality and integrity
of the currency.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
grew by 22.2 and 28.5 per cent, respectively,
compared with the 20.3 and 17.6 per cent at endDecember 2022 and 16.5 per cent and 8.2 per
cent at end-June 2022. Specifically, the 71.3 per
cent growth in other deposits was propelled by
the increase in foreign currency deposits,
following the adoption of a market-determined
exchange rate. Currency outside depository
corporations, however, constituted a drag on the
growth of monetary liabilities as it declined by
11.9 per cent, thus, sustaining its downward trend
since December 2022.
Table 3.3.12: Growth in Monetary Assets and
Liabilities

Drivers of Growth in Monetary Assets
NFA contributed 8.0 percentage points to the
growth in broad money supply, in contrast to the
negative
5.4
percentage
points
and
7.3
percentage points, respectively, at end-December
2022 and end-June 2022. NDA contributed 16.4
percentage points to the growth in money supply,
relative to contributions of 22.8 percentage points
at end-December 2022 and 17.3 percentage
points at end-June 2022.
Domestic claims contributed the most to growth
in broad money supply at 38.3 percentage points,
which was higher than the 34.5 percentage points
and
19.6
percentage points
contributions
recorded in the preceding half and the
corresponding period of 2022, respectively. A
further disaggregation shows that net claims on
central government and claims on other sectors
both recorded higher contributions of 17.0
percentage points and 21.3 percentage points,
respectively.
Drivers of Growth in Monetary Liabilities
Other deposits contributed the most to growth in
monetary liabilities at 16.9 percentage points,
relative to 10.5 percentage points and 4.9
percentage points at end-December 2022 and
end-June 2022, respectively. This was followed by
transferable deposits, which contributed 7.7
percentage points, compared with 6.9 percentage
points and 5.7 percentage points at endDecember 2022 and end-June 2022, respectively.
Currency
outside
depository
corporations
constituted a drag to growth in monetary
liabilities, as it recorded a negative contribution of
0.6 percentage point in the review period,
compared with negative 0.8 percentage point and
negative 0.5 percentage point at end-December
2022 and end-June 2022, respectively.

3.4.2
Consumer Credit
The value of consumer credit extended by ODCs to
economic agents expanded relative to the level in
the preceding half. Consumer credit improved
despite the increase in lending rates. The
development was due to increased demand for
personal loans and strengthened enforcement of
the
loan-to-deposit
ratio
(LDR)
policy.
Consequently, consumer credit outstanding rose
by 13.7 per cent to N2,637.32 billion in the review
period, compared with N2,318.63 billion and

Jun 21
Dec 21
Jun 22
Dec 22
Jun 23
NFA

DC

Net claims on
Government

Claims on


Other Sectors

Other financial
corporations

(1.89)

(5.34)

2.91

(11.69)

26.86
State and local
government

Public
nonfinancial
corporations

Private sector

Broad money
Liabilities

1.56

14.24

10.02

17.44

24.39
Currency outside
depository
corporations

(9.91)

17.74

(7.46)

(12.57)

(11.91)
Transferable
deposits

Other deposits

Securities other
than shares


Source: Central Bank of Nigeria

This document is for CBN internal consumption
This document is for CBN internal consumption
N1,933.18 billion in the preceding half and
corresponding period of 2022, respectively.
Consumer credit accounted for 7.0 per cent of
total credit to the various sectors of the economy
by the ODCs, compared with 7.9 and 7.2 per cent
in the preceding half and corresponding period of
2022, respectively.
Figure 3.4.3: Consumer Credit and its Share of Total Sectoral
Credit

Source: Central Bank of Nigeria.

Credit Utilisation by Sectors
The Bank's numerous intervention initiatives, LDR
policy implementation and the revaluation of
foreign credit to critical sectors led to a significant
increase in sectoral credit allocation to critical
sectors of the economy. Total sectoral credit
utilisation stood at ₦37,479.37 billion at end-June
2023, representing an increase of 27.3 and 39.6
per cent, respectively, relative to the ₦29,445.87
billion and ₦26,846.40 billion recorded at endDecember 2022 and end-June 2022. Of the total
sectoral credit utilised, services sector sustained
its dominance, as it accounted for the largest
share of 51.6 per cent, relative to 52.8 and 54.5
per cent at end-December 2022 and end-June
2022, respectively. The share of industry sector
increased by 2.5 percentage points to 43.5 per
cent, relative to 41.0 and 39.4 per cent recorded
at end-December 2022 and end-June 2022,
respectively. The share of credit to agriculture
declined by 1.3 percentage points to 4.9 per cent,
compared with 6.2 and 6.1 per cent in the
preceding half year and corresponding period,
respectively.

Table 3.4.1: Sectoral Credit Allocation in Per cent

Jun-22
Dec-22
Jun-23
Agriculture
6.1
6.2
4.9
Industry
39.4
41.0
43.5
of which Construction
4.4
4.0
4.0
Services
54.5
52.8
51.6
of which Trade/General
Commerce
7.1
7.5
7.7
Source: Central Bank of Nigeria.

Maturity structure of Banks Claims’ and Liabilities
Short-term deposits of less than one-year
maturity accounted for 90.2 per cent, relative to
4.5 and 5.3 per cent for medium-term and longterm deposits, respectively. Short-term deposits
rose by 0.4 and 0.2 percentage points, relative to
its share of 89.8 and 90.0 per cent at endDecember 2022 and the corresponding period of
2022, respectively. The preference for short-term
deposits over longer-term deposits has continued
to grow despite the increase in deposit rates for
medium- to long-term. This was, driven by
uncertainties around inflation expectations.

Figure 3.4.4: Maturity Structure of Bank by Deposits in

Per cent

Source: Central Bank of Nigeria.

The structure of banks’ loans exhibited a similar
trend as deposits. Credit with maximum maturity
of one year formed the bulk of banks’ loan
portfolio, accounting for 51.0 per cent of the total

Jun. 21Dec-21 Jun-22 Dec-22 Jun-23
Per cent
₦' Billion
Toatl Cosumer Credit
Share of Total Sectoral Credit (RHS)

Jun. 20 Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23
Per cent (%)
Short-term
Medium-term
Long-term

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
loans, relative to 14.0 and 35.0 per cent for bank
credit with medium-term and long-term tenors,
respectively. At 51.0 per cent, short-term credit
declined by 7.1 percentage points, relative to the
58.1 and 55.1 per cent recorded in the preceding
and corresponding halves, respectively. Although,
short-term
credit
trended
downward,
it
continued to be dominant in the loan portfolio of
banks due to the need to match short-term
liabilities and uncertainty in the business
environment.

Figure 3.4.5: Distribution of Bank Loans and Advances by
Maturity in Per cent

Source: Central Bank of Nigeria.


Market Structure of the Banking Industry
The market structure of the banking industry
recorded marginal improvement. There was slight
tapering in the concentration ratio of the five
largest banks in terms of deposits and assets,
relative to the preceding period of 2022. The
concentration of the five largest banks in terms of
deposits moderated by 4.5 percentage points to
64.10 per cent, compared with the 68.60 per cent
concentration ratio in the preceding half of 2022.
Similarly, in terms of assets, the concentration of
the five largest banks declined by 6.32 percentage
points to 62.68 per cent over 69.00 per cent in
December 2022. The shares of individual banks in
total deposits and assets ranged from 0.13 per
cent to 15.20 per cent and 0.44 per cent to 17.55
per cent, respectively.

Figure 3.4.6: Market Concentration Ratios of Banks (Assets
and Deposits)

Source: Central Bank of Nigeria.

The structure of the banking system remained
competitive as the Herfindahl-Hirschman Indices
(HHI) of 973.70 in deposits, and 981.80 in assets
(on a scale of 100 to 10,000) remained below
1,000, signifying the existence of competition in
the banking system. Nonetheless, the HHI
position for both deposits and assets increased
relative to the corresponding half-year position of
954.53 and 933.89, respectively.
3.4.3
Financial Soundness Indicators
Nigeria’s financial sector remained resilient, as key
financial soundness indicators were within
regulatory benchmarks. At end-June 2023, the
industry Capital Adequacy Ratio (CAR) fell to 11.2
per cent, from 13.8 and 14.1 per cent at endDecember 2022 and end-June 2022, respectively.
The development was attributed to the reforms in
the foreign exchange market, resulting in the
revaluation of foreign exchange denominated risk
assets. Consequently, the risk-weighted assets of
banks increased, which more than offset the rise
in their total qualifying capital. The ratio,
however,
remained
above
the
minimum
regulatory benchmark of 10.0 per cent.

Per cent (%)
Short-term
Medium-term
Long-term

Dec-20 Jun-21 Dec-21 Jun-22 Dec-22 Jun-23
CR 6 (Deposits)
CR 6 (Assets)
CR (Largest Deposits)
CR (Largest Assets)

This document is for CBN internal consumption
This document is for CBN internal consumption
Analysis of bank asset quality measured by the
ratio of non-performing loans (NPLs) to gross
loans stood at 4.1 per cent at end-June 2023,
relative to 4.2 per cent at end-December 2022,
and 5.0 per cent at end-June 2022. The NPL ratio
was within the 5.0 per cent prudential
requirement.
Banking industry Liquidity Ratio (LR) rose by 9.2
percentage points to 62.2 per cent, compared
with 53.0 per cent at end-December 2022. The
rise in LR reflected an increase in the stock of
liquid assets held by banks, particularly,
government securities. Liquidity ratio remained
above the regulatory benchmark of 30.0 per cent.
3.4.4
Developments in Other Financial
Institutions
The Bank sustained its regulation and supervision
of Other Financial Institutions (OFIs) in the review
period to support stability of the financial system
and enhance inclusive growth. To further broaden
the reach of the OFIs segment, 13 new OFIs,
comprising 11 MFBs and two FCs, were granted
operating licences. In addition, following the
revocation of operating licenses of 186 OFIs
consisting of four Primary Mortgage Banks
(PMBs), three Finance Companies (FCs) and 179
Microfinance Banks (MFBs), the total number of
OFIs stood at 6,536 at end-June 2023, relative to
6,709 and 6,699 at end-December 2022 and endJune 2022, respectively.
A further analysis showed that there were a total
of 712 MFBs in operation as at end-June 2023,
comprising 9 National, 123 State, and 580 Unit
MFBs, compared with 880 MFBs and 875 MFBs at
end-December

and
end-June
2022,
respectively. The change in the number of MFBs
relative to the level in the second half of 2022 was
due to the licencing of 11 new MFBs and the
revocation of 179 MFBs.
The FCs in operation at end-June 2023 were 110,
compared with 111 at end-December 2022 and
106 at end-June 2022. The change was, due to the
licensing of two FCs in the first half of 2023, while
the licences of three FCs were revoked in the
review period.
The number of operating PMBs decreased to 32
(10 national PMBs and 22 state PMBs) at end-June
2023 from 34 at end-December 2022. The
decrease was as a result of the revocation of
operating licences of four PMBs at end-December
2022.
The number of Bureaux-de-Change (BDC) and
DFIs remained at 5,675 and seven (7),
respectively, as there was no newly licenced
institution during the review period.
An analysis of the OFIs financial position showed
that, total assets excluding the Bureaux-deChanges (BDCs), was N6,377.01 billion at endJune 2023. This was 2.2 and 12.9 per cent above
the N6,240.55 billion and N5,646.65 billion, at
end-December

and
end-June
2022,
respectively. The increase in total assets was
attributed, largely, to increases in shareholders’
funds, deposit liabilities, borrowings and ‘due to
other banks’.
Table 3.4.2: Breakdown of Other Financial Institutions
S/N
Type
Total No. of institutions as at


end-Jun-

end-Dec-

end-Jun-23

Microfinance
Banks:


Unit

State

National

Bureaux
De
Change
5,613
5,675
5,675

Finance
Companies

Development
Finance
Institutions

Primary
Mortgage
Banks:


State

National

Total
6,697
6,707
6,536
Source: Central Bank of Nigeria


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Table 3.4.3: Other Financial Institutions Consolidated
Financial Position
Source: Central Bank of Nigeria

Net loans and advances, at N3,237.21 billion, was
2.9 and 7.1 per cent above its levels at endDecember 2022 and end-June 2022, respectively.
Similarly, placements increased by 14.0 per cent
to N942.07 billion, compared with the N810.48
billion at end-December 2022. Investments at
N1,477.39 billion at end-June 2023 fell by 4.6 per
cent from the N1,550.32 billion recorded at endDecember 2022.
Total Deposit liabilities, at N1,296.85 billion in the
first half of 2023, was 0.6 and 9.3 per cent above
the levels at end-December 2022 and end-June
2022, respectively. Borrowings amounted to
N3,155.76 billion at end-June 2023, indicating an
increase of 25.5 and 48.5 per cent, compared with
the levels at end-December 2022 and end-June
2022, respectively. Share capital of N663.07
billion at end-June 2023, was 34.0 per cent and
33.1 per cent higher than the levels at endDecember 2023 and end-June 2022, respectively.
Similarly, reserves increased by 27.1 and 33.2 per
cent to N313.91 billion at end-June 2023, relative
to its levels at end-December 2022 and end-June
2022, respectively.
Furthermore, “due to other banks” increased by
194.5 and 17.2 per cent to N185.06 billion at endJune 2023, relative to its levels at end-December

and
end-June
2022,
respectively.
Shareholders’ fund amounted to N976.98 billion,
an increase of 31.7 and 33.1 per cent relative to
its levels at end-December 2022 and end-June
2022, respectively. The increase in shareholders’
fund was due to fresh capital injections and
accretion to reserves.
A disaggregation of the total capital, at N6,377.01
billion, showed that the DFIs, MFBs, PMBs and FCs
accounted for 61.4, 22.9, 8.2 and 7.5 per cent of
the total, respectively.

3.4.5
Development Finance Institutions
The consolidated financial position of the
Development Finance Institutions (DFIs) improved
owing to additional capital injection to enhance
their functions. At end-June 2023, the total assets
of the DFIs was N3,916.78 billion, an increase of
3.8 and 17.5 per cent above the levels at endDecember 2022 and end-June 2022, respectively.
The rise was, majorly, due to increase in
placements, net loans and advances, investment,
fixed assets, and “Other assets”. The increased
asset was financed through accretion to reserves,
increased borrowings, shareholders’ fund, paidup capital, deposits, and long-term liabilities.

ASSETS
JUN. 2022
DEC. 2022
JUN. 2023

N'000
N'000
N'000
Cash & Bank
Balances
263,824,378
295,309,667
240,441,610
Placements
708,544,239
810,478,588
942,068,762
Investments
1,231,449,913
1,548,315,206
1,477,387,519
Net Loans &
Advances
3,023,609,148
3,147,517,943
3,237,205,058
Other Assets
249,145,506
262,036,336
287,868,142
Fixed Assets
170,071,913
176,894,192
192,039,524
Total Assets
5,646,645,097
6,240,551,932
6,377,010,615
Financed By:


Share Capital
498,230,745
494,913,592
663,072,057
Reserves
235,691,426
246,951,059
313,904,949
Shareholders'
fund
733,922,171
741,864,651
976,977,006
Deposits
Liabilities
1,186,557,994
1,289,653,202
1,296,852,513
Borrowings
2,125,758,380
2,513,660,735
3,155,758,751
Due to Other
Banks
157,941,082
62,849,814
185,060,971
Other
Liabilities
920,530,197
758,322,662
53,587,339
Long-term
Liabilities
521,935,273
874,200,868
708,774,035
Total Capital &
Liabilities
5,646,645,097
6,240,551,932
6,377,010,615

This document is for CBN internal consumption
This document is for CBN internal consumption
Furthermore, analysis of the total assets by
institution indicated that, the Bank of Industry
(BOI), Federal Mortgage Bank of Nigeria (FMBN),
Development Bank of Nigeria (DBN), Nigerian
Export-Import Bank (NEXIM), Nigeria Mortgage
Refinance Company (NMRC), Bank of Agriculture
(BOA) and The Infrastructure Bank (TIB)
accounted for 62.6, 13.9, 13.2, 6.9, 2.2, 1.1 and
0.1 per cent, respectively. The BOI, DBN, FMBN,
NEXIM, NMRC and BOA accounted for 54.3, 19.3,
17.2, 7.3, 1.4 and 0.5 per cent, of the total net
loans and advances, respectively.
Table 3.4.4: Consolidated Balance Sheet of DFIs for the first
half of 2023
Source: Central Bank of Nigeria.


Microfinance Banks
Assets of MFBs decreased, following the
revocation of the licences of some MFBs. Total
assets of the MFBs decreased by 3.4 per cent to
N1,461.14 billion at end-June 2023, from
N1,512.09
billion
at
end-December
2022.
However, it was higher than the level at the
corresponding period of 2022 by 3.7 per cent or
N1,408.58 billion. The asset gap was financed,
mainly by increase in ‘takings from other banks’
and share holders’ funds.
Table 3.4.5: Balance Sheet of MFBs for the First Half of 2023

JUN. 2022
DEC. 2022
JUN. 2023

N'000
N'000
N'000
Cash
32,744,108
7,937,795
9,398,478
Balances with
Banks
151,276,444
186,842,538
152,549,820
Placements
127,669,383
140,433,293
171,013,148
Short term
Investments
32,033,882
24,783,957
24,239,757
Long Term
Investments
7,381,753
13,556,832
10,197,623
Net Loans and
Advances
955,227,381
1,031,013,635
985,397,083
Other Assets
66,799,279
75,975,326
79,070,436
Fixed Assets
35,449,116
31,551,291
29,270,403
TOTAL ASSETS
1,408,581,346
1,512,094,667
1,461,136,748


FINANCED BY


Paid-up Capital
119,260,260
117,280,901
134,651,505
Reserves
54,573,548
65,017,456
53,404,528
Shareholders'
Fund
173,833,808
182,298,357
188,056,033
Deposits
453,989,534
507,633,134
466,886,509
Takings from
Other Banks
133,925,243
36,453,326
161,986,359
Long Term
Loans/On-lending
390,356,047
605,040,843
575,617,373
Other Liabilities
256,476,714
180,669,007
68,590,474
TOTAL LIABILITIES
1,408,581,346
1,512,094,667
1,461,136,748
Source: Central Bank of Nigeria.

Finance Companies
Total assets of FCs increased, due largely to
increases in net loans and advances, placements,
investment, fixed assets and other assets. The
total assets rose to N475.62 billion at end-June
2023, indicating an increase of 14.1 and 26.0 per
cent, compared with N416.90 billion and N377.47
billion at end-December 2022 and end-June 2022,
respectively.
Table 3.4.6: Consolidated Balance Sheet of FCs for first half
of 2023


ASSETS
Jun. 2022
Dec. 2022
Jun. 2023

N'000
N'000
N'000
Cash
2,233,223
2,197,848
1,537,155
Balances with Banks
27,670,496
28,208,361
30,366,762
Placements
37,021,246
49,617,287
56,525,436
Investments
12,756,583
14,384,508
19,107,701
Net Loans and Advances
181,798,627
204,412,724
245,861,463
Other Assets
66,198,625
70,243,528
70,514,713
Fixed Assets
49,792,007
47,839,606
51,706,663
TOTAL
377,470,807
416,903,862
475,619,893
FINANCED BY:


Paid-up Capital
29,404,116
26,524,245
28,991,984
Reserves
17,780,420
12,039,063
1,617,782
Shareholders' Funds
47,184,536
38,563,308
30,609,766
Long Term Liabilities
1,940,146
3,473,686
3,607,465
Total Borrowings
239,037,832
254,348,165
300,685,047
Other Liabilities
89,308,293
120,518,703
140,717,615
TOTAL
377,470,807
416,903,862
475,619,893
Source: Central Bank of Nigeria.
ASSETS
JUN. 2022
DEC. 2022
JUN. 2023

N'000
N'000
N'000
Cash & Bank
Balances
22,002,218
45,347,441
15,979,261
Placements
466,507,297
540,251,875
634,344,315
Investments
1,121,464,031
1,437,983,251
1,373,293,546
Net Loans &
Advances
1,598,617,094
1,614,042,034
1,723,426,155
Other Assets
60,525,133
60,134,815
80,012,589
Fixed Assets
64,943,907
76,724,014
89,722,409
Total Assets
3,334,059,680
3,774,483,430
3,916,778,275
Financed By:


Paid-up Capital
238,780,740
238,868,169
398,244,480
Reserves
232,891,187
246,934,588
318,201,961
Shareholders'
fund
471,671,927
485,802,757
716,446,441
Deposits
558,363,855
600,086,698
646,656,845
Borrowings
1,886,720,548
2,259,312,570
2,855,073,704
Due to Other
Banks
2,927,389
1,467,273
1,232,985
Other Liabilities
371,031,896
372,581,982
-353,769,363
Long-term
Liabilities
43,344,065
55,232,150
51,137,663
Total Capital &
Liabilities
3,334,059,680
3,774,483,430
3,916,778,275

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
Primary Mortgage Banks
The total assets of PMBs decreased due mainly to
the revocation of the operating licences of two
PMBs. Total assets of PMBs, at N523.48 billion,
reflected a decrease of 2.5 and 0.6 per cent below
the N537.07 billion and N526.53 billion at endDecember 2022 and end-June 2022, respectively.
The development was due, mainly, to the
decreases in net loans and advances, and
investments. Net loans and advances at N282.52
billion at end-June 2023, decreased by 5.2 and 1.9
per cent from the N298.05 billion and N287.97
billion at end-December 2022 and end-June 2022,
respectively. Investments at N37.14 billion,
decreased by 25.5 and 20.4 per cent below the
levels at end-December 2022 and end-June 2022,
respectively.

Table 3.4.7: Consolidated Balance Sheet of PMBs for the
first half of 2023

ASSETS
JUN. 2022
DEC. 2022
JUN. 2023

N'000
N'000
N'000
Cash
1,670,226
942,406
2,635,867
Cash Reserve
Requirement
2,590,795
2,372,286
2,365,231
Balances with
Banks
23,636,868
21,460,992
25,609,036
Placement with
banks
77,346,313
80,176,133
80,185,863
Investments/Noncurrent Assets Held
for Sale
46,623,126
49,817,888
37,135,056
Short Term
Investments
4,388,071
822,347
7,007,616
Investment in
Quoted Shares
6,802,467
6,966,423
6,406,220
Net Loans and
Advances
287,966,046
298,049,550
282,520,357
Other Assets
55,622,469
55,682,667
58,270,404
Fixed Assets
19,886,883
20,779,281
21,340,049
TOTAL
526,533,264
537,069,973
523,475,699
FINANCED BY:


Paid-up Capital
110,785,629
112,240,277
101,184,088
Reserves
-69,553,729
-77,040,048
-59,319,322
Shareholders'
Funds
41,231,900
35,200,229
41,864,766
Deposits
174,204,605
181,933,370
183,309,159
Due to
Banks/Others
21,088,450
24,929,215
21,841,627
Long-term
Loans/NHF
86,295,015
84,552,970
78,411,534
Other Liabilities
203,713,294
210,454,189
198,048,613
TOTAL
526,533,264
537,069,973
523,475,699
Source: Central Bank of Nigeria.


Examination of Other Financial Institutions
The Bank conducted Target and Anti-Money
Laundering,
Combating
the
Financing
of
Terrorism, and combating Proliferation Financing
(AML/CFT/CPF) examinations on 910 BDCs, and
Risk-Based Supervision (RBS) and AML/CFT
examination of 100 MFBs. The objective was to
ascertain compliance with the extant Money
laundering (ML) and Terrorism Financing Acts and
other
applicable
regulations.
The
Money
Laundering,
Terrorism
Financing,
and
Proliferation
Financing
(ML/FT/PF)
risk
examination of the OFIs was assessed in line with
the extant money laundering and terrorism Acts
that were enacted in 2022 and the newly
gazetted CBN AML/CFT/CPF Regulations 2022.
The examination revealed various infractions
from the extant regulations and the erring
institutions were penalized in line with the extant
CBN AML/CFT/CPF (Administrative Sanctions)
Regulations of 2018.
Furthermore, target examination of 116 OFIs,
comprising, 2 PMBs, 17 FCs and 97 MFBs was
conducted in the review period. The examination
focused on risk asset portfolio, corporate
governance and adequacy of regulatory capital.
Out of the 17 FCs, 11 were examined, four had
closed shop, while two were undergoing
restructuring. Of the 11 FCs examined, 10 were
required to inject additional capital. The target
examination of the 97 MFBs revealed that 69

This document is for CBN internal consumption
This document is for CBN internal consumption
MFBs were solvent, while 28 MFBs required
additional capital.
3.4.6
Financial Markets
Interest Rate Developments
Interest rates movements, generally, reflected
the hawkish policy stance of the Bank. The
banking system witnessed ample liquidity on the
back of the combined effect of currency
recirculation, exchange rate reforms, improved
FAAC payments and maturities of government
securities.
In the interbank market, the movements of rates
were generally mixed. The average interbank call
rate (IBCR) gained 0.20 percentage point, while
average open-buy-back rate (OBB) shed 0.67
percentage point to close the review period at
12.41 and 12.42 per cent, respectively, compared
with the levels in the preceding half of 2022.

Table 3.4.8: End-Period Money Market Rates

IBCR
OBB
NIBORCALL
NIBOR-

MPR
2021 H1

2021 H2

2022 H1

2022 H2

2023 HI

Jan

Feb

Mar

April

May

June

Source: Central Bank of Nigeria
Note: IBCR-Interbank Call Rate, NIBOR- Nigeria Inter-Bank Offered
Rate, OBB – Open Buy Back, MPR- Monetary Policy Rate


The average NIBOR-call rate declined to 10.04 per
cent from 11.89 per cent in the preceding half of
2022. These developments were in tandem with
the liquidity conditions in the market following the
Bank’s implementation of the CRR policy,
interventions in the foreign exchange market,
FAAC distributions, among others.


Deposit and Lending Rates
The average lending rates remained elevated,
following the hawkish monetary policy stance of
the Bank. The average prime and maximum
lending rates rose to 13.9 and 28.4 per cent in the
first half of 2023, compared with 12.8 and 28.3
per cent in the second half of 2022, respectively.
In
comparison
with
the
levels
in
the
corresponding period of 2022, the average prime
and maximum lending rates rose by 2.0
percentage points and 0.4 percentage point,
respectively.

Table 3.4.9: DMBs Deposit and Lending Rates in Per cent
Source: Central Bank of Nigeria.

The average term deposit rate increased to 7.0
per cent in the first half of 2023 compared with
6.2 per cent in the second half of 2022.
Consequently, in first half of 2023, the spread
between the average term deposit and maximum
lending rates narrowed to 21.4 percentage points
in the review period compared with 22.1 and 24.6
percentage
points
in
the
preceding
and
corresponding halves of 2022, respectively.

Open Market Operations
Transactions in Open Market Operations (OMO)
increased during the review period. Total CBN
bills offered, subscribed to, and allotted at the
OMO was ₦9,518.83 billion apiece, compared
with ₦6,559.63 billion and ₦7,333.01 billion in
the preceding and corresponding halves of 2022.
The higher amount of OMO bills was in tandem
with the Bank’s contractionary monetary policy
stance.
Month
Savi
ngs
Rate
Term
Deposit
Rate
Prime
Lendin
g Rate
Max.
Lendin
g Rate
Spread
(Percentage
points)


(2) & (4)
Jan-23

Feb-23

Mar-23

Apr-23

May-23

Jun-23

2023 H1

2022 H2

2022 H1


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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This document is for CBN internal consumption
Figure 3.4.7: OMO Offer and Sales, (N Billion)
Source: Central Bank of Nigeria.

Tenored Repurchase Transactions (Repos)
There were no transactions in tenored repo, as
against ₦6,285.26 billion and ₦4,998.12 billion in
the first and second halves of 2022, respectively,
reflecting liquidity conditions in the market.

Discount Window Operations
CBN Standing Facilities
Transaction at the standing facilities window
showed growth in the deposit placements arising
from the increased average net liquidity to
₦792.88 billion in the first half of 2023 from
₦330.04 billion in the preceding half of 2022.
The average daily SDF amount of ₦26.84 billion
was recorded in 120 transaction days, at
applicable rates ranging from 10.5 per cent to
11.50 per cent in the first half of 2023. This
compared with ₦9.81 billion in 123 transaction
days at applicable rates, which ranged from 7.0
per cent to 9.5 per cent in the preceding half of
2022.
Consequently, the average interest payments on
deposits increased to ₦0.90 billion in the first half
of 2023 from ₦0.31 billion in the preceding half of
2022. On the other hand, average daily request
for SLF (comprising only ILF Conversion) stood at
₦91.69 billion in 103 transaction days, compared
with ₦76.08 billion (outright SLF and ILF) in 121
transaction days in the preceding half of 2022,
with average daily interest of ₦0.10 billion
charged relative to ₦0.61 billion in the preceding
half of 2022.
Interbank Market Transactions
Secured
transactions
dominated
inter-bank
market
transactions,
albeit
with
recorded
increases
in
unsecured
placements.
The
aggregate value of transactions at the OBB,
interbank call and interbank tenored segments
declined in the review period to ₦23,807.16
billion, from ₦24,915.0 billion and ₦25,408.36
billion in the preceding and corresponding
periods, respectively.
Average transactions at the OBB segment in the
review period stood at ₦193.61 billion lower than
₦198.25 billion and ₦200.56 billion in the
preceding and corresponding periods. At the
interbank (call and tenored) segments, average
transactions in the review period stood at ₦10.07
billion, marginally lower than ₦10.31 billion in the
preceding period, but higher than ₦4.86 billion in
the
corresponding
period.
Specifically,
transactions at the OBB segment accounted for
the bulk of interbank transactions at 97.6 per
cent, while the interbank call and tenored
transactions accounted for the remaining 2.4 per
cent. There was a significant increase in interbank
call and tenored transactions in the review period,
indicating
improved
confidence
among
counterparties in the interbank market.
Figure 3.4.8 Value of Interbank Funds Market Transactions,
(N’ Billion)

Source: Central Bank of Nigeria.

10000
H1 2021 H2 2021 H1 2022 H2 2022 H1 2023
Total Offer (₦’Billion)
Total Sales (₦’Billion)


H1 2021 H2 2021 H1 2022 H2 2022 H1 2023
₦'Billion
Aggregate Inter-bank Transactions

This document is for CBN internal consumption
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Figure 3.4.9: Share of Interbank Funds Market Transactions,
(N’ Billion)


Source: Central Bank of Nigeria.

Primary Market Activities
The total sales of Nigerian Treasury Bills (NTBs)
increased, compared with the level recorded in
2022, due, mainly, to the Federal Government’s
strategy to maximise domestic borrowings, amid
rising global interest rates. The total value of NTBs
offered and allotted was ₦2,599.91 billion apiece,
indicating an increase of 13.06 per cent and 7.6
per cent, above ₦2,260.28 billion and ₦2,415.58
billion, respectively, in the preceding and
corresponding periods of 2022. The total public
subscription stood at ₦9,502.78 billion, compared
with ₦4,450.28 billion and ₦4,663.18 billion in
the preceding and corresponding halves of 2022,
respectively. Public subscription was higher due
to the sustained appetite for risk-free instruments
and prevailing liquidity conditions.

Figure 3.4.10: NTB Offer, Subscriptions, and Allotments
Source: Central Bank of Nigeria.
Structure of Allotment of Nigeria Treasury Bills
The structure of allotment of the NTBs indicated
that deposit money banks, including foreign
investors, took up ₦1,999.10 billion or 76.9 per
cent. Mandate and internal funds stood at
₦319.32 billion or 12.3 per cent and merchant
banks accounted for the balance of ₦281.49
billion or 10.8 per cent. The stop rates ranged
between 0.10 and 6.00 per cent for the 91-day,
0.30 and 8.00 per cent for the 182-day and 4.00
and 6.49 per cent for the 364-day.

Figure 3.4.11: Nigerian Treasury Bills Outstanding: Class
of Holders in Per cent
Source: Central Bank of Nigeria.

The total value of NTBs outstanding at end-June
2023 stood at ₦4,722.72 billion, compared with
₦4,422.72 billion, at end-December 2022
indicating an increase of 4.84 per cent.

Figure 3.4.12: Nigerian Treasury Bills Outstanding

Source: Central Bank of Nigeria

H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
₦'Billion
Total InterBank Call + Interbank Tenored ...
Total OBB (₦’Billion)

H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
Offer (₦'Billion)
Subscription (₦'Billion)
Allotment (₦'Billion)
Mandate
and Internal
Funds, 27%
Deposit
Money
Banks, 43%
Merchant
Banks, 1%
Parastatals,
29%
Mandate and Internal Funds
Commercial Banks

H1 2021H2 2021H1 2022H2 2022H1 2023
N Billion

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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Over-the-Counter Transactions in Treasury Bills
and FGN Bonds
There was a decrease in Over-the-Counter (OTC)
transactions for NTBs, in contrast to transactions
in FGN Bonds, which recorded an increase. OTC
transactions for NTBs amounted to ₦17,465.16
billion, indicating a decrease of 31.02 per cent
below ₦25,318.10 billion recorded in the
preceding half of 2022. OTC transactions in FGN
Bonds amounted to ₦10,310.64 billion, indicating
an increase of 88.73 per cent above ₦5,463.28
billion recorded in the preceding half of 2022. The
mixed development in the OTC markets was
attributed, primarily to preference by investors
for long-tenored bond instruments with higher
market rates to the NTBs.

Federal Republic of Nigeria Treasury Bonds
Federal Republic of Nigeria Treasury Bonds
(FRNTBs)
worth
₦50.99
billion
remained
outstanding at end-June 2023, same at endDecember 2022. A breakdown of the amount
outstanding indicated that the CBN held ₦3.12
billion or 6.1 per cent, while ₦47.87 billion or 93.9
per cent was held in the Sinking Fund. There were
no new issues of FRNTBs in the first half of 2023.

Federal Government of Nigeria (FGN) Bonds
Total amount of FGN Bonds offered to the public
in the review period was ₦2,160.00 billion, while
public subscription and allotment stood at
₦4,163.94
billion
and
₦3,567.42
billion,
respectively. In the latter half of 2022, FGN Bonds
issuance, subscription and allotment were
₦1,350.00
billion,
₦1,631.21
billion,
and
₦1,195.18 billion, respectively. The increased
subscription was attributed to the conduct of
twenty-four (24) auctions in the first half of 2023
against eighteen (18) in the preceding half,
coupled with attractive yields and the prevailing
liquidity conditions. The subsisting restriction
placed on non-banking institutions and individuals
from purchasing OMO bills also sustained
activities in the bond market. The total value of
FGN Bonds outstanding at end-June 2023 stood at
₦41,972.73 billion, compared with ₦16,421.56
billion at end-December 2022, indicating an
increase of 155.6 per cent. The significant rise was
a reflection of the Federal Government’s approval
to restructure the “Ways and Means Advances” to
FGN Bonds.

Figure 3.4.13: FGN Bonds Auctions

Source: Central Bank of Nigeria.

Federal Government of Nigeria Savings Bonds
In the first half of 2023, FGN Savings Bonds worth
₦6.28 billion was offered and allotted, compared
with ₦9.13 billion at end-December 2022. The
decline was attributed to investors’ preference
for longer tenored instruments. The new issues
were 2- and 3-year tenors with coupon rates
ranging from 9.47 per cent to 10.39 per cent and
10.47 per cent to 11.39 per cent, respectively. The
coupon rates in the preceding half ranged from
8.08 per cent to 12.49 per cent for the 2-year
tenor, and 9.08 per cent to 13.49 per cent for the
3-year tenor. Consequently, the total value of
FGN Savings bonds outstanding at end-June 2023
was ₦30.70 billion, compared with ₦27.51 billion
at end-December 2022.
Federal Government of Nigeria Green Bonds
There was no issuance of FGN Green bonds in the
review period. Thus, the outstanding stock of the

H1 2021 H2 2021 H1 2022 H2 2022 H1 2023
Offer (₦'Billion)
Subscription (₦'Billion)
Allotment (₦'Billion)

This document is for CBN internal consumption
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Green bond remain unchanged at ₦15.00 billion
at end-June 2023.
Federal Government of Nigeria Sukuk
During the review period, there was no issuance
of FGN Sukuk. Thus, FGN Sukuk outstanding at
end-June 2023 remained at ₦742.56 billion. In the
preceding half of 2022, a 10-year FGN Sukuk of
₦130.00 billion was issued and allotted with the
rental rate of 15.64 per cent payable semiannually.
Federal Government of Nigeria Promissory Note
FGN Promissory Notes valued at ₦304.17 billion
were issued in the review period. The outstanding
stock of the Notes at end-June 2023 stood at
₦780.04 billion, representing an increase of 47.2
per cent, compared with ₦530.03 billion at endDecember 2022. The increase was attributed to
the payment of incentives to exporters under the
Export Expansion Grant (EEG) scheme.

Table 3.4.10: Outstanding Debt Instruments
Instrument
Outstanding
Outstanding
2022H2
2023H1
(N’ billion)
(N’ billion)
NTBs
4,504.8
4,722.72
FGN Bonds
16,421.56
41,972.73
Treasury Bonds
50.99
50.99
Savings Bonds
27.51
30.7
FGN Sukuk
742.56
742.56
FGN Green Bonds

Promissory Notes
530.03
780.04
Source: Central Bank of Nigeria
3.4.7
Developments in the Capital Market
Institutional Development
In the first half of 2023, the Securities and
Exchange Commission (SEC), continued its
regulatory activities to protect investors, market
operators, and ensure market integrity. Thus, the
Commission performed the following regulatory
functions and activities:
• Blacklisted six unregulated online trading
platforms, which included, Prime Invest,
FXBoxed, New Finance LLC, Axi24, Evolve
Consulting LLC, and Trust Fund-Mining Global
Pty Ltd.;
• Accepted applications for its Regulatory
Incubation (RI) program for FinTech firms
operating or seeking to operate in the Nigerian
Capital Market; and
• Cautioned
the
investing
public
against
investment on the Binance platform for
crypto-assets.

The Nigerian Exchange Limited (NGX) sustained its
transparency initiatives, aimed at enhancing
market integrity and protecting investors by
providing compliance-related information to all
listed companies. The NGX accomplished the
following during the review period:
• Instituted the Digital and Technology Products
Advisory
Panel,
aimed
at
engendering
interaction with the capital market community
and the fintech ecosystem to enhance and
increase
the
Exchange
digital
product
offerings; and

• Listed the Africa Infra Plus Fund (AIPF I), which
is the first Carbon+ fund in Nigeria, amounting
to N20.50 billion, closed-end infrastructure
fund.
Secondary Market Activities
Activities on the Nigerian capital market was
bullish in the first half of 2023, as the All-Share
Index (ASI) and aggregate market capitalisation
appreciated, despite uncertainties in the global
and domestic economies. The performance was
on account of better-than-expected 2023Q1,
corporate
earnings
declaration,
corporate
initiatives in digital technology & climate
products, dividend reinvestments, anticipation of
favourable 2023H1 corporate earnings in the
wake of reforms in the energy sector and the

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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foreign exchange market. Also, appreciation in
the banking services stocks, consumer goods,
telecommunication and oil/gas stocks also
contributed to the improved performance.
Furthermore, there were 34 new listings on the
Exchange in 2023H1, compared with 26 and 31
listings in the second and first halves of 2022,
respectively.
The Exchange recorded a significant surge in the
aggregate volume and value of traded securities
at end-June 2023. The aggregate volume of
transactions and value of traded shares increased
by 165.2 and 117.3 per cent to 66.23 billion shares
and N727.86 billion, respectively, in 596,360
deals, compared with the 24.97 billion shares and
N334.97 billion in 489,793 deals recorded at endDecember 2022. Activities on the Exchange was
slower in the review period, compared with the
corresponding half of 2022.
Figure 3.4.14: Volume and Value of Equities Traded on the
NGX

Sources: Staffs’ computation using data from Securities and
Exchange Commission (SEC).


The equities segment maintained its dominance in
the capital market, accounting for 99.9, 99.8 and
99.7 per cent of the aggregate volume, value of
transactions and number of deals, respectively;
while the debt and Exchange Traded Fund (ETF)
components accounted for the balance.
Sectoral analysis of the equities segment of the
market showed that the financial services sector,
measured by volume of transactions, remained
the most active sector on the Exchange. The
segment accounted for 34.27 billion shares or
51.8 per cent, valued at N337.12 billion or 46.5
per cent, in 289,623 deals or 48.7 per cent of the
total equities’ transactions at end-June 2023.
Figure 3.4.15: Changes in Volume, Value & Number of Deals
of Equities Traded on the NGX

Sources: Staffs’ computation using data from SEC.


In the review period, rising global interest rate and
appreciation of the US dollar triggered capital
flight.
Consequently,
domestic
investors
outperformed the foreign ones, relative to the
preceding and corresponding halves of 2022. The
levels of domestic and foreign investors’
participation were 88.7 and 11.3 per cent,
respectively, compared with 77.1 and 22.9 per
cent in the preceding half year. Relative to the
levels in the corresponding half of 2022, the
domestic and foreign investors’ participation
stood at 85.4 and 14.6 per cent, respectively.


First half 2022
Second Half 2022
First Half 2023
Value(N' billion)
Volume (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)

Volume
Value
Deals
Changes (%)
Relative to Preceding Period
Relative to Corresponding Period

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Figure 3.4.16: Domestic and Foreign Investors Participation
in the Equities Market.


Sources: Staffs’ computation using data from SEC.

NGX All-Share Index
The NGX All-Share Index (ASI) improved on
account of price appreciation in the banking
services, consumer goods, telecommunication
and oil/gas stocks, as well as reforms in the energy
sector and the foreign exchange market. The NGX
All-Share Index closed at 60,968.27 index points
at end-June 2023, reflecting an increase of 19.0
and 17.7 per cent, relative to the 51,251.06 and
51,817.59 recorded at end-December 2022 and
end-June 2022, respectively.

A bullish run was recorded across all the sectoral
indices monitored in the review period, as all the
indices appreciated, compared with the levels at
end of the second and first halves of 2022, with
the exception of NGX-Sovereign bond index,
which depreciated, while NGX-ASeM remained
flat.


Figure 3.4.17: Percentage Changes of Sectoral Indices at
end-June 2023.
Sources: Staffs’ computation using data from SEC.

Market Capitalisation
The aggregate market capitalisation appreciated,
due to strong corporate earnings in 2023Q1,
reforms in the energy sector and the foreign
exchange market, among others. The aggregate
market capitalisation of the 311 listed securities
closed at N59,920.00 billion, indicating an
appreciation of 17.0 and 19.4 per cent, relative to
the levels in the second and first halves of 2022,
respectively. The development was, due to
appreciation in the value of securities in all the
segments of the market (equities, debts, and
ETFs).
Similarly, the market capitalisation of the 156
listed equities grew by 18.7 and 18.9 per cent to
N33,203.45 billion at end-June 2023, compared
with the levels at end-December 2022 and endJune 2022, respectively. The listed equities


First Half 2023
Second Half 2022
First Half 2022
Participation (%)
Domestic Portfolio Investment
Foreign Portfolio Investment

NGX-Main Board Index
NGX-30 Index
NGX-CG Index
NGX-Premium Index
NGX-Banking Index
NGX-Pension Index
NGX-Insurance Index
NGX-ASeM Index
NGX-AFR Bank Value Index
NGX-AFR Div. Yield Index
NGX-MERI Growth Index
NGX-MERI Value Index
NGX-Consumer Goods Index
NGX-Oil/Gas Index
NGX-Lotus II
NGX-Industrial Goods Index
NGX-Growth Index
NGX-Sovereign Bond Index
Changes (%)
Preceding changes
corresponding changes


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Half Year Economic Report, 2023

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accounted for 55.4 per cent of the aggregate
market capitalisation, while the debt and ETF
components accounted for 44.6 and 0.02 per
cent, respectively.
The top ten capitalised companies on the
Exchange accounted for N25,619.29 billion or
77.2 per cent of the total equity market
capitalisation and 42.8 per cent of the aggregate
market capitalisation. Two banks made the top
ten list, accounting for N2,105.42 billion or 6.3 per
cent of the total equity market capitalisation.
Total market capitalisation, as a percentage of
nominal GDP, stood at 15.0 per cent at end-June
2023, relative to 14.1 and 14.0 per cent at endDecember 2022 and end-June 2022, respectively.
The Warren Buffet Index11, measured by the ratio
of the value of traded stocks to GDP was between
one and two standard deviation of the historical
trend line, implying that the stock market was
slightly overvalued. The ratio remained the same
as the level at end-December 2022, but was lower
by 0.1 percentage point, compared with the 0.8
per cent at end-June 2022.
Figure 3.4.18: All-Share Index and Aggregate Market
Capitalisation

Sources: Staffs’ computation using data from SEC.


11 Warren Buffet Index decision, if absolute difference between the actual and historical
average:
a. are within 1 standard deviation above or below the trend line, indicates slight over or
undervaluation;
b.
between 1 and 2 standard deviations above or below the trend line, indicate moderate over
or undervaluation; and .
Primary Market Activities
Activities in the primary segment of the Nigerian
capital market improved in the first half of 2023.
There were 34 new security issuances worth
N3,829.74 billion, compared with 26 and 31
valued at N1,505.20 billion and N2,090.20 billion,
in the preceding and corresponding halves of
2022, respectively. During the review period,
there was no initial public offering (IPO), public
offering, and equity rights issues. There were,
however, two private placements worth N6.40
billion, compared with no private placements in
the preceding period and corresponding periods.
In the government segment of the primary
market, 24 FGN Bonds worth N3,567.42 billion
were
issued
and
allotted
by
the
Debt
Management Office (DMO), compared with 18
worth N1,227.47 billion and 15 worth N1,555.70
billion in the preceding and corresponding halves
of 2022. Eight corporate bonds valued at N255.92
billion compared with 16 valued at N267.73
billion, 10 valued at N410.40 billion, in the
preceding and corresponding halves of 2022.

Figure 3.4.19: Value of New Issues by Sector

Source: Securities and Exchange Commission (SEC)/Nigerian Stock
Exchange (NSE)

c. 2+ standard deviations above or below the trend line, indicate severe over or
undervaluation.


First Half-22
Second Half-

First Half-23
Naira (billion)
Index
All-Share Index (LHS)
Market Capitalisation (RHS)
93%
7%
FGN Bonds
Corporate Bonds
Sub-national Bonds
Equities

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Institutional Savings
Aggregate financial savings rose by 28.6 per cent
to N40,841.63 billion over N31,868.76 billion at
end-December 2022, and increased by 42.7 per
cent over the N28,617.06 billion at end-June
2022. The ratio of financial savings to GDP rose to
18.5 per cent over 16.0 and 14.4 per cent at the
end of the second and first halves of 2022,
respectively. This was driven, largely, by robust
corporate earnings. Further analysis on financial
savings
showed
that,
banks
(commercial,
merchant, and non-interest banks) remained the
dominant depository institutions in the financial
system. Thus, accounting for 95.3 per cent of total
financial savings, compared with 95.2 and 93.7
per cent in the preceding and corresponding
halves of 2022, respectively. Other institutions,
comprising,
primary
mortgage
banks,
microfinance banks, life insurance companies,
pension fund custodians and the Nigeria Social
Insurance Trust Fund (NSITF), accounted for the
balance of 4.8 per cent.

3.4.8
Developments in Financial System
Stability and Macroprudential Policy
In the review period, associated risks and
vulnerabilities to financial system stability were
contained using macroprudential policies.

Solvency Stress Tests and Liquidity Simulations
Stress test conducted revealed that the banking
industry remained resilient under mild-tomoderate scenarios of sustained economic and
financial conditions. Though there was a slight
moderation in the banking industry’s resilience at
end-June 2023, relative to the levels at endDecember 2022, the CAR and NPL, were within
industry regulatory benchmarks, while LR, at
44.38 per cent, was above the threshold. The
baseline CAR, LR and NPL ratios in the review
period were 11.23, 44.38 and 4.14 per cent,
respectively. Return on Asset (ROA) and Return on
Equity (ROE) stood at 2.3 and 32.2 per cent,
respectively. The industry, however, could be
vulnerable under severe scenarios of sustained
economic and financial stress.

Table 3.4.11: Banking Industry Baseline Selected Key
Indicators for First Half of 2023

CAR (%)
LR (%)
NPLs (%)
ROA
(%)
ROE
(%)
Jun 2023

Dec 2022

Jun 2022

Percentage
Point(s)
Change

Benchmarks
10.0 - 15.0

-
-
Source: Central Bank of Nigeria.

Figure 3.4.20: Banking Industry CAR in Per cent

Source: Central Bank of Nigeria.

Credit Risk Shocks
The impact of general credit risk shock of 10.0,
15.0, 20.0, 30.0, 50.0 and 100 per cent in NPLs
could result in a deterioration of banking industry
CAR to 10.92, 10.76, 10.61, 10.29, 9.66, and 8.04
per cent, respectively, from the baseline position
of 11.22 per cent in the review period.


14.93 14.83 15.46
14.11 13.76
11.23

Dec-20
Jun-21
Dec-21
Jun-22
Dec-22
Jun-23

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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Table 3.4.12: Credit Default Shocks on Banking Industry CAR
in Per cent
Single Factor Shocks
End-Dec 2022
End-June 2023
Baseline CAR
13.76
11.23
Post-Shock CAR
10% NPLs increase
13.44
10.92
15% NPLs increase
13.28
10.76
20% NPLs increase
13.12
10.61
30% NPLs increase
12.81
10.29
50% NPLs increase
12.16
9.66
100% NPLs increase
10.51
8.04
Source: Central Bank of Nigeria.

Similarly, the banking industry’s resilience was
demonstrated by the obligor credit concentration
stress test as CAR remained above the minimum
regulatory benchmark of 10.0 per cent under all
the three scenarios.

Table 3.4.13: Credit Concentration Risk on Banking Industry
CAR in Per cent

Dec-22
Jun-23
Baseline CAR
13.76
11.23
Single Factor Credit Concentration Shocks


Scenario 1
13.43
10.68
Five largest corporate credit facilities shifted
from pass-through to sub-standard (10%)
Scenario 2
12.09
9.86
Five largest corporate credit facilities shifted
from sub-standard to doubtful (50%)
Scenario 3
10.36
8.45
Five largest corporate credit facilities shifted
from doubtful to lost (100%)
Source: Central Bank of Nigeria.

Figure 3.4.21: Credit Concentration Risk for First Half 2023
In Per cent

Source: Central Bank of Nigeria.

Sector Credit Concentration Risk
In the review period, analysis of the banking
industry’s total credit by sector indicated that: Oil
and Gas; Manufacturing; General; Government;
General Commerce; and Finance & Insurance
accounted for 25.8, 18.4, 8.3, 6.4, 8.0, and 7.6 per
cent, respectively, while “others” constituted 25.5
per cent.

Figure 3.4.22: Sectoral Concentration of Credit in Per cent

Source: Central Bank of Nigeria.

The result of the stress test of the sector credit
concentration indicated that the banking industry
could absorb a shock up to 20.00 per cent in
exposure to oil and gas, with post shock CAR
dropping to 10.38 per cent, from an initial 11.23
per cent. A shock of 50.0 per cent exposure to oil
and gas sector, could, however, lead to
vulnerability of 5.66 per cent in the banking
industry.

Table 3.4.14: Stress Test on Oil and Gas Exposures for First
Half 2023

Industry CAR (%)
Baseline CAR
11.23
20% Default on total exposure to
Oil and Gas
10.38
50% Default on total exposure to
Oil and Gas
5.7
Source: Central Bank of Nigeria.


BASELINE
SCENARIO 1 (10%) SCENARIO 2: CREDIT
FACILITIES SHIFTED
FROM DOUBTFUL
TO LOST (50%)
SCENARIO 3: CREDIT
FACILITIES SHIFTED
FROM DOUBTFUL
TO LOST (100%)
Jun-23
Dec-22
Oil &Gas,
25.78%
Manufact
uring,
18.38%
Government
, 6.43%
General,
8.32%
Gen
Comm,
7.99%
Fin & Ins,
7.61%
Others,
25.49%

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Interest Rate Risk
Rising interest rates, the war in Ukraine and
structural issues continue to generate spillover
effects globally, posing significant challenges to
countries, including Nigeria. The continued rise in
inflation rate and the ensuing contractionary
policy stance has implications on the cost of credit
and fixed income assets. Although banks tend to
gain from higher net income, they suffer losses as
loan origination declines and default rates rise.
The net effect would determine the potential
impact on banking industry health and the
appropriate
use
of
microprudential
and
macroprudential tools.
In view of the above, interest rate stress testing
was conducted to assess the impact of mild,
moderate and severe scenarios on banks’ CAR
and LR. The results showed that the banks could
withstand a shock of 20.0 per cent loss in value of
banks holding of FGN bonds under Fair-Valuethrough Profit/Loss (FVTPL) and Fair-ValueThrough Other Comprehensive Income (FVTOCI),
as the industry’s post-shock CAR and LR remained
above the regulatory thresholds of 10.0 per cent
and 30 per cent, respectively.
Figure 3.4.23: Impact of Rise in Interest on CAR via FGN
Securities (FVTPL & FVTOCI) Holding of Banks
Source: Central Bank of Nigeria.


Figure 3.4.24: Impact of Rise in Interest on LR via FGN
Securities (FVTPL & FVTOCI) Holding of Banks

Source: Central Bank of Nigeria.


Table 3.4.15: Liquidity Stress Test Results (Post-Shock)

No of Banks with
LR < 30%

Industry LR (%)

Dec-22
Jun-23
Dec-22
Shortfall to
30% LR
threshold
Jun-23
Shortfall
to 30% LR
threshold
(N’ billion)
(N’ billion)
Day 1


Day 2


Day 3


Day 4


Day 5


Day 30


Source: Central Bank of Nigeria

Liquidity Stress Test
In the first half of 2023, Implied Cash Flow Analysis
(ICFA) and Maturity Mismatch/Rollover Risk
methods were used in liquidity stress tests to
determine the resilience of individual banks and
the banking industry to funding and liquidity
shocks.
The outcome of the stress test showed that after
a one-day run scenario, the liquidity ratio for the
industry declined from 48.38 per cent baseline
position to 36.06 per cent. Similarly, under the 5day and 30-day scenarios, the liquidity ratio for
the industry declined to 15.80 per cent and 9.40
per cent, indicating a liquidity position shortfall of
N4.20 trillion and N5.58 trillion, respectively.


Baseline/Current
Actual Position
Scneario 1: 10% Fall
in Value
Scneario 2: 15% Fall
in Value
Scneario 3: 20% Fall
in Value

Baseline/Current
Actual Position
Scneario 1: 10% Fall
in Value
Scneario 2: 15% Fall
in Value
Scneario 3: 20% Fall
in Value

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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Figure 3.4.25: Industry Liquidity Ratios at Periods 1-5 and
cumulative 30-day Shocks
Source: Central Bank of Nigeria.

Maturity Mismatch
The industry’s baseline assets and liabilities
maturity profile at end-June 2023, showed that
the shorter end of the market (≤90-day bucket)
was adequately funded, showing an excess of
N18,997.06 billion assets over liabilities.

Table 3.4.16: Maturity Profile of Assets and Liabilities at
end-June 2023 (Billion Naira)
Bucket
Liabilities
Assets
Mismatch
Cumulative
Mismatch
≤30 days

days

days

days

1-3 years

>3 years

Total
65,815.69
71,979.39


Source: Central Bank of Nigeria.

The System-wide Maturity Mismatch Analysis
(Test 2A) revealed that the banking industry was
adequately funded, except for above 3-years
bucket. Under Static Rollover Risk Analysis (Test
2B) and Dynamic Rollover risk (Test 2C), the
industry had mismatches of N11,172.34 billion
and N13,345.06 billion, respectively. These
reflected increases of N3,793.17 billion and
N3,186.55 billion, relative to end-June 2022 tests,
under the Test 2B and Test 2C, respectively.
Table 3.4.17: Test Results for System-wide Maturity
Mismatch at end-June 2023

Test 2A
Test 2B
Test 2C
Descriptive Maturity
Mismatch.
Static Rollover risk
Analysis.
Dynamic Rollover risk test.
(No consideration of
rollover)
(No possibility to close
liquidity gaps in other
buckets)
(Free assets used to close
liquidity gaps in other
buckets)

N’ billion
No of
banks with
mismatch
N’ billion
No of
banks with
mismatch
N’ billion
No of
banks with
mismatch
≤30
days
27,601.65

17,657.02

688.32

31-90
days
7,706.92

-1,701.67

-1,290.11

91180days
6,009.96

-2,525.48

-1,307.00

181365days
2,919.59

-5,878.09

-1,132.31

1-3
Years
3,756.61

-5,308.97

-1,828.53

Above 3
years
-5,219.96

-13,415.16

-8,475.43

Total
42,774.77

-11,127.34
-13,345.06
Source: Central Bank of Nigeria.

Contagion Risk Analysis
The contagion risk analysis, using inter-bank
placements and takings, depicted a decline in
interconnectedness. The total exposure increased
by 134.71 per cent to ₦1,228.92 billion,
compared with the end-December 2022 position.
Further analysis revealed that 12 out of 23 banks
accounted for ₦1,108.94 billion of total
placements, while another six banks accounted
for ₦874.43 billion of total takings. The exposures
did not pose any significant threat to financial
system
stability,
as
all
placements
were
collateralised.


Pre -Shock
After Day 1
After Day 2
After Day 3
After Day 4
After Day 5 After cum day

Dec-22
Jun-23

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Figure 3.4.26: Network Analysis based on Interbank
Exposures


Source: Central Bank of Nigeria.


Credit Risk Management System
The
implementation
of
the
Credit
Risk
Management System (CRMS) 12 continued to
strengthen credit administration in Nigeria. The
CBN CRMS database continued to serve as a
viable source of credit information in the Nigerian
banking industry. The number of credit facilities
on the CRMS database increased by 13.3 per cent
to 49,060,977 at end-June 2023 over the
43,320,180 recorded at end-December 2022, due
to increased credit by banks. The number of
credit/facilities reported on the CRMS database
comprised 47,918,185 individuals and 1,142,792
non-individuals.


12 The CRMS is a regulatory tool designed to capture credit records
and mitigate credit risk in the banking system
Table 3.4.18 Borrowers from the Banking Sector
(Commercial, Merchant and Non-Interest Banks)
Source: Central Bank of Nigeria
The total number of credit/facilities with
outstanding balances on the CRMS database
increased by 33.1 per cent to 12,744,856 at endJune 2023 from 9,579,073 at end-December
2022. This comprised 12,566,218 individuals and
178,638 non-individuals.

Private Credit Bureaux
The number of licensed credit bureaux remained
three (3) at end-June 2023, same as in the
preceding and corresponding period of 2022. The
average number of uniquely identified credit
records in the database of these three credit
bureaux at end-June 2023 stood at 56.87 million,
a decrease of 20.72 million, compared with 77.59
million at end-December 2022. The decrease was
attributed mainly to a reduced appetite for
borrowing in view of market uncertainties and
political changes.
Table 3.4.19: Credit Records in the Databases of the Bureaux at
end-June 2022
S/N
Component
CRC Credit
Bureau Ltd
CR Services
Credit
Bureau Plc
First
Central
Credit
Bureau Ltd

Number of
credit records
88,864,944
941,180
80,816,616

Value of
Credit
Facilities
(N’ Trillion)
50.35
44.13
40.76

Number of
borrowers
34,937,835
17,989,074
23,389,390

Number of
subscribers
1,793

1,564
Source: Central Bank of Nigeria.
Node colour representation
Blue
= Lenders,
Deep Blue= Net Placement
Red
= Borrowers
Purple= Net Takings
Description

End-Dec

End-Jun

Change
Change
(%)

* Total No. of
Credit/facilities
reported on
the CRMS:

Individuals

NonIndividuals

* Total No. of
Outstanding
Credit facilities
on the CRMS:

Individuals

NonIndividuals


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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However, the average number of subscribers in
the database of the credit bureaux increased to
1,365 at end-June, 2023, over 1,316 at endDecember, 2022. The annual onsite routine
examination of the three credit bureaux as at
December 31, 2022 commenced in June 2023.

3.4.9
Developments in Regulatory Compliance
& Consumer Protection

Financial Sector Surveillance
During the first half of 2023, the Bank sustained its
regulatory and supervisory oversight of the
institutions under its purview, towards promoting
a safe, stable, and sound financial system. This
was performed through offsite surveillance and
onsite examination, as well as the issuance of
relevant guidelines to banks and other financial
institutions.
Sequel to the commencement of the parallel run
of the Basel II and III Guidelines in November
2021, banks reported their CAR computation
using both the extant Basel II template and the
new Basel III template for concurrent review by
the CBN. Adjustments were made to the five (5)
Basel III CBN Reporting Templates based on the
feedback and gaps observed during the parallel
run.
Financial
Crimes
Surveillance/Anti-Money
Laundering/Combating the Financing of Terrorism
and
Countering
Proliferation
Financing
(AML/CFT/CPF)
Nigeria made some progress on most of the
Mutual Evaluation Report’s (MER) recommended
actions by Financial Action Task Force (FATF),
which included: improving its AML/CFT/CPF
legislative framework; updating its assessment of
inherent ML/TF/PF risks; and strengthening its
implementation of targeted financial sanctions. A
subsequent evaluation of the actions taken by
Nigeria was reviewed at the February 2023
meeting
of
Financial
Action
Task
Force
International Cooperation and Review Group
(FATF/ICRG). In that review, some outstanding
deficiencies were noted for consideration by the
Nigerian authorities, of which the activities to
implement FATF’s action plan on Nigeria were
ongoing.
To strengthen the existing AML/CFT/CPF regime,
the Bank undertook the following activities during
the first half of 2023:
•
Routine
Risk-Based
AML/CFT/CPF
Examination of 19 banks with “Above
Average” rating. The examination was
conducted to ensure that the banking system
and financial system were not used for
money laundering, terrorism financing and
the financing of proliferation of weapons of
mass destruction;
•
In-house AML/CFT/CPF training on: Politically
Exposed Persons (PEPs) spot check; PEPs
return appraisals; and AML/CFT/CPF RBS
cross border examination, among others.
Staff of the Bank also participated in training
outreach to banks and other financial
institutions. Similarly, in-house training for all
Examiners
on
issues
concerning
AML/CFT/CPF was conducted;
•
Target examination of Politically Exposed
Persons (PEPs) in June 2023 based on RiskBased Approach (RBA). The examination
focused on 15 banks with previous ratings of
Low or Moderate Effectiveness, four (4) new
banks and five (5) new Payment Service
Banks that have not been assessed before;
•
On-site
AML/CFT/CPF
cross-border
examinations
in
2023.
During
the

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examination, six Nigerian banks foreign
subsidiaries were visited, namely, FBN UK, GT
Bank UK, Zenith Bank UK, Access Bank South
Africa, UBA Liberia, and UBA Kenya in June
2023. The examinations were conducted to
assess the subsidiaries’ compliance with the
CBN AML/CFT/CPF regulations, 2022 in
regards to their host country AML/CFT/CPF
laws and regulations; and
•
Training
and
engagement
with
Chief
Compliance Officers of banks to remediate
one of the MER recommended actions that
required
supervisors
to
have
regular
stakeholders’ engagement. Members of the
Association of Chief Compliance Officers of
Banks in Nigeria (ACCOBIN) were trained on
issues of mutual concern and interest.
Compliance
with
the
Code
of
Corporate
Governance
Corporate Governance Compliance Scorecard
Assessment was conducted on eight (8) selected
banks using the risk-based approach (RBA), to
ascertain the level of compliance with the CBN
Code of Corporate Governance for Banks and
Discount Houses, 2014. The assessment was
based on the following pillars of corporate
governance: Board and Management; Ethics and
Professionalism; Treatment of Shareholders;
Rights of other Stakeholders; Disclosure; and
Transparency.
The result of the examination showed that all the
eight banks were rated “Acceptable”, and largely
compliant with the CBN Code of Corporate
Governance. The examination noted two (2)
significant observations that were not in
compliance with extant code of corporate
governance. First, two (2) banks failed to obtain
CBN approval for investors, who held above 5.0
per cent shareholdings, contrary to Section 3.2.1
of the Code, which required that “an equity
holding of 5 per cent and above by any investor
shall be subject to CBN’s prior approval”. Second,
two banks were also found to have failed to
engage External Auditors to review the banks’ Risk
Management Practices as required by the
provisions of Section 6.1.9 of the CBN Code that
“External Auditors shall render annually, reports
on the bank’s risk management practices to the
CBN”. Consequently, the four (4) banks were
sanctioned for the infractions.
Consumer Protection
In furtherance of its statutory responsibility to
promote confidence in the financial system, the
Bank sustained the implementation of measures
to ensure consumer protection, mainly in the form
of customer complaints management. The Bank
received 3,490 complaints from consumers of
financial services in the first half of 2023,
indicating an increase of 27.5 and 43.5 per cent
above the levels in second half of 2022 and the
corresponding half of 2022, respectively.

Figure 3.4.27: Complaints Received in the First Half of 2023
Source: Central Bank of Nigeria.

A total of 3,051 complaints, including those
outstanding from 2022, were resolved in the
review period, indicating 95.5 and 117.0 per cent
increases, compared with the 1,561 and 1,406
complaints resolved in the preceding and
corresponding periods of 2022, respectively.


1st Half, 2022
2nd Half, 2022
1st Half, 2023
Number Of Complaints

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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Figure 3.4.28: Complaints Resolved in the First Half of 2023
Source: Central Bank of Nigeria

In the review period, total claims in local and
foreign currencies amounted to N31.30 billion
and US$24,992.05, respectively, compared with
N1.90 billion and US$105,830.49 claimed in the
preceding period of 2022 and N8.1 billion and
US$11,283.93 in the corresponding period of
2022. There was an increase of 1,547.4 per cent
in local currency claims, in contrast to a decrease
of 76.4 per cent in foreign currency claims,
compared with the levels in the preceding period.

Figure 3.4.29a: Total Claims in the First half of 2023 (N)

Source: Central Bank of Nigeria
Figure 3.4.29b: Total Consumer Claims in the First Half
of 2023 (US$)

Source: Central Bank of Nigeria
The sums of N15.6 billion and US$25,246.52 were
refunded, compared with the N1.5 billion and
US$18,691.50 refunded in the second half of 2022
and N3.4 billion and US$31,580.41 refunded in
the first half of 2022. This indicated an increase of
4.7 and 35.0 per cent in local and foreign currency
refunded to consumers of financial services,
respectively, relative to the levels in the preceding
period.
Figure 3.4.30a: Total refunds in the First Half of 2023
(N’ Billion)

Source: Central Bank of Nigeria


N8.1
Billion
N1.9
Billion
N31.3
Billion
1st Half, 2022
2nd Half, 2022
1st Half, 2023
US$24,992.

US$105,830.49
US$11,283.93
N3.4
Billion
N1.5
Billion
N15.6
Billion
1st Half, 2022
2nd Half, 2022
1st Half, 2023
1,406
1,561
3,051


1st Half, 2022
2nd Half, 2022
1st Half, 2023
Number of Complaints

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Figure 3.4.30b: Total refunds in the First Half of 2023
(US$)

Source: Central Bank of Nigeria

The Consumer Complaints Management System
(CCMS) is a web-based solution designed to
enable
customers
monitor
the
status
of
complaints already logged with their respective
banks, as well as address the cumbersome nature
of the manual system of complaints management
in the banking industry.
The redesign of the CCMS was concluded in the
first half of 2023 to enhance its efficiency and
improve interface with the banking public,
through the public portal. The portal will provide
a platform for consumers of financial service to
escalate to the CBN complaints that were neither
resolved nor satisfactorily treated by their banks.
The Bank also reviewed the draft Framework for
Registration of Trademarks and Patent Rights of
the Bank's Proprietary Properties and the
Consumer Protection Framework (CPF).

Consumer Education Initiatives.
The CBN implemented the 2023 Global Money
Week (GMW) in collaboration with the Junior
Achievers
of
Nigeria
(JAN)
and
Bankers
Committee. The 11th edition of the GMW was held
20 – 26 March 2023 with the theme "Plan your
Money, Plant your Future". To commemorate the
event, the CBN, Bankers Committee, and other
stakeholders mentored over 600 secondary
school students across 8 schools selected from
the six geo-political zones of the country. The
students were educated on the importance of
savings, budgeting, investing etc. Other activities
covered included financial literacy rally with
children and youth, tour of the Nigerian Exchange
Limited (NGX) for the students, financial literacy
fair at the CBN Head Office and essay
competitions in selected schools.
Similarly, in April 2023, the Bank organised a
webinar with the theme, “Digital Financial
Services: the Way Forward” as part of the effort
to improve the level of financial literacy among
staff. The webinar focused on raising awareness
on the need to embrace Digital Financial Services
(DFS) and to mitigate against fraud and other
challenges inherent in the use of Digital Financial
Services.
The Bank continued with the implementation of
periodic nationwide media engagements to raise
awareness
on
the
Bank’s
consumer
protection/financial literacy initiatives, leveraging
on the Bank’s dedicated media channels (radio
stations,
social
media,
etc.).
The
media
engagement was to enlighten the public on the
SabiMONI financial literacy e-learning platform;
the Naira redesign policy; cash withdrawal limit;
e-Naira etc.
The SabiMONI e-Learning portal was launched on
15 May 2023. It was developed to improve the
financial literacy level among consumers of
financial products and services. This, in turn,
would facilitate the attainment of the target of
95.0 per cent financial inclusion rate by 2024 in
Nigeria. A total of 557 participants (401 Male and
156 Female) were on-boarded onto the platform
on the day of the launch. The focus was to
increase user adoption.
As part of its effortto conduct Monitoring and
Evaluation (M&E) of Consumer Protection
initiatives and upskill staff in the areas of M&E and
Consumer Research, the Bank commenced the
US$25,246.52
US$18,691.50
US$31,580.41

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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development of a Monitoring and Evaluation
framework
and
established
a
Consumer
Protection Embedded Laboratory in collaboration
with Innovation for Poverty Action (IPA). The
diagnostic phase of the project had been
concluded.
The Bank developed a USSD/SMS Short code to
serve as an avenue for consumers to: verify the
licensing status of financial institutions regulated
by the Bank; and access other financial
information services. The service was accessible
by MTN, Airtel and 9Mobile users via *959#, while
efforts were still ongoing towards connecting
other mobile network providers to the platform.

•
Nigeria Sustainable Banking Principles
The
Bank
continued
to
monitor
the
implementation of the Nigeria Sustainable
Banking Principles (NSBPs) at individual bank and
industry levels. In that regard, the Bank received
and reviewed semi-annual reports from banks for
the period ended December 2022, in line with the
reporting template issued to the industry via a
circular captioned “Reporting Template for the
Nigeria Sustainable Banking Principles”.
The review assessed progress made by banks in
the implementation of the NSBPs in line with the
requirements of the Guidance Note issued to the
industry in 2012. Subsequent to the review, banks
were advised to improve on areas of weakness to
further deepen the implementation of the NSBPs,
including the enhancement of environmental and
social
(E&S)
risk
management
practices,
deployment of measures to reduce carbon
footprints from operations, E&S assessment of
third-party vendors, building the capacity of
employees, among others.
Progress in compliance and implementation were
further assessed during routine Risk-Based
Supervision Examinations and onsite assessment
of E&S Implementation.
The NSBPs were being reviewed to reflect
emerging issues and global imperatives. The
review would also include aligning the Principles
with
Nigeria’s
Nationally
Determined
Contributions (NDCs) under the Paris Climate
Agreement.
The CBN continued to provide appropriate
intervention to help resolve the challenges
hindering the implementation, as well as offer an
objective, fair and equitable basis for possible
incentives.
The
Bank
attended
various
stakeholder
engagements
on
sustainable
banking
and
established an in-house Sustainability Steering
Committee to coordinate the implementation of
sustainability issues including the NSBPs.
•
Asset Management Corporation of
Nigeria
The annual Routine Examination of the Asset
Management Corporation of Nigeria as at 31
December 2022, held in the first quarter of 2023.
The examination focused on the review of the
Corporation’s operations from October 1, 2021,
to December 31, 2022 and the scope covered
corporate governance, strategic planning, loan
administration and management of Eligible Bank
Assets (EBA), enforcement processes and Assets
Under Management. Others were the financial
position, third party Service Providers, validation
of collaterals, compliance with the AMCON Act
2010 (as amended in 2015, 2019 and 2021), its
Operating Guidelines, other relevant extant laws
and regulatory directives.

From inception of its operations to June 30, 2023,
the Corporation has achieved a total recovery of
N1,801.00 billion, made up of cash recovery of

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N971.33 billion and other collections (property
sale, share sales, rental income, dividend income
and re-investment income) of N829.73 billion. In
the first half of 2023, the Corporation achieved
cash recoveries of N45.83 billion and other
collections of N15.16 billion.
The carrying value of AMCON’s liabilities
increased to N5,865.00 billion at end-June 2023,
over the N5,599.00 billion at end-December 2022
(unaudited) and N5,715.00 billion at end-June
2022, representing an increase of 4.6 and 2.6 per
cent, respectively. The carrying value of the
AMCON Note remained at N3,859.00 billion at
end-June 2023, while the sum of N500.00 billion
Loan plus accrued interest of N15.00 billion was
fully repaid by AMCON on January 31, 2023. The
AMCON Note is scheduled for redemption on
December 27, 2023. The Corporation’s total
assets net of impairment stood at N1,171.00
trillion at end-June 2023, compared with N989.89
billion
recorded
at
end-December

(unaudited) and N896.49 billion at end-June 2022,
representing an increase of 18.2 and 30.7 per
cent, respectively.
Contributions to the Banking Sector Resolution
Cost Fund (BSRCF) by the CBN and other
participating banks for the year 2023 amounted
to N417.00 billion. The collection is invested in
primary issuance of Nigeria Treasury Bills pending
utilisation by AMCON in meeting its obligations on
issued securities in line with Section 60E (1)(a) of
the AMCON amendment Act 2015.

3.5
PAYMENTS SYSTEM MANAGEMENT
The Bank under the Nigeria Payments System
Vision 2025 (PSV2025) continued to introduce
innovative measures to strengthen the payment
system landscape to further deepen digital
financial
inclusion
and
enhance
financial
intermediation to support inclusive growth.

3.5.1 Payments System Policies
The Bank continued to strengthen the payments
ecosystem with the introduction of two
innovative regulatory measures, namely, the
Operational Guidelines for Open Banking in
Nigeria and the Guidelines for Contactless
Payments in Nigeria. These innovations aimed at
guaranteeing the safety, and stability of the
payments infrastructure, while fostering an
environment that promotes interoperability.

Operational Guidelines for Open Banking in
Nigeria
Operational guidelines on open banking were
issued in March 2023, with the objective of
establishing the principles for data sharing across
the banking and payments ecosystem. It
stipulates data and Application Programming
Interface (API) access requirements, design, and
information security specifications between
banks and third-party financial service providers
(FSPs) with the customer's consent. The
guidelines provide an Open Banking Registry
(OBR) for regulatory oversight of participants to
enhance transparency in the operations of open
banking,
improve
accessibility
to
financial
services, promote innovation, and create new
opportunities for businesses and consumers.

Guidelines for Contactless Payments in Nigeria
The guidelines were issued in June 2023,
specifying minimum standards and requirements
for the operation of contactless payments, the
roles and responsibilities of stakeholders, and
sanctions/penalties.
Hence,
the
guidelines
require:
i.
A
maximum
transaction
limit
of
₦15,000.00
per
transaction
and
₦50,000.00 per day for contactless
payments without Personal Identification
Number (PIN) or biometric verification;

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

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ii.
All contactless devices to be connected to
an account or wallet that has a Bank
Verification Number (BVN);
iii.
Merchants to conduct proper Know Your
Customer (KYC) checks on all customers
who make contactless payments; and
iv.
That contactless readers are properly
configured and maintained.


Payments System Infrastructure
Enrolment and linkage of the existing accounts to
the Bank Verification Number (BVN) increased
against the backdrop of innovative payments
system infrastructure. At end-June 2023, the
number of bank customers enrolled on the BVN
platform was 57.99 million. This represented an
increase of 2.56 per cent over the 56.51 million
enrolled in the preceding half of 2022 and a 5.78
per cent rise from the 54.65 million enrolled in the
corresponding period. A total of 154.05 million
bank accounts were linked with BVN compared
with 127.91 million and 130.56 million in the
preceding and corresponding halves of 2022,
respectively. The total number of active bank
accounts in the banking industry rose to 182.01
million, above 159.42 million accounts in the
second half of 2022.

Furthermore, the number of BVN placed on
Watch-list for Fraudulent and Deceased, during
the first half of 2023 were 7,709 and 15,027
respectively,
underscoring
the
Bank's
commitment to ensuring vigilance and security
within the financial system.

Table 3.5.1: BVN Statistics

End-Jun.

End-Dec.

End-Jun.

BVN enrolment
54,651,086
56,513,499
57,990,304
Accounts linked with
BVN
130,569,656
127,916,574
154,053,756
Active Accounts
148,462,947
159,421,664
182,013,156
BVN on Watchlist
(Fraudulent)
6,047
7,353
7,709
BVN on Watchlist
(Deceased)
11,871
13,743
15,027
Source: Central Bank of Nigeria.

Payments System Strategy
The PSV2025 strategy remains the overarching
roadmap for the implementation of a nationally
utilised and internationally recognised payments
ecosystem in Nigeria. The PSV2025 strategy
document is an essential roadmap, strategically
designed to accommodate emerging initiatives
and innovations within the payments landscape.
The strategy provides a conducive environment
and offers enhanced momentum for the
introduction of novel products, innovative
business models, and increased participation
across the payment ecosystem.
Box 4
Contactless payment
Contactless payment refers to a payment method that
enables customers to conduct financial transactions
without the necessity of physical contact between their
payment instruments, such as contactless-enabled
credit or debit cards, wearable devices, or mobile
phones, and the point-of-sale (POS) terminal.

It
relies
on
near-field
communication
(NFC)
technology, allowing for secure and rapid wireless data
exchange between the payment instrument and the
POS terminal when they are in proximity. The absence
of physical interaction streamlines the payment
process, resulting in reduced transaction time and
enhanced customer convenience.

This document is for CBN internal consumption
This document is for CBN internal consumption
Supervision and Regulation
The Bank increased the licensing of Payments
System Providers (PSPs) in the first half of 2023 to
strengthen financial services penetration and
accommodate new entrants in the Nigerian
electronic payment space. The number of licensed
PSPs increased significantly to 213 above 132 and
116 in the preceding and corresponding halves of
2022, respectively. Further analysis showed that
the Bank issued one new licence for Card Scheme,
one for Switching and Processing, 35 for
Payments Solution Service Providers (PSSPs), 19
for Payments Terminal Service Providers (PTSPs),
and 24 for Super Agents (SAs). However, the
number of Mobile Money Operators (MMOs)
remained 17 compared with the preceding half of
2022 but grew from 16 in the corresponding half
of 2022.

Implementation of Nigeria Cheque Standard and
Nigeria Cheque Printers Accreditation Scheme
Version 2.0.
In the review period, the Bank conducted both
accreditation and compliance exercises for
Cheque Printers and Personalisers in compliance
with the provisions of the Nigeria Cheque
Standards (NCS) and the Nigeria Cheque Printers
Accreditation Scheme (NICPAS) Version 2.0. At
end-June 2023, there were six (6) existing Cheque
Printers, of which the Bank renewed the licences
of three: Papi Printing Company Limited,
Marvelous Mike Press Limited and KAS Arts
Services Limited, while the other three: Superflux
International Limited, Tripple Gee Co. Ltd. and
Yaliam Press Limited, had subsisting licences.
Similarly, the licences of seven Personalisers,
namely, Zenith Bank Plc, Ecobank Plc, Stanbic IBTC
Bank Plc, First Bank Plc, Keystone Bank Plc, Wema
Bank Plc and Providus Bank Plc, were renewed.
Furthermore, the Bank issued a circular on the
Revised Nigeria Cheque Standard (NCS) and
Nigeria Cheque Printers Accreditation Scheme
(NICPAS) directing DMBs to ensure that the use of
old cheques for any form of transaction and
settlement ceased to be acceptable by 31
December 2023.
Table 3.5.2: Licensed Payments System Participants

License -Type
Number
June

Dec.

June

Card Schemes

Switching and Processing

Mobile Money Operators*

Payment
Solution
Service
Providers

Payment
Terminal
Service
Providers

Super Agents

Accredited Cheque Printers

Total

Source: Central Bank of Nigeria.
*The data shown is for Non-Bank Licensed Mobile Money
Operators.
** n.a – Not applicable with new licence categorization.

3.5.2 Trends in the Payments System
Electronic payments increased on account of the
Bank’s policies to enhance the efficiency of the
payments system. During the review period,
electronic payments (e-payments) witnessed
notable growth in both the volume and value of
transactions.
The
retail
e-payments
and
wholesale e-payments increased in both volume
and value. The surge in retail e-payments was
attributed
to
the
increased
adoption
of
technology and the Internet, which facilitated
more accessible avenues for online financial
services. Furthermore, the Bank's unwavering
commitment to fostering a cashless economy and
the currency re-design policy in the first quarter
of 2023 encouraged the use of electronic
payment methods.
Analysis of electronic payments showed that the
volume of total e-payments rose significantly by
62.5 per cent to 19,532.94 million transactions in
the first half of 2023, compared with 12,020.52
million in the second half, and by 94.3 per cent
above 10,053.47 million in the first half of 2022.
In value terms, e-payments increased by 25.8 per
cent to ₦983.73 trillion, above ₦782.29 trillion in

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

This document is for CBN internal consumption
This document is for CBN internal consumption
the second half of 2022, and by 33.3 per cent over
the ₦737.95 trillion in the first half of 2022. The
rise was attributed to the increased adoption and
utilisation of various electronic channels as
preferred means of payments.
3.5.2.1 Retail Payments System
Transactions in retail e-payments in the first half
of 2023 increased significantly in both volume and
value, attributed to the shifting consumer
preference towards e-transactions and growth in
e-commerce. At 19,532.79 million, the volume of
transactions rose by 62.5 per cent and 94.3 per
cent above the 12,020.38 million and 10,053.32
million in the second and first halves of 2022,
respectively. A breakdown of the volume of
transactions across e-payment channels in the
first half of 2023 showed significant increases
over the levels in the corresponding half of 2022.
Internet/web increased by 74.5 per cent; Point of
Sales (POS), 184.9 per cent; Mobile App, 190.1
per cent; Unstructured Supplementary Service
Data (USSD), 38.7 per cent; National Electronic
Funds Transfer (NEFT), 23.6 per cent; and Direct
Debit, 109.4 per cent, to 11,321.44 million,
4,872.27 million, 2,330.34 million, 370.29 million,
48.83 million and 72.10 million, respectively.
ATM transactions, however, declined by 27.0 per
cent to 519.52 million. Relative to the second half
of 2022, transactions via the internet/web, POS,
Mobile App, and Unstructured Supplementary
Service Data (USSD) increased by 49.4, 124.0,
120.2, and 48.7 per cent, respectively, while NEFT
and Direct Debit transactions decreased by 0.3
and 38.1 per cent, respectively.
The total value of transactions increased to
₦932.39 trillion in the first half of 2023, signifying
a growth of 25.1 and 33.0 per cent over the levels
in the preceding and corresponding halves of
2022, respectively. A breakdown of the value of
transactions across e-payment channels in the
first half of 2023 showed significant increases over
the levels in the corresponding half of 2022.
Internet/web increased by 32.7 per cent; Point of
Sales (POS), 207.4 per cent; Mobile App, 88.8 per
cent; Unstructured Supplementary Service Data
(USSD), 19.8 per cent; National Electronic Funds
Transfer (NEFT), 14.2 per cent; and ATM, 15.7 per
cent, to 462.17 trillion, 48.44 trillion, 97.05 trillion,
2.72 trillion, 298.13 trillion and 14.63 trillion,
respectively. Direct Debit, however, declined by
5.1 per cent to 9.25 trillion. Relative to the second
half of 2022, transactions via the internet/web,
POS, Mobile App, USSD and NEFT increased by
6.2, 91.7, 62.5, 22.5, and 60.0 per cent
respectively, while ATM and Direct Debit
transactions decreased by 26.3 and 44.4 per cent,
respectively.
Analysis of the components of the retail epayments segment showed that the internet/web
channel dominated all other channels, accounting
for 58.0 per cent of the total volume and 49.6 per
cent of the total value in the review period. The
composition of e-payments transactions by
volume revealed that, POS, Mobile App, ATMs,
NEFT, USSD and Direct Debit channels constituted
24.9, 11.9, 2.7, 0.2, 1.9, and 0.4 per cent
respectively of the total e-payment transactions.
In value terms, PoS, Mobile App, ATMs, NEFT,
USSD and Direct Debit channels constituted 5.2,
10.4, 1.6, 32.0, 0.3, and 1.0 per cent of the total
e-payment transactions in the first half of 2023.
Figure 3.5.1: Composition of e-Payments Transactions by
Volume, First Half 2023 in Per cent
Source: Central Bank of Nigeria
ATM
2.7%
POS
24.9%
Internet/Web
58.0%
NEFT
0.2%
USSD
1.9%
Mobile App
11.9%
Direct Debits
0.4%


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
At end-June 2023, the number of ATM terminals
stood at 19,490, compared with 19,433 and
19,392 terminals at end-December 2022 and
end-June 2022, respectively. The number of
connected
Point-of-Sale
(POS)
terminals
increased to 2.29 million above 1.66 million at
end- December 2022 and 1.29 million at end-
June 2022. Similarly, the number of agents
increased to 1,669,487 above 1,474,173 and
1,204,423 at end-December 2022 and end-June
2022, respectively.

Figure 3.5.2: Share of e-Payments Transactions by Value
First Half 2023 in Per cent
Source: Central Bank of Nigeria

The volume and value of cheque transactions
decreased in the review period due to the uptake
of e-payment channels in settling transactions.
At 6.9 million, the volume of cheque
transactions decreased by 25.0 and 17.8 per
cent below 9.2 million and 8.4 million in the
second and first halves of 2022, respectively.
Similarly, at N6,969.9 trillion in the first half of
2023, the value of cheque transactions
decreased by 10.2 and 6.9 per cent, below
N7,764.5 trillion and N7,486.7 trillion in the
second and first halves of 2022, respectively.
In the first half of 2023, the volume and value of
payment services offered by MMOs through their
agent touchpoints increased significantly. The
volume of transactions increased to 5,128
million, above 1,480.99 million and 445.3 million
in the second and first halves of 2022,
respectively. Similarly, the value of transactions
increased to N42.25 trillion, compared with
N23.01 trillion and N9.58 trillion in the second
and first halves of 2022. These developments
were attributed to the increased onboarding of
agents, a crucial driver for advancing financial
inclusion.

3.5.2.2 Wholesale Payments System
The volume and value of transactions in the
wholesale
payments
(Real
Time
Gross
Settlement (RTGS)) system increased in the first
half of 2023. The volume of inter-bank fund
transfers through the RTGS increased by 4.3 per
cent to 145,190 in the first half of 2023 above
139,181 in the preceding half of 2022, but fell by
2.6 per cent below 149,035 in the corresponding
half of 2022. At N51,341.43 billion, the value of
transactions increased by 39.1 and 39.5 per cent
above N36,913.89 billion and N36,792.58 billion
in the preceding and corresponding halves of
2022, respectively.

Figure 3.5.3. Volume of Inter-bank RTGS Transactions
Source: Central Bank of Nigeria
ATM
1.6%
Pos
5.2%
Internet/We
b
49.6%
NEFT
32.0%
USSD
0.3%
Mobile App
10.4%
Direct
Debits

First Half 2022
Second Half 2022
First Half 2023


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Figure 3.5.4: Value of Inter-bank RTGS Transactions
(N’ Billion)
Source Central Bank of Nigeria


Table 3.5.3: Volume and Value of Electronic Payments and Other Channels
Payment
Channels
Number of Terminals
Volume of Transactions (Million)
Value of Transaction N'Trillion
Jun-22
Dec-22
Jun-23
Jun-22
Dec-22
Jun-23
Jun-22
Dec-22
Jun-23
ATM

POS

Internet (Web)
-
-


NEFT
-
-


RTGS
-
-


USSD
-
-


Mobile App
-
-


Direct Debits
-
-


Total e-Payment


Cheques
-
-


MMOs
-
-


Source: Central Bank of Nigeria


Note: Total e-payment transactions includes ATM, online transfers, NEFT, RTGS, USSD, Mobile App, and Direct Debit transactions


First Half 2022
Second Half 2022
First Half 2023


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
3.6
EXTERNAL SECTOR DEVELOPMENTS
The external account in the first half of 2023
deteriorated largely, due to global financial
tightening to rein in inflation, and a lull in economic
activities,
attributed
to
the
uncertainties
surrounding
the
general
elections.
The
development resulted in an overall balance of
payments deficit of 1.4 per cent of GDP, higher than
the deficit of 1.0 per cent of GDP and 0.4 per cent
of GDP in the second half of 2022, and the first half
of 2022, respectively.
Sustained inflow of remittances, coupled with
declines in import bills and payment for services,
resulted in an improved current account surplus of
1.1 per cent of the GDP. The financial account
maintained a net borrowing position with a net
incurrence of financial liabilities of 0.7 per cent of
the GDP, compared with 1.4 per cent in the
preceding period. The international investment
position (IIP) posted a lower net liability of
US$53.13 billion in the review period.
The external reserves position at end-June 2023
was US$33.71 billion and could finance 7.9 months
of import (goods only) or 5.9 months of import
(goods and services), which was above the
international benchmark of 3.0 months. The
foreign exchange market remained relatively
stable in the first five months of 2023. Following
the Bank’s introduction of new reforms from June
14, 2023, the average exchange rate of the naira
depreciated by 10.3 per cent. The stock of external
debt increased to US$43.16 billion, from US$41.69
billion at end-December 2022, following additional
loan disbursements.


Current and Capital Account Developments
The current and capital account recorded a higher
surplus, driven by improved surplus in the
secondary income account and lower deficits in the
services and the primary income accounts. The
current account surplus improved significantly to
US$2.46 billion or 1.1 per cent of GDP, compared
with US$0.73 billion and US$0.29 billion in the first
and second halves of 2022, respectively. The
development was buoyed by lower deficits in the
services and primary income accounts, as well as a
higher surplus in the secondary income account.

Figure 3.6.1: Current and Capital Account Balance (US$
'Billion)

Source: Central Bank of Nigeria

Trade
Transactions in the goods account resulted in a
lower surplus of US$2.66 billion or 1.3 per cent of
GDP, compared with US$3.24 billion and US$2.76
billion in the first and second halves of 2022,
respectively. The development was, largely, due to
lower export earnings.


2021H1
2021H2
2022H1
2022H2
2023H1


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Export Performance
Lower export receipts was recorded, on account
drop in gas export as a result of slowdown in
demand, due to favourable weather conditions,
particularly in Europe. Aggregate export earnings
declined by 1.6 per cent to US$28.29 billion or 13.7
per cent of GDP, compared with US$28.75 billion
in the second half of 2022. It also indicated a
decline of 20.2 per cent, compared with US$35.47
billion in the first half of 2022. The development
was, driven, majorly by the decrease in oil export
earnings to US$24.90 billion, from US$25.54 billion
in the second half and US$31.57 billion in the first
half of 2022. The decline in oil and gas export
receipts was majorly on account of a slowdown in
demand for gas.
In terms of share in total export earnings, crude oil
and gas component remained dominant, with 88.0
per cent, while non-oil accounted for 12.0 per
cent.
A disaggregation of total export shows that crude
oil and gas export receipts declined by 2.5 per cent
and 21.1 per cent to US$24.90 billion (11.5 per
cent of GDP), in the review period, compared with
US$25.54 billion and US$31.57 billion in the
preceding and corresponding halves of 2022,
respectively. Crude oil export receipts rose slightly
by 0.1 per cent to US$22.02 billion, relative to
US$22.00 billion in the second half of 2022,
reflecting majorly, sustained levels of crude oil
production, following the increased surveillance of
pipeline infrastructure against vandalism and
theft. Compared with the first half of 2022, oil
export declined by 20.7 per cent from US$27.76
billion.
Gas export receipts dropped by 19.0 per cent and
24.6 per cent to US$2.88 billion, compared with
US$3.55 billion and US$3.81 billion in the
preceding and corresponding halves of 2022,
respectively. The development was, driven, largely
by lower export of liquefied natural gas and
liquefied petroleum gas in the review period,
occasioned by slowdown in demand, due to
favourable weather conditions, particularly, in
Europe and the United States.
Non-oil export earnings rose by 5.8 per cent to
US$3.40 billion or 1.6 per cent of GDP, from
US$3.21 billion in the second half of 2022, but
declined by 13.1 per cent, compared with US$3.91
billion in the corresponding half of 2022. The rise
in non-oil export earnings was attributed to
favourable commodity prices and the positive
effects of domestic policy measures aimed at
boosting non-oil export.
A breakdown of non-oil export by sector shows
that agricultural export, (majorly cocoa beans,
cashew nuts and sesame seeds) accounted for the
largest share of 43.5 per cent, followed by other
non-oil export (mainly urea and cement) with 24.6
per
cent.
Semi-manufactured
(driven
by
aluminium, leather products, cocoa products and
tin) accounted for 15.0 per cent, while mineral
product (mainly copper, lead and zinc) was 9.6 per
cent. Manufactured products (majorly aluminium
products and tobacco) accounted for 7.5 per cent
of total non-oil export.
The main non-oil export commodities comprised
urea, cocoa beans, cashew nuts, sesame seeds,
and aluminium. Vietnam, Japan, China, Brazil, the
US, Hungary, The Netherlands and Malaysia were
the major export destinations.
Export to the ECOWAS Sub-Region
Nigeria’s export to the ECOWAS sub-region
decreased, reflecting a lull in economic activities
during the general elections period. Nigeria's non-


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
oil export to the ECOWAS sub-region declined to
US$175.48 million in the first half of 2023, from
US$249.17 million in the second half of 2022 and
US$254.98 million in the first half of 2022. A
breakdown shows that Nigeria’s export to Niger, at
US$47.14 million, constituted 26.9 per cent of the
total, followed by: Ghana with US$41.16 million,
23.5 per cent; Côte d’Ivoire, US$23.78 million, 13.6
per cent; and Togo, US$17.72 million, 10.1 per
cent. Export to Senegal was US$16.33 million, 9.3
per cent; Benin, US$12.75 million, 7.3 per cent;
and Burkina Faso, US$10.67 million, 6.1 per cent.
Other countries accounted for the balance of 3.4
per cent. The major export commodities to the
sub-region
were
tobacco,
instant
noodles,
detergents, plastics, dairy products, soyabean
meal and carbonated soft drinks.

Table 3.6.1: Export to ECOWAS Sub-Region (US$ Million)
S/N
Country
Amount

Niger
47.14

Ghana
41.16

Côte d’Ivoire
23.78

Togo
17.72

Senegal
16.33

Benin
12.75

Burkina Faso
10.67

Mali
2.00

Liberia
1.34

Guinea-Bissau
0.92

The Gambia
0.89

Sierra Leone
0.48

Guinea
0.29

Cape Verde
-
Total
175.48
Source: Central Bank of Nigeria
Figure 3.6.2: Export to ECOWAS Sub-Region in Per cent

Source: Central Bank of Nigeria

Foreign Exchange Earnings by the Top 100 Non-Oil
Exporters.
The sustained implementation of domestic policy
measures aimed at boosting non-oil export
resulted in higher earnings by the top 100 non-oil
exporters. Receipts by the top 100 non-oil
exporters increased by 1.9 per cent to US$2.12
billion, from US$2.08 billion in the second half of
2022. The amount was lower than US$2.29 billion
in the corresponding half of 2022. The value of the
top 100 non-oil export accounted for 47.1 per cent
of total non-oil export receipts.
A breakdown of the receipts shows that Indorama
Eleme Fertiliser and Chemical Limited topped the
list with a value of US$260.22 million, representing
12.3 per cent of the total, from the export of urea
and fertiliser to Turkey and China. Dangote
Fertilizer Limited followed with US$199.87 million
or 8.6 per cent of the total, from the export of
fertilizer to the US and Brazil.
In third place was Outspan Nigeria Limited with
export value of US$133.55 million or 6.3 per cent
of total, from the export of cocoa beans and
cashew nuts to Malaysia, the US, and Vietnam. In
the fourth position was Starlink Global and Ideal
Togo
10.1%
Benin
7.3%
Senegal
9.3%
Ghana
23.5%
Niger
26.9%
Côte
d’Ivoire
13.6%
Burkina
Faso
6.1%
Other Ecowas
Countries...


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Limited, with earnings of US$100.50 million (4.7%),
from the export of aluminium alloy ingots, copper
billets, and brass ingots to China. In the fifth, sixth
and seventh positions were Metal Recycling
Industries Limited, Segilola Resources Operating
Limited and Olam Nigeria Limited with export
values of US$86.04 million (4.1%); US$71.01
million (3.4%) and US$60.11 million (2.8%). Metal
recycling Industries Limited exported aluminium
and brass ingots to China. Segilola Resources
Operating Limited exported gold to China, while
Olam Nigeria Limited exported cocoa bean seeds
to Australia, Greece, Turkey and China.
Everest Metal Nigeria Limited, WACOT Limited,
and Sunbeth Global Concept Limited ranked
eighth, ninth and tenth, with respective earnings of
US$56.61 million (2.7%), US$53.49 million (2.5%),
and US$50.45 million (2.4%). Everest Metal Nigeria
Limited exported aluminium and copper ingots to
the US, while WACOT Limited exported cotton
products, sesame seeds, and ginger to The
Netherlands and the US. Sunbeth Global Concept
Limited exported cocoa beans and cashew nuts to
the US.

Table 3.6.2: Top 10 Non-Oil Exports (US$ Million)
S/N
EXPORTER
AMOUNT

% SHARE

INDORAMA ELEME FERTILIZER AND
CHEMICAL LTD
260.22
12.3

DANGOTE FERTILIZER LIMITED
199.87
9.4

OUTSPAN NIGERIA LIMITED
133.55
6.3

STARLINK GLOBAL & IDEAL LIMITED
100.50
4.7

METAL RECYCLING INDUSTRIES LIMITED
86.04
4.1

SEGILOLA
RESOURCES
OPERATING
LIMITED
71.01
3.4

OLAM NIGERIA LIMITED
60.11
2.8

EVEREST METAL NIGERIA LIMITED
56.61
2.7

WACOT LIMITED
53.49
2.5

SUNBETH GLOBAL CONCEPT LTD
50.45
2.4
Source: Central Bank of Nigeria

Non-Oil Receipts through Banks
Non-oil export proceeds repatriated through the
banking system increased by 22.6 per cent to
US$3.48 billion, compared with US$2.84 billion in
the preceding half of 2022. The value was also
higher than US$2.85 billion in the corresponding
half of 2022 by 21.9 per cent. The amount
accounted for 77.3 per cent of total non-oil export
receipts in the review period. A breakdown of the
proceeds by sector shows that receipts from the
export of agricultural products accounted for 44.2
per cent of total receipts, followed by industrial
products with a share of 30.6 per cent of the total.
Proceeds from the sale of manufactured products
constituted 20.5 per cent; mineral products,
(3.0%); transport, (0.9%); and food products,
(0.8%).

Figure 3.6.3: Non-Oil Export Receipts by Banks in Per cent

Source: Central Bank of Nigeria

Merchandise Import
Aggregate merchandise import bills decreased, due
to supply constraints and low aggregate demand.


F I R S T H A L F 2 0 2 2
S E C O N D H A L F
2 0 2 2
F I R S T H A L F 2 0 2 3
Industrial
Food
Manufactured
Transport
Agriculture
Minerals


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Aggregate merchandise import decreased by 1.4
and 20.5 per cent to US$25.64 billion or 11.9 per
cent of the GDP, compared with US$26.00 billion
and US$32.23 billion in the second and first halves
of 2022, respectively. A breakdown shows the
importation of non-oil products declined by 8.4
and 17.2 per cent to US$15.59 billion or 7.2 per
cent of GDP, compared with US$17.03 billion and
US$18.84 billion in the second and first halves of
2022.
Importation
of
petroleum
products
increased by 11.9 per cent to US$10.04 billion (4.6
per cent of GDP), compared with US$9.0 billion in
the second half of 2022, but declined by 28.0 per
cent relative
to US$13.96
billion
in
the
corresponding half. Despite the decline in non-oil
import, it continued to dominate total import,
accounting for 60.8 per cent of the total import. Oil
import constituted the balance of 39.2 per cent.
A breakdown of merchandise import by broad
economic categories indicates that fuels and
lubricants accounted for 32.6 per cent, followed by
industrial sector, with 19.3 per cent. Furthermore:
capital goods was 15.4 per cent, food and
beverages, 13.1 per cent; transport equipment and
parts, 13.0 per cent; consumer goods, 5.2 per cent;
and others, 1.4 per cent.
Figure 3.6.4: Export, Import and Trade Balance

Source: Central Bank of Nigeria
Services
Transactions in the services account resulted in a
lower deficit, owing, largely, to reduced payments
for transportation and travel services. The deficit in
the services account decreased by 12.1 per cent to
US$6.32 billion, or 2.9 per cent of GDP in the first
half of 2023, compared with US$7.19 billion in the
second half of 2022. Analysis indicates that
payments for imported services declined by 13.4
per cent to US$8.49 billion, relative to US$9.81
billion in the second half of 2022.
A
breakdown
shows
that
payments
for
transportation and travel services declined by 18.1
and 15.0 per cent, respectively, to US$3.85 billion
and US$1.79 billion, compared with US$4.70
billion and US$2.10 billion in the second half of
2022. The development was attributed to lower
spending on air transportation, while for travel
payments was due to lower expenditure on
education related travels.
Furthermore, financial services, declined by 57.0
per cent, to US$0.12 billion in the first half of 2023.
Similarly, payments for insurance and pension
services, as well as government services fell by 1.7
and 2.8 per cent to US$0.32 billion and US$0.16
billion, compared with the levels in the preceding
half of 2022.
Payments for personal, cultural, and recreational
services increased to US$0.12 billion, from
US$0.02 billion. Payments for telecommunications
services also grew by 14.5 per cent to US$0.30
billion, relative to US$0.26 billion in the second half
of 2022, owing to higher payments for computer
and information services.
Analysis of total services payments by share shows
that transportation services constituted 45.4 per
cent, followed by travel services at 21.0 per cent.

First Half 2021
Second Half 2021
First Half 2022
Second Half 2022
First Half 2023
US $ BIllions
Export
Import
Trade Balance


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Other business services accounted for 20.0 per
cent;
insurance
services,
3.7
per
cent;
telecommunications and computer services, 3.5
per cent; government services, 1.9 per cent;
charges on intellectual property, 1.5 per cent; and
financial services, 1.4 per cent.

Figure 3.6.5: Share of Services Out-Payments in Per cent

Source: Central Bank of Nigeria
Aggregate earnings from services export declined
by 17.0 and 3.2 per cent to US$2.17 billion, relative
to the levels in the second half and first half of
2022. The development was attributed to lower
inflow from the provision of travel, financial and
transportation services.
A breakdown reveals that receipts from travel
decreased by 33.4 per cent, to US$0.42 billion,
compared with US$0.63 billion in the second half
of 2022. Proceeds from transportation services
also dropped by 10.4 per cent to US$0.95 billion,
compared with the level in the preceding half of
2022, owing majorly to lower receipts from sea
transportation services. Receipts from financial
services also fell by 18.0 per cent to US$0.38
billion, relative to US$0.46 billion in the second half
of 2022. Inflow from telecommunication services,
declined by 20.5 per cent to US$0.11 billion,
relative to the level in the second half of 2022.
Receipts from government services decreased
marginally by 0.7 per cent to US$0.23 billion,
compared with the level in the preceding half of
2022.
In terms of share in total services receipts,
transportation services accounted for 43.5 per
cent of the total, followed by: travels, 19.2 per
cent; financial services, 17.3 per cent; government
service, 10.6 per cent; and telecommunication
services, 5.1 per cent. Insurance services was 2.3
per cent, while other business services accounted
for 1.9 per cent of the total.
Figure 3.6.6: Share of Services Receipts in Per cent

Source: Central Bank of Nigeria

Primary Income
The deficit in the primary income account
narrowed, due, majorly, to lower investment
income claims by non-resident investors as some
companies declared losses. The primary income
account deficit narrowed by 13.0 per cent to
US$4.95 billion, compared with US$5.69 billion, in
the preceding half of 2022 and by 31.0 per cent,
relative to US$7.18 billion in the corresponding
period of 2022.
Transportati
on
45.4%
Travel
21.0%
Other
Business
20.0%
Insurance
3.7%
Telecommun
ication
3.5%
Government
1.9%
Financial
1.4%
Charges on
Intellectual
Prperty
1.5%
Others
1.6%
Transportatio
n
43.5%
Travel
19.2%
Other
Business
1.9%
Insurance
2.3%
Telecommuni
cation
5.1%
Government
10.6%
Financial
17.3%


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Investment income from direct investment in the
form of dividends and profit payments, decreased
by 11.1 per cent to US$5.77 billion, compared with
US$6.49 billion in the preceding half of 2022. A
breakdown shows
that
dividend
payments
increased by 1.3 per cent to US$5.02 billion, from
US$4.96 billion in the second half of 2022. There
were, however, negative reinvested earnings of
US$0.79 billion was recorded, compared with
US$0.42 billion in the preceding half-year. The
development reflected lower investment income
claims by non-resident investors as some
companies declared losses during the review
period.
Interest payments on portfolio investments
increased to US$0.18 billion, compared with
US$0.11 billion in the second half of 2022,
indicating the bullish performance of the capital
market in the review period. Similarly, interest
earnings on external reserves investments grew to
US$0.46 billion, compared with US$0.29 billion in
the second half of 2022, owing to higher interest
on fixed income securities in the Advanced
Economies. Interest payments on loans increased
to US$1.32 billion, from US$0.95 billion in the
preceding period.
The compensation of employees sub-account
remained in a surplus position, though lower by 2.2
per cent at US$0.12 billion, compared with the
level in the preceding half of 2022.

Secondary Income
The secondary income account recorded a higher
surplus, owing to increased inflow of grants to the
general government and sustained inflow of
remittances. The surplus in the secondary income
account increased to US$11.08 billion or 5.1 per
cent of GDP in the review period, compared with
US$10.41 billion or 4.0 per cent of GDP in the
preceding period. It was, however, lower than
US$11.44 billion recorded in the corresponding
half of 2022. The increase was occasioned by
sustained inflow of remittances and higher inflow
of grants to the general government, majorly to
support the general elections process during the
review period. Inflow of grants to the general
government rose to US$1.44 billion in the first half
of 2023, from US$1.26 billion in the preceding half
of 2022. The amount, however, was lower by 7.3
per cent when compared with US$1.55 billion in
the corresponding period.
Remittances
from migrant
workers,
which
constituted 86.8 per cent of total secondary
income inflow increased slightly to US$9.80 billion,
from US$9.75 billion in the second half of 2022, but
lower than US$10.11 billion in the first half of
2022, reflecting improvements in wages in major
migrant host countries as inflation eases in the
review period.
Figure 3.6.7: Workers’ Remittances (US$’ Billion)

Source: Central Bank of Nigeria

Financial Account Developments
The financial account remained in a net borrowing
position in the review period. The financial account
recorded a lower net incurrence of liabilities of
US$1.48 billion in the review period, compared


10.2
2021H1
2021H2
2022H1
2022H2
2023H1


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
with US$3.54 billion and US$2.95 billion in the
preceding and corresponding halves of 2022,
respectively. The development was, due to lower
inflow of foreign portfolio and loans, occasioned by
the lull in domestic economic activities, particularly
during the general elections in the first quarter and
tight global financial conditions.

Net Incurrence of Liabilities
Tighter
global
financial
conditions
and
uncertainties surrounding the general elections
dampened investors’ sentiments, thus, resulting in
a lower inflow of foreign capital. Aggregate
financial liabilities declined significantly to US$0.97
billion, compared with US$5.51 billion and
US$7.49 billion in the second and first halves of
2022, respectively.
A
breakdown
reveals
that
foreign
direct
investment (FDI) inflow amounted to US$0.01
billion in the first half of 2023, compared with
US$1.25 billion in the preceding half. This was in
contrast to a divestment of US$1.44 billion in the
corresponding half of 2022. The decrease was as a
result of the lower inflow of equity and negative
reinvested earnings.
Also, portfolio investment inflow in form of equity
and debt securities was lower at US$0.77 billion,
relative to US$1.34 billion and US$3.22 billion in
the preceding and corresponding halves of 2022,
respectively. The development was owing majorly
to the Central Bank’s redemption of matured
investments in short-term debt securities. In
contrast, ‘other’ investment recorded an outflow
of US$0.18 billion, in contrast to an inflow of
US$2.92 billion in the preceding half of 2022, and
US$4.70 billion in the corresponding half of 2022,
due to withdrawal of currency and deposits from
domestic deposit taking corporations.
Figure 3.6.8: Foreign Capital Inflow (US$ Billion)

Source: Central Bank of Nigeria

Net Acquisition of Assets
Aggregate financial assets recorded a disposal of
US$0.52 billion, in contrast to an acquisition of
US$1.96 billion and US$4.54 billion in the
preceding and corresponding halves of 2022,
respectively. The development was, largely due, to
lower acquisition of other investment assets and
depletion in external reserves.
An analysis reveals a disposal of direct investment
assets by resident investors stood at US$0.01
billion in the review period, relative to an
acquisition of US$0.18 billion in the second half of
2022. Portfolio investment assets decreased to
US$0.02 billion, compared with US$0.40 billion in
the preceding half of 2022. The acquisition of
‘other investment’ asset also decreased to
US$2.44 billion, compared with US$3.93 billion in
the preceding half of 2022. The decline was, due to
the withdrawal of foreign currency and deposits by
deposit taking corporations and repayment of
loans by the deposit-taking corporations.
Reserve assets was depleted by US$2.96 billion in
the review period, compared with US$2.54 billion
in the preceding half of 2022. The depletion was on
account of settlement of balance of payments

H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
Direct investment
Portfolio investment
Financial derivatives
Other investment


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
obligations, including servicing of outstanding debt
obligations.
External Debt
Nigeria's public external debt increased in the
review period, owing to incurrence of new of loans.
Nigeria’s public sector external debt stock and
external debt service payment at end-June 2023
stood at US$43.16 billion or 10.4 per cent of GDP
and US$0.37 billion, respectively. A breakdown
showed that the multilateral loans, from the World
Bank, International Monetary Fund, and African
Development
Bank
Groups,
amounted
to
US$20.79 billion, accounting for 48.2 per cent of
the total. A total of US$15.62 billion or 36.2 per
cent of the total was borrowed from commercial
sources in the form of Euro Bonds. Loans from
bilateral sources was US$5.52 billion, or 12.8 per
cent of the total, promissory notes were US$0.93
billion, or 2.2 per cent of the total, while
syndicated loan (arranged by African Finance
Corporation) stood at US$0.30 billion or 0.7 per
cent of the total debt stock.
The external debt service payment stood at
US$0.37 billion at end-June 2023. A breakdown
showed that interest payment totaled US$0.21
billion, accounting for 56.8 per cent of the entire
debt service payment. Principal repayment totaled
US$0.13 billion, or 35.1 per cent of the total, while
other payments made up the balance. An analysis
of interest payments showed that interest
payment on commercial borrowings accounted for
75.3 per cent of the total at US$0.16 billion, while
interest on multilateral loans amounted to
US$0.04 billion or 21.4 per cent of the total.
Interest
payments
to
bilateral
institutions
accounted for the balance.


International Investment Position
A lower net liability was recorded in the
International Investment Position. A lower net
financial liability of US$53.13 billion was recorded
at end-June 2023, compared with US$74.64 billion
at end-December 2022, and US$74.91 billion at
end-June 2022.
The stock of financial liabilities, representing
foreign investors' claims on the economy, declined
by 12.1 per cent to US$161.90 billion at end-June
2023, relative to US$184.27 billion at endDecember 2022. There was also a 11.7 per cent
decline when compared to US$183.25 billion at
end-June 2022. The development reflected a
decrease in the stock of portfolio investments
(particularly the household holdings) and direct
investments (particularly equity and investment
fund shares in direct investment enterprises).
The stock of portfolio investment fell by 21.3 per
cent to US$28.46 billion at end-June 2023, relative
to US$36.17 billion at end-December 2022.
Similarly, the stock of FDI liabilities declined by 16.0
per cent to US$72.08 billion at end-June 2023,
relative to US$ 85.81 billion at end-December
2022. The stock of other liabilities also declined by
1.9 per cent to US$57.98 billion at end-June 2023,
relative to US$59.12 billion at end-December
2022.
Total stock of financial assets declined marginally
by 0.8 per cent to US$108.77 billion at end-June
2023, relative to US$109.64 billion at endDecember 2022. This was, largely due, to the
depletion in external reserves.
Further analysis reveals that direct investment
declined slightly by 0.1 per cent to US$13.65 billion
at end-June 2023, relative to US$13.67 billion at
end-December
2022.
Portfolio
investment
declined by 5.1 per cent to US$3.85 billion at end-


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
June 2023, relative to US$4.06 billion at endDecember 2022. However, ‘Other’ investment
assets rose by 4.3 per cent to US$54.40 billion,
relative to US$52.14 billion at end-December
2022. The stock of reserve assets fell to US$33.71
billion at end-June 2023, relative to US$36.61
billion at end-December 2022.

External Reserves
The external reserves remained above the
international benchmark of three months of import
cover. Gross external reserves at end-June 2023
stood at US$33.71 billion, compared with
US$36.61 billion and US$39.16 billion at endDecember 2022 and end-June 2022, respectively.
The 7.9 per cent decline in external reserves,
compared with the level at end- December 2022,
was, mainly due, to the Bank’s effort to stabilise
the foreign exchange market and settlement of
other obligations, including public sector and
external debt service payments.
A breakdown of external reserves by ownership
shows that, the CBN maintained the largest share
of 85.9 per cent, followed by the Federal
Government with 14.0 per cent. The Federation
accounted for the outstanding 0.1 per cent. In
terms of currency composition, the US dollar, at
US$25.11 billion, constituted 74.5 per cent of the
total; Special drawing rights, US$5.02 billion
(14.9%); Chinese yuan, US$3.16 billion (9.4%); and
other currencies accounted for the balance of 1.2
per cent.
An assessment of external reserves adequacy
based on the traditional benchmark, shows, that
the level of reserves at end-June 2023 could
finance 6.0 months of import of goods and services
or 8.2 months of goods only, higher than the
prescribed 3.0 months international benchmark.
The ratio of external reserves to short-term
liabilities was 3.4 percentage points below the
benchmark of 100.0 per cent short-term debt
cover, based on the Greenspan-Guidotti measure
of external reserves adequacy. In terms of external
reserves to money supply (M3), the ratio, at 40.1
per cent was above the international benchmark of
20.0 per cent.

Figure 3.6.9: External Reserves Stock and Reserve
Adequacy Measures
Source: Central Bank of Nigeria

External Asset Management Programme and
Income from Reserves Management
The Net Asset Value of the portfolio managed
by the external Asset Managers increased to
US$7.31 billion at end-June 2023, from
US$7.23 billion at end-December 2022 and
US$7.26 billion at end-June 2022.
Foreign Exchange Flows
The economy recorded a higher net foreign
exchange inflow, due to increased receipts from
autonomous sources. Foreign exchange flow
through the economy recorded a net inflow of
US$16.75 billion in the first half of 2023, compared
with US$14.27 billion in the second half of 2022.

First Half 2022
Second Half 2022
First Half 2023
Reserves
Import Cover (Goods)
Import Cover (G&S)
Reserves/M3
Short Term Debt Cover


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Aggregate inflow into the economy rose by 2.4 per
cent to US$34.04 billion in the first half of 2023,
compared with US$33.26 billion, in the second half
of 2022, but fell by 11.7 per cent, compared with
US$38.56 billion, in the first half of 2022. The
development was driven, largely, by 8.6 per cent
increase in inflow through autonomous sources. A
breakdown shows that inflow through the CBN and
autonomous sources accounted for 36.9 and 63.1
per cent, respectively.
Inflow through autonomous sources increased by
8.6 per cent to US$21.47 billion, from US$19.77
billion in the second half of 2022. Foreign exchange
inflow through the CBN fell by 6.8 per cent to
US$12.58 billion in the first half of 2023 from
US$13.49 billion in the second half of 2022.
Aggregate foreign exchange outflow from the
economy declined by 8.9 per cent to US$17.29
billion, from the levels in the second half of 2022.
A breakdown shows that outflow through
autonomous sources declined by 29.5 per cent to
US$2.07 billion, compared with the level in the
second half of 2022. Similarly, outflow through the
CBN decreased by 5.2 per cent to US$15.22 billion.
A net inflow of US$19.40 billion was recorded in
the first half of 2023 through autonomous sources,
compared with US$16.84 billion in the second half
of 2022. The CBN recorded a higher net outflow of
US$2.65 billion in the first half of 2023, compared
with US$2.56 billion in the second half of 2022.


Figure 3.6.10: Foreign Exchange Flows through the Economy
(US$ Billion)

Source: Central Bank of Nigeria

Foreign Exchange Management
The foreign exchange market remained relatively
stable in the first five months of 2023. The Bank,
however, introduced some operational changes in
the foreign exchange market from June 14, 2023,
which included the collapse of all foreign exchange
segmented markets into the Investors and
Exporters (I&E) window. Thus, all eligible foreign
exchange transactions for medical needs, school
fees, Business Travel Allowance/ Personal Travel
Allowance (BTA/PTA) and Small and Medium
Enterprise (SMEs) import amongst others were to
be transacted at the I & E window.
The Bank also discontinued the RT200 Rebate
Scheme and the Naira4Dollar Remittance Scheme
to ensure a market determined foreign exchange
rate. In addition, the Bank introduced eNaira
payment option to recipients of diaspora
remittances. The policy shift to a market
determined regime resulted in the depreciation of
the naira.


H 1 2 2
H 2 22
H 1 23
Inflow
Outflow
Netflow


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Exchange Rate Movements
The exchange rate of the naira to the US dollar at
the I&E window, closed at N770.88/US$ at endJune 2023, relative to N460.00/US$ at endDecember 2022 and N414.00/US$ at end-June
2022.
The average exchange rate of the naira to the US
dollar at the I&E window depreciated by 10.3 per
cent and 14.4 per cent to ₦486.08/US$ in the first
half of 2023, relative to ₦436.00/US$ and
₦416.02/US$ in the second and first halves of
2022, respectively.
Figure 3.6.11: Average Exchange Rate Movements
(N /US$)

Source: Central Bank of Nigeria

In the first half of 2023, the average cross exchange
rate of the naira against the surveyed currencies
depreciated, relative to the levels in the second
half of 2022. The naira depreciated by 14.6 per
cent against the British pound to N600.39/£. The
naira also depreciated by 15.8 per cent against the
euro to N525.46/€ and 13.3 per cent against the
Japanese yen at N3.60/¥. The naira weakened by
15.3 per cent against the CFA Franc and 12.0 per
cent against the WAUA, to N0.79/CFA and
N638.94/WAUA.
Sectoral Utilisation of Foreign Exchange
Aggregate utilisation of foreign exchange by
sectors decreased, driven, mainly by decline in the
utilisation for invisibles import. Aggregate sectoral
utilisation of foreign exchange was US$13.78
billion in the first half of 2023, indicating a
decrease of 10.9 per cent, compared with the level
in the second half of 2022. It also fell by 3.9 per
cent relative to the level in the corresponding half
of 2022. A disaggregation shows that US$9.34
billion or 67.7 per cent of the foreign exchange was
utilised for visible import, indicating an increase of
0.2 and 5.0 per cent, compared with their levels in
the second and first halves of 2022, respectively.
Further analysis shows that the amount utilised by
the industrial sector, at US$4.83 billion, rose by
14.0 per cent, over the level in the second half of
2022. Similarly, utilisation by oil, mineral and
transport sectors grew by 13.2, 15.9 and 12.8 per
cent, to US$0.81 billion, US$0.43 billion and
US$0.28 billion, respectively, compared with the
levels in the preceding period.
The amount utilised for manufactured, food
products and agricultural sectors declined by 27.3,
12.9 and 4.2 per cent, to US$1.47 billion, US$1.36
billion, and US$0.16 billion, respectively, relative to
the levels in the preceding half of 2022.
Figure 3.6.12: Share of Sectoral Utilisation of Foreign
Exchange (Visible)


Source: Central Bank of Nigeria

H1 2021
H2 2021
H1 2022
H2 2022
H1 2023
I&E
INDUSTRIAL
SECTOR, 35.0
FOOD PRODUCTS,
9.9
MANUFACTURED
PRODUCTS, 10.7
TRANSPORT
SECTOR, 2.0
AGRICULTURAL
SECTOR, 1.2
MINERALS, 3.1
OIL SECTOR, 5.8


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2022

This document is for CBN internal consumption
Invisible transactions at US$4.45 billion or 32.3 per
cent of the total, declined by 27.7 per cent, below
US$6.16 billion in the second half of 2022, and 18.4
per cent below US$5.45 billion recorded in the first
half of 2022. A breakdown shows that the amount
utilised for financial services and other services
declined by 25.8 and 56.9 per cent to US$3.17
billion and US$0.16 billion, respectively, below the
levels in the second half of 2022. The amount
utilised for transport, educational and business
services also decreased by 46.2, 37.3 and 13.1 per
cent, to US$0.17 billion, US$0.34 billion, and
US$0.46 billion, respectively, relative to the levels
in the second half of 2022.

Figure 3.6.13: Share of Sectoral Utilisation of Foreign
Exchange (Invisibles) in Per cent

Source: Central Bank of Nigeria


Nominal Effective Exchange Rate (NEER) and Real
Effective Exchange Rate (REER) Indices
The average 19-currency13 NEER index (November
2009=100) in the review period was 217.07 index
points, indicating a rise of 14.1 and 11.4 per cent,

13 China, India, USA, Netherlands, Brazil, Spain, France, South Africa,
Germany, UK, Japan, Cote d'Ivoire, South Korea, Indonesia, Belgium, Italy,
Ghana, Sweden, UAE
relative to the levels in the second and first halves
of 2022, respectively. The average REER index
(November
2009=100)
was
62.82
points,
representing a 4.7 per cent increase and 4.6 per
cent decrease, compared with the levels in the
second and first halves of 2022, respectively. The
indices reflected depreciation against the major
trading partners in the review period, which
suggested increased export competitiveness.

Figure 3.6.14: Nominal Effective Exchange Rate (NEER) and
Real Effective Exchange Rate (REER)

Source: Central Bank of Nigeria


BUSINESS
SERVICES,
3.36
COMMUNICATIO
N SERVICES, 0.99
EDUCATIONAL
SERVICES, 2.48
FINANCIAL
SERVICES, 23.02
OTHER SERVICES
NOT INCLUDED
ELSEWHERE, 1.15

2021H2
2022H1
2022H2
2023H1
NEER
REER

Section Four
OUTLOOK


Economic Outlook
• Global
Economy
• Real Domestic
Economy

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2023

4.1
GLOBAL ECONOMIC OUTLOOK
The global economic outlook for the rest of 2023
remains positive, owing to the easing supply chain
pressure, as shocks from the COVID-19 and RussiaUkraine war moderate. The prevailing tight
financial conditions, however, is expected to
suppress demand, resulting to slower growth,
particularly, in the AEs. Consequently, the IMF
projected the expansion of the global economy to
slow in 2023 at 3.0 per cent, below the prepandemic average of 3.8 per cent, and the 3.5 per
cent recorded in 2022.
In the Advanced Economies (AEs), rising credit
constraints and shrinking labour markets are
expected to drag output growth to 1.5 per cent in
2023, from 2.7 per cent in 2022. In the United
States, output is projected to slow to 1.8 per cent
in 2023 from 2.1 per cent in 2022, attributable to
the anticipated impact of tight monetary policy.
Growth in the euro area is projected to fall to 0.9
per cent in 2023 from 3.5 per cent in 2022. In the
UK, growth is expected to decline to 0.4 per cent
from 4.1 per cent in 2022 as households face
severe cost of living crisis. The German economy is
projected to slide into recession, contracting by 0.3
per cent, from 1.8 per cent growth in 2022.
In Emerging Markets and Developing Economies
(EMDEs), growth is projected to remain stable at
4.0 per cent in 2023. Anticipated recovery in China
would be driving growth. Thus, the Chinese
economy is projected to grow by 5.2 per cent from
3.0 per cent in 2022. Output in India is, however,
expected to decline to 6.1 per cent in 2023 from
7.2 per cent in the preceding year. At the regional
level, growth in the Middle East and Central Asia is
projected at 2.5 per cent in 2023 from 5.4 per cent
in 2022.

The outlook for sub-Saharan Africa is positive, with
growth projected at 3.5 per cent in 2023, a
decrease from the 3.9 per cent growth in 2022. The
projection for the region reflects the contagion
effects from advanced countries and the monetary
tightening.
Global headline inflation is projected to remain
elevated in 2023, though lower than the levels in
2022, due to lower energy prices and monetary
policy measures. Consequently, global headline
inflation is expected to decline from 8.7 per cent in
2022 to 6.8 per cent, with about three-quarters of
the global economies expected to experience
lower disinflation. However, the IMF projections
suggest that the inflationary pressure could
heighten further if international commodity prices
rise and central banks loosen their policy stance.
In the AEs, inflationary pressure is expected to
ease, reflecting the impact of the decline in energy
and commodity prices owing to the diminishing
effects of the Russia-Ukraine war. Thus, the
inflation rate in AEs is expected to decline to 4.6
per cent from 7.3 per cent in 2022. Within the
EMDEs, inflation is projected to continue to trend
downward, declining to 8.1 per cent from 9.9 per
cent in the preceding year.
Inflationary pressure could, however, rise further if
the labour market in the AEs remains tight and
wages rise. Also, any unexpected rise in energy and
food prices could make it more difficult to anchor
inflation expectations, which would require even
tighter monetary policy to tackle.

Country
Growth

2023f
2024f
Global
3.5
3.0
3.0
Advanced Economies
2.7
1.5
1.4
United States
2.1
1.8
1.0
United Kingdom
4.1
0.4
0.1
Japan
1.0
1.4
1.0
Germany
1.8
-0.3
1.3
Italy
3.7
1.1
0.9
Emerging Market & Developing
Economies
4.0
4.0
4.1
Russia
-2.1
1.5
1.3
China
3.0
5.2
4.5
India
7.2
6.1
6.3
Sub-Saharan Africa
3.9
3.5
4.1
South Africa
1.9
0.3
1.7
Nigeria
3.1
3.2
3.0
Source: IMF World Economic Outlook, 2023
Note: 2023f and 2024f are forecasts


Table 4.1: Economic Growth in Selected Countries


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Half Year Economic Report, 2021

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4.2
DOMESTIC ECONOMIC OUTLOOK
Nigeria’s output growth is expected to maintain a
positive trajectory for the rest of 2023. The
growth prospects are dependent on continued
policy support in the agriculture and oil sectors,
and reforms in the foreign exchange market.
Specifically, the Nigerian economy is estimated to
grow in 2023 by 2.79 per cent (CBN), 3.79 per cent
(FMBNP) and 3.20 per cent (IMF). The positive
outlook
is
predicated
on
the
effective
implementation of Finance Act 2023 and the
2022-2025 Medium-Term National Development
Plan (MTNDP), and the continued interventions by
the CBN in growth-enhancing sectors.

The risk to the outlook is still tilted to the
downside, characterised by significant headwinds
such as rising energy prices emanating from
lingering effects of the Russia-Ukraine war, and
the
persisting
security
and
infrastructural
challenges, which could undermine the growth
outlook in the short-to-medium-term.

Domestic prices are expected to remain elevated
through the second half of 2023. This is on the back
of spillovers from global supply constraints, and
exchange rate pass-through. More so, the
persisting security and infrastructural challenges
could exacerbate inflationary pressures.

Fiscal sector performance is expected to remain on a
positive recovery trajectory in the second half of 2023.
This outlook is contingent on the effective
implementation of the Finance Act 2023 and
restructuring of key revenue generating MDAs to
boost non-oil revenue. Low domestic crude oil
production, growing public debt, lingering
insecurity, global economic slowdown, and the
war in Ukraine, could, however, pose significant
downside risks to fiscal operations in the short- to
medium-term.

The financial sector is expected to remain resilient in
the second half of 2023. The outlook mirrors the
efforts of the CBN in continuously monitoring
emerging vulnerabilities and risks in the system,
including periodic stress-tests and examination
exercises, and the provision of risk mitigants.

The outlook for Nigeria’s external position is optimistic,
on the expectation of favourable terms of trade,
occasioned by sustained rally in crude oil prices and an
improvement in domestic crude oil production. The
positive outlook is supported by the sustenance of
crude oil price, propelled by the decision to cut
production from May, and gains from capital
flows and remittances. Lower crude oil earnings,
abolishing of fuel subsidy removal, rising import
bills and increased external debt servicing
obligations could, however, pose downside risks
to the accretion of external reserves. In addition,
the sustained monetary policy tightening by
central banks across advanced economies
increases the risk of capital outflow.


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Section Five
ADDITIONAL INFORMATION


INTERNATIONAL
MEETINGS
•Regional meetings
•Non-regional
meetiings


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5.1 REGIONAL MEETINGS
47th Meeting of the Technical Committee (TC) of the
West African Institute for Financial and Economic
Management (WAIFEM) was held in Banjul, The
Gambia, on 5 February 2023. The draft Minutes
of the 43rd Meeting of the Board of Governors,
held virtually on 25 August 2022, was considered
by the TC, and recommended for the Board’s
consideration and adoption. Highlights of the
Meeting included the need for:

•
Deliberate actions to ensure more female
participation in WAIFEM programmes,
following the observed gender imbalance
(31.3 per cent female participation);
•
Africa Capacity Building Foundation (ACBF)
to pilot the capacity building project for
Enhanced Leadership and Governance with
respect to Public Financial Management
(ELG-PFM) in five countries - Nigeria, Ghana,
Kenya, Zimbabwe and Senegal;
•
WAIFEM to foster close collaboration with
development partners, including joint training
programmes with the International Monetary
Fund (IMF), World Bank, African Regional
Technical Assistance Centre in West Africa
(AFRITAC West 2), Africa Training Institute (ATI),
and Macroeconomic and Financial Management
Institute (MEFMI) to promote cost-effectiveness
in service delivery;
•
WAIFEM to sustain discussion with the
African Development Bank (AfDB) and the
ACBF to fund training programmes on
emerging macroeconomic management,
leadership, and governance issues; and
•
Continuation
of
WAIFEM
face-to-face
training programmes, in addition to the
Hybrid (Blended Learning) format.

49th Meeting of the Convergence Council of
Ministers and Governors of Central Banks of the
West African Monetary Zone (WAMZ). The
Convergence Council (CC) of Ministers and
Governors of the Central Banks of the
Member States of the WAMZ held its 49th
Meeting in Banjul, The Gambia, on 10
February 2023. The Meeting deliberated on
the status of implementation of the WAMZ
work programme and activities under the
Economic Community of West African States
(ECOWAS) Single Currency Programme. The
Report of the 46th Meeting of the WAMZ’s
Committee of Governors (CoG) formed the
basis for the deliberations. Highlights of the
Meeting included:
•
Adoption
of
the
Macroeconomic
Developments and Convergence Report of
end-June 2022, the study on the “Optimal
Inflation-Growth Threshold: A Case of WAMZ
Member States”, and the roadmap for
adoption of inflation targeting;

•
The reduction of the financial burden on
Member States. The ECOWAS Commission
was advised to allocate resources to WAMI
and WAMA to carry out their roles as the
proposed 2027 deadline for the launching of
the ECOWAS Single Currency Programme
approaches;
•
The appropriateness of the current 5.0
per cent inflation threshold for the WAMZ
was questioned, on account of the inability of


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Member States to satisfy the criterion since
its adoption. Earlier studies had suggested an
optimal inflation threshold of about 10.0 per
cent for the Zone; and
•
WAMI was directed to update the
roadmap on inflation targeting and the preconditions set for Member States of the
WAMZ.

Second Dakar Financing Summit for Africa's
Infrastructure Development, Dakar, Senegal
The African Union Development Agency and
the Government of Senegal held the 2nd Dakar
Financing Summit for Africa's Infrastructure
Development in Dakar, Senegal, from 1 - 3
February 2023.
African Heads of government, the African
Development Bank, development finance
institutions, and institutional investors met to
articulate the modalities for implementing 69
infrastructure projects worth US$160 billion
for completion by 2030. The 69 projects fall
under the Programme for Infrastructure
Development in Africa (PIDA), a blueprint for
infrastructure
development
to
increase
Africa's
competitiveness
and
economic
integration. PIDA’s Priority Action Plan 2, was
adopted by the African Union Assembly of
Heads of State and Government in 2021.
Regional
bodies
and
unions
were
implementing the 69 projects in all five of
Africa’s regions. The projects included:
•
Trans-border Sub-marine Fiber point of
presence and Regional Smart Hub Facility and
Data Center project, which would provide
information and communication technology
connectivity to 285 million people in Ethiopia,
Kenya, Somalia, South Sudan, Tanzania, and
Uganda;
•
The Gambia River Basin Development
Organization (OMVG) Energy Project which
involves 4 countries, The Gambia, Guinea,
Guinea-Bissau, and Senegal. It focuses on the
rational management of the joint resources of
Rivers Gambia, Kayanga-Géba and KolibaCorubal,
whose
basins
have
powergenerating potential; and
•
Baynes Hydropower project, an energy
project that would benefit Angola, Botswana,
the Democratic Republic of the Congo,
Eswatini, Lesotho, Malawi, Mozambique,
Namibia, South Africa, Tanzania, Zambia, and
Zimbabwe.

36th Ordinary Session of the Assembly of the
African Union
The 36th Ordinary Summit of the African
Union (AU) was held in Addis Ababa, Ethiopia,
from 18 - 19 February 2023, with the theme
"The Year of African Continental Free Trade
Area (AfCFTA): Acceleration of the African
Continental
Free
Trade
Area
Implementation”. The deliberations at the
summit focused on the integration of Africa,
ensuring continental peace and security,
socio-economic
development,
rebuilding
Africa from the brunt of various health and
socio-economic crises, and strong African
representation in multi-lateral international


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institutions. The Heads of State and
Government considered, among others:
•
The
agenda,
draft
decisions,
and
declarations at the summit of the Assembly
for adoption, which were submitted by the
42nd Ordinary Session of the Executive
Council, held before the Summit on 15 and 16
February 2023;
•
The Institutional Reforms of the AU,
which was presented by President of the
Republic of Rwanda, H.E. Paul Kagame;
•
The activities of the Peace and Security
Council (PSC) and the state of peace and
security in Africa; and
•
The global political, financial, and energy
policy governance, presented by President of
the Republic of Senegal, H.E. Macky Sall, and
the global food crisis.

Regional Workshop of the Expert Committee on
the Harmonization of Regulatory and Supervisory
Framework for Banks and Non-Bank Financial
Institutions in ECOWAS was held in Freetown,
Sierra Leone, from 12 - 16 June 2023. The
objective was to validate the draft Model Act
for Banks and Financial Holdings Companies
for the ECOWAS region. Key highlights were:
•
The articulation of a model Banking Act
clarifying the terminology and ensuring its
consistent
application
across
legal
jurisdictions; and
•
The agreement to establish two subcommittees to review the structure of the
Model Act, and make recommendations
regarding the arrangement of the sections
and any other relevant adjustments.

Annual Meetings of the Board of Governors of the
African Development Bank Group. The 58th
Annual Meeting of the Board of Governors of
the African Development Bank and the 49th
Meeting of the Board of Governors of the
African Development Fund (the concessional
arm of the Bank Group) was held in Sharm El
Sheikh, Egypt, from 22 - 26 May 2023, with
the
theme
“Mobilising
Private
Sector
Financing for Climate and Green Growth in
Africa”.
The Meetings served as a forum to discuss
Africa's challenges in attracting private sector
financing in low-carbon investments and
practical policies that governments could use
to address the bottlenecks. It also served as a
platform to share experiences to stimulate
private
financing,
domestically
and
internationally, harness capital for climate
financing, and promote the transition to
green growth in Africa.
Joint Multilateral Surveillance Mission to Nigeria
by ECOWAS Commission, West African Monetary
Agency (WAMA), and West African Monetary
Institute (WAMI). The ECOWAS Commission,
WAMA, and WAMI conducted a Joint
Multilateral Surveillance Mission to Nigeria,
during the period 4 - 11 May 2023, to assess
the country’s macroeconomic developments
and status of convergence in 2022, as well as
the outlook for 2023 within the framework of
the
ECOWAS
Monetary
Cooperation
Programme.
The Mission noted that:


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•
The Nigerian economy is recovering,
driven by agriculture and services;
•
Inflationary
pressures
remained
elevated;
•
Revenue fell short of expenditure,
leading to the widening of the budget deficit
in 2022;
•
external sector performance improved,
as the current account deficit narrowed to
US$2,490.69 in 2023Q1, from US$2,348.31 in
2022Q4, respectively, despite the prevailing
global challenges; and
Nigeria met one of the four primary criteria
(gross external reserves) and both secondary
criteria under macroeconomic convergence.


4.2 NON-REGIONAL MEETINGS
The Intergovernmental Group of Twenty-Four
Technical Group Meeting. The Meeting was
held virtually from 23 February - 2 March
2023, with the theme “Challenges to
Structural Transformation
for
Emerging
Market and Developing Countries (EMDEs)”.
Discussions were centered on multiple issues
that create both long-term and immediate
policy challenges for the EMDEs.
The Virtual TGM sessions provided a forum
for
Member
countries
to
discuss
developments in key areas of concern and
formulate views that informed the positions
that the Group could articulate in global
discussions and its forthcoming Spring
Ministerial Communiqué.
Following extensive deliberations, the group
agreed on key actionable recommendations
as follows:
•
The setting up and implementation of
responsive country models in resource
allocation and operational efficiency;
•
Ensuring a decent transition that focuses
on sustainable and inclusive growth among
members;
•
Increased
transparency
in
the
enforcement of agreed benchmarks and
growth-enhancing financing options in the
World Bank Group operations;
•
Welcomed new deals that could aid
structural transformation, by shifting from
austerity to investment-led public spending,
progressive taxation, and tailored policies;


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•
Advocated capital efficiency among
member countries, and the need to play an
active role in defining ambition;
•
Called for caution among members in
promoting private financing mechanisms,
considering potential borrower costs and the
chronic deficiency of private development
finance;
•
Resolved
to
increase
capital
contribution, implement concrete actions,
ensure equitable burden sharing and financial
commitments; and
•
Ramped up Action Plan for Climate and
SDG Investment Mobilisation, in the short
term, leveraging on existing blended finance
transactions and funding with successful tract
records.

2023 Spring Meetings of the Board of
Governors of the International Monetary Fund
/ The World Bank Group, 10—16 April 2023.
The Meetings of the Board of Governors of
the
World
Bank
Group
(WBG),
the
International Monetary Fund (IMF) and the
Inter-Governmental Group of Twenty-Four
(G-24) on International Monetary Affairs and
Developments were held In-person and
virtually from April 10– 16, 2023. The Nigerian
delegation was led by the Honorable Minister
of Finance, Budget and National Planning,
Mrs. Zainab Ahmed. The sideline Meetings
included those of the International Monetary
and Finance Committee (IMFC) of the
Governors
of
IMF,
the
Development
Committee (DC) of the World Bank Group, as
well as the Meetings of the Ministers of the G24. The proceedings of the Meetings were;
The G24 Ministers:
•
Called for structural changes to prevent
further erosion of the Bank and Fund’s
legitimacy and reinvigorate multilateralism,
noting that, “Multilateralism can only exist
where there is expanded consultation
between
developed
and
developing
countries, the broader UN system and the
Bretton Woods Institutions for a more
balanced governance structure.”;
•
Expressed
concerns
that
more
concessional
lending
to
middle-income
countries due to the Bank’s shifting mandate,
could be at the expense of poorer countries,
the struggle to adequately replenish both the
Bank’s IDA and the Fund’s Poverty Reduction
and Growth Trust (PRGT) being an early
indication of this challenge;
•
Welcomed the establishment of a new
Loss and Damage Fund agreed at the 27th
United Nations Conference on Climate
Change (COP27) in November 2022, and
called on advanced economies to step up
their commitments;
•
Expressed concern on the increasing
risks to financial stability that could disrupt
economic recovery. Thus, in managing the
exit from accommodative macro-economic
policies, policymakers need to strike a
balance between containing surging inflation
and supporting economic recovery; and
•
Observed that Faster than expected
increases in interest rates in advanced
economies could raise rates globally and
trigger capital outflows from developing
countries, reducing access to financial


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markets,
and
further
increasing
debt
vulnerabilities.

The International Monetary and Financial
Committee (IMFC):
•
Condemned the war in Ukraine and
stressed that it is causing immense human
suffering and exacerbating existing fragilities
in the global economy - constraining growth,
increasing inflation, disrupting supply chains,
heightening energy and food insecurity, and
elevating financial stability risks;

•
Remained committed to the IMF’s policy
advice and analytical work on policies to
address
financial
sector
vulnerabilities,
contain inflation, tackle elevated debt levels,
and
the
impact
of
geo-economic
fragmentation; and
•
Welcomed the IMF’s strong policy and
financial support to low-income countries,
including those benefiting from the new
temporary food shock window and Poverty
Reduction and Growth Trust-supported
programs.
The Development Committee:
•
Highlighted process made on the
Evolution Roadmap of the World Bank Group
(WBG) and look forward to more work to
achieve major milestones during their
meeting in October 2023 in Marrakech. They
charged the Board of Executive Directors and
WBG management to finalize the work plan
with detailed actions to be taken;
•
Welcomed increased support for nature
and biodiversity, and other environmental
challenges and look forward to seeing
updates on the Gender Strategy and the midterm review of the Fragility, Conflict, and
Violence Strategy;
•
Recognized that Russia’s invasion of
Ukraine has continued to have massive
humanitarian
consequences
and
a
detrimental impact on the global economy
and called for continued economic support to
Ukraine and other countries affected by the
war;
•
Expressed their commitment to ensuring
that the WBG has adequate financial capacity
to respond to development challenges and
support its expanded mission. They strongly
reaffirmed their commitment to boosting the
WBG’s financial capacity, including through a
revision of IBRD’s (International Bank for
Reconstruction and Development) minimum
Equity-to-Loan Ratio to 19.0 per cent, a
Hybrid Capital pilot for capital-market
investors, and a scaled-up bilateral guarantee
program. They looked forward to seeing
updates from the Executive Directors on the
implementation of these initiatives, which
have the potential to add US$50.00 billion
additional financing capacity in the next ten
years;
•
Agreed to consider a proposal to remove
the Statutory Lending Limit (SLL) from the
Articles of Agreement;
•
Commended the WBG management and
staff for responding at scale to the
unanticipated crises, with historic surges in
development financing that have sustained
the fight against poverty. The WBG delivered


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a record US$330.00 billion during the last
three-and-a-half fiscal years;
•
Observed that the WBG was also the
world’s largest provider of climate finance to
developing countries in the last three-and-ahalf fiscal years, reaching almost US$90.00
billion, and has outlined its plan for alignment
with the Paris Agreement;
•
Expressed their deep appreciation to Mr.
David Malpass for his strong and steadfast
leadership of the WBG during a historically
challenging
period,
including
an
unprecedented surge in financing in response
to the multiple crises affecting global
development outcomes. They value his
commitment to the WBG mission, its strategic
goals
and
country-level
development
outcomes. They also commended his support
to staff, as well as his strong leadership, which
has made possible the many significant
accomplishments during his tenure; and
•
Reiterated
its
call
for
greater
international cooperation and strengthened
multilateralism to safeguard global economic
integration.