This document is for CBN internal consumption
CENTRAL BANK OF NIGERIA
ECONOMIC REPORT
Fourth Quarter

i
ABOUT THE REPORT
The Central Bank of Nigeria (CBN) Economic Report is a compilation and
analysis of economic developments in Nigeria within the review period. The
Report, which is published on a monthly and quarterly basis, provides
insights into the current developments in the real, fiscal, financial, and
external sectors of the Nigerian economy and the global economic
developments. It also reflects the policy initiatives of the Bank within the
period.
The Report is targeted at a wide spectrum of readers, including economists,
policymakers, financial analysts in government and the private sectors, and
the general public. Subscription to the Report is available without charge
to individuals, institutions, corporations, embassies, and development
agencies. Free copies of the Report, both current and past issues, can be
obtained from the CBN website: www.cbn.gov.ng. Please direct all
publications inquiries to the Director, Research Department, Central Bank
of Nigeria, P.M.B. 187, Garki, Abuja, Nigeria.
Contents

iii
Tables
Table 6: Federally-Collected Revenue and Distribution to the Three-Tiers
Table 11: Money and Credit Growth over preceding December (per cent)
Figures
Figure 8: Price Changes of some Selected Precious Metals (per cent), Q4
Figure 12: Top 15 Subsectors with largest Contribution to GDP and
Figure 13: Bottom Subsectors with Least Contribution to GDP Growth and
iv
Figure 29: Secondary Income Balance and Remittances Inflow (US$
Figure 31: Foreign Exchange Transactions through the Bank (US$ Billion),
Figure 32: Foreign Exchange Sales to Authorised Dealers (US$ billion) ...48
Box Information
1 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
EXECUTIVE SUMMARY
Recovery of global economic activities firmed up in the fourth quarter of 2021
on the back of rising consumer demand, and sustained policy support from
governments. The average global composite Purchasing Manager’s Index
(PMI), improved marginally to 54.53 points, from 53.87 points in the previous
quarter, reflecting global economic expansion, albeit at a slow pace. However,
the Pandemic-induced supply vs demand imbalances, higher energy, and
consumer prices continued to weigh down economic activities. Globally,
inflationary pressures persisted, as rising demand, supply chain disruptions, as
well as higher food and energy prices, pushed up inflation rates, leaving
monetary authorities with the challenge of supporting the fragile economic
recovery while containing the rising inflation.
Domestic economic recovery continued in the fourth quarter of 2021, though
at a slower pace, owing to the emergence of the Omicron variant of the COVID19 pandemic, which resulted in a re-introduction of partial lockdown measures.
Real GDP grew by 3.98 per cent in the fourth quarter of 2021 (year-on-year),
compared with 4.03 per cent in the preceding quarter. Inflationary pressures
continued to moderate in the review quarter, following the sustained
implementation of the government’s agricultural support schemes, which
buoyed agricultural output. Accordingly, headline inflation (year-on-year)
slowed to 15.63 per cent, from 16.63 per cent recorded in the third quarter of
2021. Also, food inflation dropped significantly to 17.37 per cent, from 19.57
per cent, although core inflation inched up to 13.87 per cent from 13.74 per
cent, owing to higher demand for gas, liquid fuel, utilities, and other household
consumables.
Federation receipts in the fourth quarter of 2021 declined, following shortfalls
in oil revenue. At N2,844.73 billion, provisional Federation receipts fell below
the quarterly benchmark and the level in the preceding quarter by 7.5 per cent
and 0.7 per cent, respectively. Non-oil revenue maintained its dominance,
accounting for 60.8 per cent of the total collections, while oil revenue
constituted the balance of 39.2 per cent. Provisional Federal Government of
Nigeria (FGN) retained revenue, at N1,265.34 billion, declined by 36.6 per cent
and 3.2 per cent, relative to the budget benchmark and the preceding quarter,
respectively, reflecting the persistent revenue challenge over the past two
years. Following a decline in aggregate expenditure in the fourth quarter of
2021, the fiscal deficit of the FGN contracted by 12.0 per cent to N2,232.33
billion, relative to the preceding quarter.
Financial conditions generally improved in the fourth quarter of 2021. The key
monetary aggregates exceeded their 2021 annual growth benchmarks,
reflecting the accommodative monetary policy stance of the Bank which
expanded credit to crucial sectors of the economy in a bid to strengthen
recovery. Broad money supply (M3) grew by 12.6 per cent at the end-December
2021, above the indicative benchmark of 9.99 per cent, driven, largely, by the
17.3 per cent increase in banking system claims on the domestic economy.
2 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
There was sustained improvement in banking system liquidity in the fourth
quarter of 2021, as reflected in a downward trend in key interest rates. In the
review period, Nigeria’s financial sector was stable, according to key financial
soundness indicators. Activities on the Nigerian Exchange Limited (NGX)
remained bullish, following sustained investors’ buying interest in blue-chip
stocks and repositioning ahead of full-year earnings results and dividend
declarations.
The external sector's performance slackened in the review period, despite rising
crude oil prices. The development was due, largely, to uncertainties
surrounding the emergence of the Omicron variant of COVID-19, which
weakened global demand and increased domestic demand pressure. Thus,
Nigeria’s external account recorded a deficit of US$1.34 billion, in contrast to a
surplus of US$5.28 billion in the preceding quarter. The current account surplus
moderated to US$2.43 billion, relative to US$3.68 billion due to higher import
bills for goods and services. The financial account recorded higher net
incurrence of financial liability of US$2.96 billion, relative to US$2.57 billion in
the preceding quarter. The external reserves, as at end-December 2021, was
US$40.23 billion, compared with US$41.57 billion at the end-September 2021.
The current level of external reserves could finance 10.2 months of goods or 7.7
months of goods and services imports. At the I&E window of the foreign
exchange market, the average naira exchange rate was relatively stable during
the review quarter.
Growth prospects for the Nigerian economy remain positive but fragile in the
near- term, on the back of a rebound in manufacturing activities, improvements
in vaccination rates, and supportive impact of CBN interventions on growthenhancing sectors. Staff projections indicate moderation in inflationary
pressures in the short-term due to the broad-based policy support to bolster
food security and catalyse dry season farming. The uptick in global economic
activities and fiscal reforms channelled towards revenue mobilisation are
expected to enhance the fiscal space. However, lingering security challenges
and the delayed implementation of the Petroleum Industry Act (PIA) are the
major downside risks to the outlook.
3 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
1.0
GLOBAL ECONOMIC DEVELOPMENTS
1.1
Global Economic Activities
Recovery of global economic activities firmed up in the fourth quarter of
2021, on the back of rising consumer demand, and sustained policy
support from governments. Consequently, the average J.P. Morgan
Global Composite Purchasing Manager’s Index (PMI) improved
marginally to 54.5 points in the fourth quarter of 2021, from 53.9 points
in the previous quarter (Table 1), reflecting global economic expansion,
albeit slowly. Expansion in economic activities was supported by both
the manufacturing and services sectors, which recorded gains in job
creation and new orders. Nonetheless, the pandemic-induced supply
gaps as well as rising energy, and consumer prices, continued to
depress economic activities.
Table 1: Global Purchasing Managers' Index (PMI)
2020Q4
2021Q3
2021Q4
Composite
53.0
53.9
54.5
Manufacturing
53.5
54.5
54.2
Services (Business Activity)
52.3
54.3
55.3
Employment Level
51.2
51.9
52.6
Source: IHS Markit, JP Morgan
Due to the increased spread of the Omicron variant during the quarter,
most Advanced Economies (AEs) observed a slight decline in economic
activities. Specifically, the PMIs in most AEs dipped in the fourth quarter
of 2021, though they remained above the 50-point threshold, signifying
a deceleration in economic activities. In the United States, the
composite PMI moderated to 58.13 index point, from 61.7 index point
in the preceding quarter, due to decline in factory activities, amid
worsening vendor performance. Similarly, the PMIs in Germany and
Italy declined to 57.5 index points and 61.9 index points, respectively,
compared with 62.3 index points and 60.3 index points, in the third
quarter. However, there was an improvement in Japan’s economic
activities, as composite PMI rose to 54.0 index point, from 52.4 index
points cent in the third quarter, due to improvement in business
conditions, following widespread vaccination.
Global Economic
Conditions
Economic Activity in
Advanced
Economies
4 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 1: Selected Advanced Economies PMIs
Source: Trading Economics/Various Country Websites, CBN Staff compilation.
Note: US, UK, GM, IT, JP represent United States, United Kingdom, Germany, Italy,
Japan, respectively.
Recovery in Emerging Markets and Developing Economies (EMDEs)
remained fragile due to low vaccine rollout, rising inflation, and limited
fiscal space, especially among countries with high debt profiles. In
China, the composite PMI improved to 50.5 index points, from 49.8
index points in the preceding quarter, due to growth in the services
sector and the general improvement in business conditions, following
a sharp cut in coal prices by the government. Likewise, India recorded
expansion in economic activities, reflected by the rise in PMI to 56.3
index points, from 53.8 index points, as production and foreign sales
firmed up. However, economic activities in South Africa remained tepid
due to the spike in the COVID-19 caseload. The composite PMI
improved marginally to 49.6 index points, from 48.9 index points in the
preceding quarter. Turkey's economic activities declined marginally to
51.8 index points, from 53.5 index points, due to the slowdown of new
orders and output, attributed to soaring prices and supply-chain
disruptions.


US
UK
GM
IT
JP
2021Q2
2021Q3
2021Q4
50-Point Threshold
Economic Activity
in Emerging and
Developing
Economies
5 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 2: PMI in Selected EMDEs
Source: Trading Economics/Various countries’ websites, CBN Staff compilation
Note: CHN, IND, TUR, SA and NG represent China, India, Turkey, South Africa
and Nigeria, respectively.
1.2
Global Inflation
Globally, inflation continued to rise in many countries, as rebound in
consumer demand, supply shortages, and higher food and energy
prices intensified. In most AEs, headline inflation remained above their
respective central banks’ targets, and the levels in the previous quarter.
This was worsened by the increase in business costs in sectors, with
persistent labour shortages drove up consumer prices. Also, the
discovery of the Omicron variant and the resurging wave of COVID-19
cases triggered uncertainties that accelerated consumer demand and
deepened supply shortages. In the US, headline inflation rose to an
average of 6.67 per cent in the fourth quarter of 2021, from 5.34 per
cent in the third quarter of 2021. The spike came, majorly, from price
increases in consumer durable goods, especially housing, used cars,
and trucks.
Consumer prices in Germany accelerated, as inflation rate rose to 5.01
per cent, from 3.90 per cent in the preceding quarter, due to the
continuing surge in energy prices, raw material shortages, and supply
bottleneck. Similarly, in the UK, the inflation rate rose sharply to 4.70
per cent, from 2.70 per cent in the preceding quarter of 2021. The
inflationary pressure was triggered by the rise in food prices, nonalcoholic beverages, and household goods. Japan’s elevated inflation
was precipitated by the sharp rise in food prices, housing cost, and


CHN
IND
TUR
SA
NG
2021Q2
2021Q3
2021Q4
50-point threshold
Global
Inflation
6 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
increase in raw materials costs. Consequently, inflation averaged 0.50
per cent in the fourth quarter of 2021, vis-à-vis -0.17 per cent in the
preceding quarter.
Figure 3: Inflation Rates in Selected Advanced Economies (per cent)
Source: OECD
Note: US, UK, JP, CDN, GM, FRN and IT represent United States, United Kingdom,
Japan, Canada, Germany, France, and Italy, respectively.
In EMDEs, most countries witnessed an upward inflation trend during
the quarter. China’s inflation rose to 1.77 per cent in the fourth quarter
of 2021, from 1.00 per cent in the preceding quarter, attributed to the
rise in demand amidst supply-side constraints. In India, headline
inflation increased to 4.99 per cent, from 4.82 per cent, following
higher prices of food, clothing, and footwear. Also, in Mexico, prices
edged up to 6.99 per cent, from 5.80 per cent reflecting heightening
prices of fresh food products, non-alcoholic beverages, transportation,
furniture, and household maintenance. South Africa’s headline inflation
rose to 5.48 per cent, compared with 4.93 per cent in the previous
quarter, emanating from increased transportation costs amidst hikes in
fuel price.


US
UK
JP
CDN
GM
FRN
IT
2020Q4
2021Q3
2021Q4
7 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 4: Inflation Rates in Selected EMDEs (per cent)
Source: OECD
Note: CHN, IND, IN, MEX, TUR and SA represent China, India, Indonesia,
Mexico, Turkey, and South Africa, respectively.
1.3
Global Financial Markets
The performance of financial markets across the globe was largely
positive, due to continuing economic recovery and strong corporate
profit
growth,
resulting
from
improved
COVID-19
vaccine
administration. Major equity indices in AEs staged a year-end upswing
despite
a
weaker
November.
However,
Emerging
Market's
performance in the fourth quarter remained mixed. In the US, the
NASDAQ, S&P 500, and Dow Jones stocks closed higher at 10.65 per
cent, 11.09 per cent, and 7.37 per cent, respectively, compared to their
levels at the preceding quarter. Equities rose as the fears over Omicron
and Federal Reserve’s assets tapering subsided. In Europe, the UK
FTSE100 and the EURO STOXX gained 4.21 per cent and 6.18 per cent,
respectively. Within the EMDEs, the Nigerian NSE, South African JSE,
and Egyptian EGX Case 30 indices increased by 7.1 per cent, 14.4 per
cent, and 13.6 per cent, respectively.

CHN
IND
IN
MEX
TUR
SA
2020Q4
2021Q3
2021Q4
Global Financial
Markets
8 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 5: Global Stock Market Equity Indices
Source: Bloomberg
Yields on 10-year government bond in most AEs remained largely
unchanged in the fourth quarter of 2021. The US 10-year Treasury yield
for the quarter rose, marginally, to 1.51 per cent, from 1.49 per cent,
as sentiment improved especially in the final weeks of the period.
Similarly, Germany’s 10-year bond yield rose slightly, from -0.21 per
cent to -0.19 per cent, due to the late sell-off of assets. In the UK,
however, 10-year yield declined to 0.97 per cent from 1.02 per cent1.
Within the EMDEs, local currency bond yields exhibited mixed
movements in the fourth quarter in response to central bank actions.
In Brazil, the 10-year bond yield rose to 4.47 per cent, from 4.24 per
cent, as the central bank embarked on an aggressive monetary
tightening cycle to tame double-digit inflation. 10-year bond yield,
however, fell to 2.7 per cent in China, the lowest level since June 2020,
as interbank borrowing costs fell after the central bank boosted shortterm liquidity.
1 Due to rates hike by the Bank of England

S&P 500
FTSE100
NASDAQ
DOW JONES
SX5E
DAX
NIKKEI
TOPIX
EGX Case 30
JSE ASI
NGSE ASI
as at Sep. 30
as at Dec. 31
9 | P a g e Central Bank ofNigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 6: 10-Year Government Bond Yields, 2021Q3 and 2021Q4
Source: Bloomberg data
1.4
Central Banks’ Policy Rates
Monetary Authorities continued to face the challenge of rising inflation,
as they struggled to prop fragile economic recovery from the pandemic.
Most monetary policy stances remained dovish, with policy rates
largely unchanged during the quarter. However, while the Fed has
indicated the likelihood of hiking policy rate for the first time in three
years and reducing its asset holding, the Bank of England raised the
benchmark interest rate by 0.15 percentage points during the quarter.
To curtail the raging inflation, the Bank of Mexico continued to
reinforce its monetary tightening during the quarter, raising the rates
by a cumulative 75 bps, from 4.75 per cent to 5.5 per cent. Conversely,
the Central Bank of Turkey continued its easing policy, reducing the
one-week repo rate by a total of 400 bps; bringing down the rate to
14.00 per cent, from 18.00 per cent in the preceding quarter, as the
Bank moved to unorthodox inflation policy measures.
-1

Per cent (%)
2021Q3
2021Q4
10 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Table 2: Central Bank Policy Rates (per cent)
Country
2021Q1
2021Q2
2021Q3
2021Q4
United States

United Kingdom

Japan

Canada

Euro Area

China

India

Mexico

Indonesia

Turkey

South Africa

Ghana

Nigeria

Source: Various Central Banks’ websites.
1.5
Global Oil Market
Spot prices of crude oil rose significantly, due to the recovery in global
demand and OPEC+ decision to remain cautious with output increases.
The average spot price of Nigeria’s reference crude oil, the Bonny Light
(34.9° API), was US$80.44 per barrel (pb) in the fourth quarter of 2021,
representing an increase of 9.0 per cent, compared with US$73.78 pb
recorded in the preceding quarter. The prices of Brent, at US$80.16 pb,
Forcados, at US$80.33 pb and WTI, at US$77.86 pb, and OPEC
Reference Basket (ORB) at US$79.32 pb, exhibited similar upward
movements (Figure 7).
Figure 7: Trends in Crude Oil Prices
Source: Refinitiv Eikon (Thomson Reuters)

Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021
US$ Per Barrel
BRENT
BONNY
FORCADOS
OPEC B
WTI
World Crude
Oil Prices
11 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
The ascent in crude oil prices was attributed, largely, to the rebound in
global oil demand, as economic activities firmed up, coupled with
OPEC+ decision to remain cautious with further ease in production2.
Furthermore, the persistent energy supply challenges across Europe
and rising energy demand, following falling temperatures in China, as
winter approaches, also contributed to the pressure on crude oil prices.
World crude oil supply in the fourth quarter of 2021 was 98.77 mbpd,
an increase of 2.3 per cent, compared with 96.55 mbpd, recorded in
the preceding quarter. The increase was largely from non-OECD
countries, where supply increased by 1.10 mbpd to 66.54 mbpd, from
65.44 mbpd in the preceding quarter.
Similarly, OPEC’s aggregate supply, including non-crude and other
liquids, increased by 0.94 mbpd or 2.9 per cent, to an average of 33.15
mbpd in the fourth quarter of 2021, compared with 32.21 mbpd
recorded in the preceding quarter. OPEC’s aggregate supply was driven,
largely, by OPEC’s crude oil portion, which increased by 3.2 mbpd.
World crude oil demand increased by 1.7 per cent to 99.60 mbpd in the
fourth quarter of 2021, from 97.91 mbpd recorded in the preceding
period. The development was, driven, largely, by the increase in
demand from non-OECD countries, which rose by 1.24 mbpd to 53.72
mbpd.
Overall, the global crude oil market recorded a supply deficit of 0.83
mbpd in the fourth quarter of 2021, compared with a 1.36 mbpd deficit
in the preceding quarter.
1.6
Global Commodity Market Developments
The prices of most of the selected export commodities monitored
increased, on the back of firmer demand and tighter supplies. The price
indices of cotton, palm oil, wheat, coffee, rubber, groundnut, and cocoa
increased by 24.5 per cent, 21.5 per cent, 18.0 per cent, 10.9 per cent,
6.5 per cent, 5.2 per cent, and 1.2 per cent, respectively. Extreme
weather conditions, pest attacks, and logistic challenges continued to
enflame the price of cotton. In the US, heatwaves affected its
production, while yield in India was hampered by pink bollworm
attacks. Similarly, wheat export constraints in major producing
countries (US, Russia and Argentina) continued to constrain supplies
globally and exacerbates excess demand.
2 OPEC and non-OPEC participating countries in the Declaration of Cooperation (DoC) had agreed to adjust upward the overall
production level by 0.4 mbpd on a monthly basis, with effect from August 2021.
Agricultural
Commodity
Prices
World Crude
Oil Supply
and Demand
12 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Furthermore, labour shortages, flooding, and COVID-19-induced
logistic challenges, especially in Malaysia, amplified palm oil prices. For
coffee, adverse weather conditions, global supply constraints, and
uncertainty stemming from exporting countries, such as Ethiopia,
affected price dynamics.
On the other hand, the price index for soybeans decreased by 6.2 per
cent, compared to the previous quarter, owing to a bumper harvest in
the US and favourable weather conditions in Brazil.
Table 3: Selected Agricultural Export Commodities
INDICES OF AVERAGE WORLD PRICES OF NIGERIA'S MAJOR
AGRICULTURAL EXPORT COMMODITIES FOR FOURTH QUARTER 2021 (DOLLAR BASED) (JAN.
2010=100)
COMMODITY
2020Q4/1
2021Q3/1
2021Q4/2
% Change
(1) & (3)
(2) & (3)

Cocoa

Cotton

Coffee

Wheat

Rubber

Groundnut

Palm Oil

Soya Beans

Sources: (1) World Bank Pink Sheet (2) Staff Estimates
There was a general decline in the prices of other mineral commodities,
although gold prices increased. Average spot prices of silver, platinum,
and palladium was US$23.33 per oz, US$996.60 per oz, and
US$1,943.32 per oz in the fourth quarter of 2021, representing declines
of 3.9 per cent, 2.4 per cent, and 20.7 per cent, respectively, relative to
their levels in the preceding quarter. The decline reflected the fall in
demand, especially from car manufacturing companies and prospects
of electric vehicles replacing gasoline-powered cars.
Conversely, the average spot price of gold rose 0.3 per cent, to
US$1,795.67 per ounce (oz), from US$1,789.69 per oz (Figure 8). The
increase in the price of gold was attributed to a weaker dollar and falling
US Treasury yields.
Other Mineral
Commodities
13 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 8: Price Changes of some Selected Precious Metals (per cent), Q4 2021
Source: Refinitiv Eikon (Thomson Reuters)
The performance of emerging market currencies against the US dollar
was mixed during the review period. The Russian ruble and Chinese
RMB appreciated by 1.4 per cent and 1.2 per cent, respectively, relative
to the levels in the preceding quarter. However, the South African rand
and Nigerian naira depreciated against the dollar by 5.3 per cent and
0.14 per cent, in the fourth quarter of 2021, respectively.
Figure 9: EMEs Currency Values to the US dollar
Source: Central Bank Nigeria & Reuters

Gold
Silver
Platinum
Palladium
with preceding quarter
with corresponding quarter

Chinese RMB
Nigerian Naira
South African
Rand
Russian Ruble
Depreciation/Appreciation
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Emerging Market
Currencies
14 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Table 4: EMEs Currency Rates to the US dollar
Sources: Central Bank of Nigeria & Reuters
Period
Chinese
RMB
Nigerian
Naira
South
African
Rand
Russian
Ruble
2020 Q4

2021 Q3

2021 Q4

15 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.0
DOMESTIC ECONOMIC DEVELOPMENTS
2.1
REAL SECTOR DEVELOPMENTS
2.1.1.
Domestic Output and Business Activities
The economy recorded output growth, for the fifth consecutive quarter,
as sustained fiscal and monetary supports propelled improvements in
economic activities. Real GDP grew by 3.98 per cent in the fourth
quarter of 2021 (y-o-y), compared with 4.03 per cent in the preceding
quarter. This development indicated a steady recovery of the economy
from the unsavory effects of the COVID-19 pandemic that begun in
2020. Quarter-on-quarter GDP growth rate at 9.63 per cent, signified
the continued improvement in the performance of the economy.
Growth in the period was driven, largely, by the non-oil sector,
(especially services and agriculture sectors) which contributed 4.46
percentage points to overall GDP growth relative to 4.97 percentage
points in the third quarter of 2021. The non-oil sector sustained its
growth momentum, expanding by 4.73 per cent, in the fourth quarter
of 2021, compared with 5.44 per cent, in the previous quarter. This
development reflected the rebound in economic activities, following
sustained policy support to the real sector, such as Anchor Borrower’s
Programme (ABP), Commercial Agriculture Credit Scheme, and Real
Sector Support Facility (RSSF), among others.
The oil sector continued to retard overall growth after recording a
negative
(0.47
percentage
point)
contribution.
The
negative
contribution of the oil sector was due to the lower volume of crude oil
output3, which fell to 1.45 mbd (less condensates) in the fourth quarter
of 2021, compared with 1.52 mbd produced in the fourth quarter of
2020.
3 This was attributed to supply disruptions following malfunctioning
barge that obstructed tanker path and pipeline leakages due to aging
infrastructure.
Domestic
Output
16 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 10: Real GDP Growth Rate, 2020Q1-2021Q4
Source: National Bureau of Statistics (NBS)
Sectoral Performance
The services and agriculture sectors grew, in real terms, in the fourth
quarter of 2021, while the industry sector dipped, owing to the
contraction of some activity sectors. The services sector contributed the
most (3.03 per cent) to the growth in overall output, growing by 5.58
per cent (y-on-y), though, slower than the growth rate of 8.41 per cent
in the previous quarter.
Figure 11: Sectoral Growth Rates of Real GDP, 2020Q1-2021Q4
Source: National Bureau of Statistics (NBS)
The performance of the services sector was driven, mainly, by trade,
ICT, finance, and transportation subsectors, which grew by 5.34 per
cent, 5.03 per cent, 24.14 per cent, and 29.72 per cent, respectively.

2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4
Per cent (%)
Oil GDP
Non-oil GDP

2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4
Per cent (%)
Agriculture
Industry
Services
GDP
17 | P a g e CentralBank of Nigeria Economic Report
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ECONOMIC REPORT, FOURTH QUARTER 2021
The agriculture sector recorded 3.58 per cent, growth in the fourth
quarter of 2021, the highest recorded by the sector in 2021, compared
with 1.22 per cent in the preceding quarter. The development was due
to sustained policy support (especially crop production) and robust
demand for end-of-year festivities. Thus, crop production, livestock,
forestry, and fishery subsectors grew by 3.87 per cent, 0.41 per cent,
1.41 per cent, and 1.69 per cent, compared to 1.36 per cent, 0.12 per
cent, 1.98 per cent, and -3.97 per cent, respectively, in the third quarter
of 2021.
The industry sector continued to record weak performance, contracting
further by 0.05 per cent in the fourth quarter of 2021, compared with
a contraction of 1.23 per cent and 1.63 per cent, recorded in the second
and third quarters of 2021, respectively. This reflected the poor
performance of the mining and quarrying
and the manufacturing
subsectors, occasioned by the contraction in oil refining, wood & wood
products,
pulp, paper & paper products, and textile, apparel &
footwear, which contracted by 43.94 per cent, 4.82 per cent, 3.33 per
cent and 2.37 per cent, respectively. Though the crude petroleum &
natural gas subsector remained in the contraction region, its
performance improved as its contraction narrowed to 8.06 per cent, in
the third quarter of 2021, from 10.73 per cent, in the previous.
Figure 12: Top 15 Subsectors with largest Contribution to GDP and Growth
Rates
Note: Figures in bracket represent the growth rates, while the ones at each bar indicate their
contribution to GDP growth
Source: CBN Staff Computation using data from National Bureau of Statistics (NBS)

(28.84%) Water supply, sewage, waste...
(63.05%) Air Transport
(5.49%) Cement
(1.50%) Professional, Scientific &...
(1.63%) Other Services
(4.08%) Broadcasting
(42.92%) Quarrying and Other Minerals
(1.47%) Real Estate
(3.46%) Construction
(4.84%) Food, Beverage and Tobacco
(30.39%) Road Transport
(5.31%) Telecommunications and...
(25.19%) Financial Institutions
(5.34%) Trade
(3.87%) Crop Production
18 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 13: Bottom Subsectors with Least Contribution to GDP Growth and
their Growth Rates
Note: Figures in bracket represent the growth rates, while the ones at each bar indicate their
contribution to GDP growth
Source: CBN Staff Computation using data from National Bureau of Statistics (NBS)
2.1.2.
Index of Industrial Production
The decline in manufacturing and mining activities impinged industrial
production. The index of Industrial Production in the fourth quarter of
2021, at 90.0 (2010=100), indicated a 13.8 per cent decrease, from
104.4 points in the preceding quarter. The development was due to
rising input costs, which slowed the pace of activities in the
manufacturing sub-sector.
In addition, a malfunctioning barge that obstructed a tanker path, led
to a decline in mining activities. This was complicated by the spread of
the Omicron variant of the COVID-19 pandemic, foreign exchange
shortage, as well as supply chain constraints, which continued to
threaten business activities.
The manufacturing production index decreased to 184.8 (2010=100) in
the fourth quarter of 2021, showing a fall of 0.7 per cent, compared
with 186.1 points recorded in the preceding period. Similarly, Capacity
utilisation declined to 55.1 per cent, a fall of 0.8 percentage points from
the preceding quarter. The decline in manufacturing activities was
majorly attributed to the poor performance of the Cement subsector
within the period, following the rising cost of production and high
inventory from the third quarter.
The mining production index in the fourth quarter of 2021, at 46.5
(2010=100) index points, decreased by 31.1 per cent, compared with
67.5 index points in the preceding period. The decline in mining

Pulp, Paper and Paper Products (-3.33%)
Wood and Wood Products (-4.82%)
Oil Refining (-43.94%)
Textile, Apparel and Footwear (-2.37%)
Crude Petroleum and Natural Gas (-8.06%)
Manufacturing
Mining
Industrial
Production
19 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
activities was attributed, largely, to the fall in crude oil and gas
production, as the shutdown of some oil production infrastructures and
maintenance activities occurred.
2.1.3.
Consumer Prices
Sustained
implementation
of
government’s
agricultural
support
schemes positively impacted agricultural output and food supply chain,
thus, moderating inflationary pressures in the fourth quarter of 2021.
Headline inflation (y-o-y) slowed to 15.63 per cent in the fourth quarter
of 2021, compared with 16.63 per cent in the preceding quarter.
Figure 14: Headline, Food and Core Inflation (y-o-y)
Source: National Bureau of Statistics (NBS)
Food inflation moderated to 17.37 per cent (y-o-y) in the fourth quarter
of 2021, compared with 19.57 per cent in the preceding quarter. The
decrease in food inflation was driven by better agricultural output,
owing to the increased harvest of maturing crops and the continued
impact of the various CBN intervention programmes.
However, core inflation inched up to 13.87 per cent in the fourth
quarter of 2021, compared with 13.74 per cent in the preceding
quarter. The rise in core inflation was attributed to higher demand for
gas, liquid fuel, wine, actual and imputed rentals for housing, tobacco,
spirit, cleaning, repair, and hire of clothing, garments, shoes, and other
footwear and clothing materials.

2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4
Percent (%)
Headline
Core
Food
Headline
Inflation
Food
Inflation
Core
Inflation
20 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.1.4.
Crude Oil Market Developments
Domestic crude oil production and export declined in the fourth quarter
of 2021 due to the force majeure declared on Forcados crude by Shell.
Nigeria’s crude oil production averaged 1.45 million barrels per day
(mbpd) (less Condensates) in the fourth quarter, a decrease of 0.68
percent, compared with the 1.46 mbpd produced in the previous
quarter. Crude oil export averaged 0.96 mbpd, representing a decrease
of 1.98 per cent compared with 1.01 mbpd recorded in the previous
quarter. The crude oil production fell as Shell declared force majeure
on Forcados crude after a malfunctioning barge obstructed a tanker
path.
2.1.5
Energy Sector
The upgrade of transmission infrastructure under the Presidential
Power Initiative and the continuous metering of households under the
National Mass Metering Programme (NMMP) have positively impacted
electricity generation and distribution.
The average electricity generation stood at 4,379.11 MW/h in the
fourth quarter of 2021, an increase of 11.2 per cent relative to the level
Electricity
Generation &
Consumption
Crude Oil Production
and Export
Box Information 1: Domestic Food Prices
Domestic food prices maintained a downward trend in
the fourth quarter of 2021.
Provisional data from the National Bureau of Statistics
(NBS) showed that the prices of major domestic food
commodities decreased during the review period. The
decrease ranged from 0.1 per cent for rice (agric.) to 17.5
per cent for tomato. Other commodities that recorded
price decreases were gari (white), gari (yellow), maize
(yellow), beans (brown) and sweet potato which decreased
by 12.8 per cent, 8.2 per cent, 4.3 per cent, 3.6 per cent,
and 3.3 per cent, respectively. The price developments
were influenced by improved supply of commodities due to
the ongoing harvest season. However, the prices of palm
oil, vegetable oil, groundnut oil, wheat flour, and egg
increased by 13.2 per cent, 10.8 per cent, 8.6 per cent, 8.1
per cent, and 6.8 per cent, respectively, compared to the
previous quarter.
21 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
in the preceding quarter. Equally, average electricity consumption in
the fourth quarter of 2021 was 3,408.65 MW/h, indicating an increase
of 5.6 per cent relative to the preceding quarter.
2.1.6
Development Financing
The Bank’s interventions in the real sector towards sustaining recovery
of output growth continued in the fourth quarter of 2021. A total of
N561.24 billion was expended as interventions on the economy's
critical sectors as of December 17, 2021. The energy/infrastructure
sector received the highest disbursements of N297.8 billion of the total
sum. This was followed by the industrial, agricultural, MSMEs, and
health sectors with N151.9, N77.8, N33.3, and N0.5 billion, respectively.
Table 5: Intervention Funds, as at December 17, 2021
Sector
17-Dec
Cumulative
Disburse
(N'bn)
Share
(%)
Beneficiaries
Disburse.
(N'bn)
Share
(%)
Repaymen
ts (N'bn)
Beneficiaries
Agriculture

Anchor Borrowers'
Programme
75.99
13.54
N.A

farmers
N200 Billion Commercial
Agricultural Credit Scheme
(CACS)
1.76
0.32
N.A
716.02
13.91
10.39
663 projects
Energy/Infrastructure

Nigeria Electricity Market
Stabilization Facility 2
(NEMSF 2)

Nigeria Bulk Electricity
Trading-Payment
Assurance Facility (NBETPAF)

1 project
National Mass Metering
Programme (NMMP)
2.89
0.51
Procurement
and Installation
of 25,489
meters

MSMEs

Agribusiness/Small and
Medium Enterprises
Investment Scheme
(AGSMEIS)
12.99
2.31
N.A
134.63
2.62
37,571
Targeted Credit Facility
(TCF)
20.28
3.61
N.A

Industries

COVID-19 Intervention
Facility for the
Manufacturing Sector
(CIFMS)


RSSF Using Differentiated
Cash Reserve Ratio (RSSFDCRR)


Health

Health Care Sector
Intervention Fund (HSIF)


Total
561.24

5148.36

Source: Central Bank of Nigeria
Development
Financing
22 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.1.7.
Socio-Economic Developments
Vaccination against COVID-19 infections continued amid the outbreak
of the Omicron variant. Available data4 showed that 9.2 per cent of the
eligible target population (a total of 10,457,893 persons) had received
the first dose of the COVID-19 vaccine at end-December 2021, while
about 4.0 per cent of the targeted population (a total of 4,515,006
eligible persons) had received the second dose.
However, figures from the National Centre for Disease Control (NCDC)
showed that at end-December 2021, the cumulative number of
confirmed cases in the country rose by 17.8 per cent, compared with
22.8 per cent in the preceding quarter. Although the rate of growth has
been slower than the preceding quarter, the increase in incidence cases
was due to the new Omicron variant of the Covid-19 virus, which was
first discovered on December 1, 2021, in the country, as well as the lax
compliance to COVID-19 protocols during the end of year festivities.
The number of discharged cases rose by 10.7 per cent, compared with
17.9 per cent at the end of the third quarter of 2021. Furthermore, the
number of deaths rose by 11.4 per cent, compared with 28.3 per cent
in the preceding quarter, while the number of active cases rose by
165.3 per cent, compared with 651.83 per in the preceding quarter.
Figure 15: Quarterly Covid-19 Statistics5 (per cent)
Source: National Centre for Disease Control (NCDC)
4 National Primary Health Care Development Agency (NPHCDA)
5 COVID-19 data as at December 31, 2021.

2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
Quarterly change in No. of Total Confirmed Cases
Quarterly change in No. of Discharged Cases
Quarterly change in No. of Death Toll
Health: COVID-19
Update
23 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.2
FISCAL SECTOR DEVELOPMENTS
On the back of tepid oil receipts and persisting revenue challenge,
provisional federally collected revenue in the fourth quarter of 2021 was
lower than the quarterly target and receipts in the preceding quarter by
7.5 per cent and 0.7 per cent, respectively. Retained revenue of the
Federal Government of Nigeria (FGN) declined by 3.2 per cent, relative
to third-quarter earnings, while spending dropped by 8.8 per cent.
Consequently, provisional fiscal deficits narrowed by 12.0 per cent,
compared with the preceding quarter. The debt profile of the FGN
remained elevated but aligned with the 2021 debt strategy.
2.2.1.
Federation Account Operations
Federation receipts in the fourth quarter of 2021 declined, following
shortfalls in oil revenue. At N2,844.73 billion, provisional Federation
receipts fell below the quarterly benchmark and the level in the
preceding quarter by 7.5 per cent and 0.7 per cent, respectively. The
shortfalls were largely the result of poor performances in some oil
revenue components. Non-oil maintained its dominance of gross
Federation receipts in the period, accounting for 60.8 per cent of the
total collections, while oil revenue constituted the balance of 39.2 per
cent. This is a deviation from the 51:49 non-oil versus oil revenue mix,
projected in the 2021 budget.
At N1,115.57 billion, oil revenue was below the collections in the
budget benchmark and the preceding quarter by 26.5 per cent and 2.5
per cent, respectively. Relative to the budget, all components of oil
revenue (excluding PPT & Royalties) declined, reflecting the effects of
structural encumbrances (including force majeure and pipeline
vandalism) unrelated to oil price developments.
Provisional data indicated that non-oil receipts, at N1,729.56 billion,
was 0.5 per cent above the earnings in the preceding quarter. The
increase was driven by a 42.4 per cent rise in FG Independent Revenue
collection, much so that the decline in CIT collections could not dampen
revenue performance in the period under review. Growth in FG
Independent Revenue was indicative of the seasonality effect
associated with the payment of operating surplus by MDAs.
Lower Federation collections in the fourth quarter of 2021, caused
disbursements to the three tiers of government to fall to N2,087.82
billion, from N2,140.77 billion in the third quarter of 2021. The lower
disbursement was due to the increased statutory deductions of
N917.82 billion in the fourth quarter of 2021, compared with N733.03
billion in the third quarter of 2021. Consequently, the sums of N847.04
billion, N764.86 billion, and N475.91 billion were allocated to the
Federal, State, and Local governments, respectively.
Summary
Drivers of Federation
Revenue
Federation Revenue
Distribution
24 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Table 6: Federally-Collected Revenue and Distribution to the Three-Tiers of
Government (N billion)
2020Q4
preceding
quarter
fourth
quarter
of 2021
1/
Budgeted
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 Revenue

Less Deductions & Transfers**
plus:
Additional Revenue

Excess Crude Revenue

Non-oil Excess Revenue

Exchange Gain

Total Distributed Balance

Federal Government

Statutory

VAT

State Government

Statutory

VAT

13% Derivation

Local Government

Statutory

VAT

Source: OAGF and CBN Staff Estimates
Note:
1/ Provisional, * Includes Education Tax, Customs Special Levies (Federation Account),
National Technology Development, Customs Special Levies, Solid Mineral & Other Mining revenue,
and other Non-regular earnings. ** Deductions includes cost of revenue collections and JVC cash
calls, while transfers entails, provisions for FGN Independent revenue and other Non-Federation
revenue.
25 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.2.2.
Fiscal Operations of the Federal Government
FGN retained revenue declined due to shortfalls in the receipt from
Federation account sources. At N1,265.34 billion6, provisional retained
revenue of the FGN declined by 36.6 per cent and 3.2 per cent, relative
to the budget benchmark and the preceding quarter, respectively,
reflecting the subsisting revenue challenge over the past two years.
Table 7: FGN Retained Revenue (N billion), Fourth Quarter 2021
Q4-20
Q3-21
Q4-21
Benchmark
FGN Retained Revenue

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Oil Revenue

Excess Non-Oil

Exchange Gain

Others*

Source: Compiled from OAGF figures
Note: * Others include revenue from Special Accounts, signature bonus and Special Levies
Note: The Benchmark figures are provisional.
The decline in provisional capital expenditure triggered an 8.8 per cent7
drop in aggregate spending in the fourth quarter of 2021, relative to the
preceding quarter. A disaggregated analysis revealed that recurrent
expenditure rose by 5.6 per cent, relative to the preceding quarter,
while capital expenditure dropped by 61.3 per cent, over the same
period. Recurrent spending maintained its dominance, accounting for
75.1 per cent; while capital expenditure and transfers constituted the
balance of 21.3 per cent and 3.6 per cent, respectively.
Figure 16: Federal Government Expenditure (N billion), 2021Q4
Source: CBN Staff Estimates and compilation from OAGF data
6 Provisional Data
7 Provisional data.


Q4 2020
Q3 2021
Q4 2021
Budget
Billion Naira
Aggregate Expenditure
Recurrent Expenditure
Capital Expenditure
Transfers
Federal Government
Retained Revenue
Federal Government
Expenditure
26 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Table 8: Federal Government Expenditure (N billion)
2020Q4
2021Q3
2021Q4
Benchmark
Aggregate Expenditure

Recurrent

Personnel Cost

Pension and Gratuities

Overhead Cost

Interest Payments

Domestic

External

Special Funds

Capital Expenditure

Transfers

Source: CBN Staff Estimate
Aggregate expenditure fell faster than revenue, thus tapering the
provisional deficit. At N2,232.33 billion, the provisional fiscal deficit of
the FGN was 12.0 per cent lower than the level in the preceding
quarter.
Table 9: Fiscal Balance (N billion), Fourth Quarter 2021
Q4-20
Q3-21
Q4-21
Benchmark
Retained revenue

Aggregate expenditure

Primary balance

Overall balance

Source: Compiled from OAGF figures and CBN Staff Estimates
Note: The figures are provisional.
Public borrowing conformed with the medium-term debt strategy of the
Federal Government. FGN debt outstanding rose to N33,805.84 billion
at end-September 2021, an increase of 7.9 per cent, relative to end-June
20218. Domestic debt accounted for 53.9 per cent of FGN total debt,
while external debt obligations constituted 46.1 per cent. This is set
against the ratio of 70:30 for domestic-external debt target in the 20202023 medium-term debt strategy of the FGN.
FGN bond issues maintained its dominance in the composition of
domestic debt portfolio, accounting for 72.6 per cent of the total
domestic debt, followed by Treasury Bills (19.7 per cent), Promissory
8 DMO is yet to release statistics on Federal Government Debt for the 4th Quarter.
Consequently, this section retains analysis in the 3rd Quarter report
Overall fiscal
balance
Federal
Government Debt
27 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Notes (4.0 per cent), FGN Sukuk (3.2 per cent), and others9 (0.6 per
cent). The composition was in tandem with the FGN’s objective to hold
more of long-term domestic debt instruments than short-term (75:25).
With regards to holders of Nigeria’s external debt, Multilateral,
Commercial and Bilateral loans accounted for 48.6 per cent, 38.2 per
cent and 11.6 per cent of the total external debt stock, respectively;
while ‘others’ loans constituted 1.6 per cent.
Debt service obligations as at 2021Q4 was N445.22 billion, compared
with N1,023.13 billion in the preceding. The significant dip was due,
largely, to the redemption of maturing debt obligations.
Figure 17: FGN External and Domestic Debt Composition (N Trillion)
Source: Compiled from DMO figures.
Figure 18: Composition of Domestic Debt Stock by Instrument
Source: Compiled from DMO figures
9 This includes Treasury bonds (0.4 per cent), Green bond (0.1 per cent) and
Special FGN Savings bond (0.1 per cent).


2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
Foreign
Domestic
FGN Bonds
72.6%
Treasury Bills
19.7%
Others
7.7%
FGN Bonds
Treasury Bills
Others
28 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 19: Composition of External Debt Stock by Holders
Source: Compiled from DMO figures
Multilateral
48.6%
Bilateral 11.6%
Commercial
38.2%
Others
1.6%
29 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.3
MONETARY AND FINANCIAL SECTOR
Financial conditions generally improved in the fourth quarter of 2021.
Key monetary aggregates exceeded their 2021 annual benchmarks,
reflecting the accommodative monetary policy stance of the Bank,
driven, largely, by the expansion in credit to the critical sectors of the
economy. Market interest rates trended downward following improved
banking system liquidity during the review quarter. Activities in the
Nigerian bourse were bullish on the heels of investors’ confidence in the
viability of capital market investment.
2.3.1
Monetary Developments
Reserve money grew in the last quarter of 2021 due to increased
currency-in-circulation. Currency-in-circulation (CIC) grew by 14.3 per
cent, arising from the end of year festivities and reinforced by liquidity
injection into the banking system from matured CBN bills and FAAC
disbursements. However, liabilities to ODCs declined due to the fall in
deposits of other depository corporations. The growth in CIC led to a
1.4 per cent rise in reserve money to N13,295.15 billion at endDecember 2021, from N12,905.94 billion at end-September 2021.
Table 10: Components and uses of Reserve Money (N Billion)
Dec-20
Sep-21
Dec-21
Monetary Base
13,107.93
12,905.94
13,295.15
Currency-In-Circulation
2,908.46
2,837.06
3,325.16
Liabilities to ODCs
10,199.46
10,068.88
9,969.99
Source: Central Bank of Nigeria
Note: ODCs = Other Depository Corporations
The growth in broad money surpassed its benchmark for fiscal 2021.
With the money multiplier at 3.3 at the end-December 2021, broad
money supply (M3) grew by 12.6 per cent, above the indicative
benchmark of 9.99 per cent for fiscal 2021. The development reflected
a significant expansion in domestic claims (17.3 per cent), which more
than offset the 1.8 per cent decline in net foreign assets (NFA). The rise
in NDA was due to the 15.9 per cent growth in net claims on central
government and the 17.8 per cent increase in claims on ‘other’ sectors.
Of the total claims on ‘other’ sectors, credit to the private sector grew
by 27.9 per cent at end-December 2021, compared with 19.8 per cent
at end-September 2021. The development signifies improved credit
delivery to the real economy by the banking system congruent with the
Bank’s accommodative policy stance.
Summary
Monetary
Aggregates
Reserve Money
30 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Table 11: Money and Credit Growth over preceding December (per cent)
Contribution to
M3 growth Dec-

Dec-22
Sep-22
Dec-22
Net Foreign
Assets

Claims on Nonresidents

Liabilities to Nonresidents

Net Domestic
Assets

Domestic Claims

Net Claims on
Central
Government

Claims on Central
Government

Liabilities to
Central Government

Claims on Other
Sectors

Claims on Other
Financial
Corporations

Claims on State and
Local Government

Claims on Public
Nonfinancial
Corporations

Claims on Private
Sector

Broad Money

Currency Outside
Depository
Corporations

Transferable
Deposits

Narrow Money
(M1)

Other Deposits

Broad Money
(M2)
15.39

6.93
15.83
Securities Other
Than Shares

Total Monetary
Liabilities(M3)

Source: Central Bank of Nigeria
The corresponding growth in total monetary liabilities stems from the
rise in currency outside depository corporations (17.7 per cent),
transferable deposits (14.2 per cent), and ‘other’ deposits (16.6 per
cent). ‘Other’ deposits contributed the most to the growth of broad
money liabilities (9.40 percentage points), while transferable deposits
and currency outside depository corporations contributed 4.9 and 1.1
percentage points, respectively. The growth in ‘other’ deposits hinged
on the rise in savings, time, and foreign currency deposits, resulting
from higher yields on savings and time deposits. This was reflected by
31 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
the rise in 3-months and 12-months deposits rates to 4.94 and 6.79 per
cent at end-December 2021 from 4.64 and 6.72 per cent at endSeptember 2021, respectively. The upsurge in currency outside
depository corporations and transferable deposits arising from growing
demand for cash for the yuletide season prompted growth in narrow
money supply (M1) by 14.7 per cent to N18,169.30 billion in the review
quarter.
Sectoral credit utilisation increased due to enhanced credit delivery by
the banking system to support the real economy. Credit utilisation by
sectors of the economy grew by 6.9 per cent to N24,378.19 billion at
end-December 2021, owing, largely, to the increased credit to
trade/general commerce. An analysis of credit utilisation revealed that
the industry and services sectors remained the dominant sectors, as
their share in total credit stood at 40.7 per cent and 53.4 per cent,
respectively, compared with 41.7 per cent and 52.8 per cent at the endSeptember 2021. The agriculture sector's share increased by 0.6
percentage point to 6.0 per cent compared with 5.4 per cent at the endSeptember 2021.
Table 12: Sectoral Utilisation of Credit
Dec-20
Sep-21
Dec-21
Agriculture
5.2
5.4
6.0
Industry
41.9
41.7
40.7
Construction
4.7
4.8
4.4
Services
52.9
52.8
53.4
Trade/General Commerce
6.6
6.9
7.0
Source: Central Bank of Nigeria
Consumer credit outstanding increased due to higher personal and
retail loans. Consumer credit outstanding, at ₦2,073.76 billion, rose by
6.7 per cent at the end-December 2021 from ₦1,942.87 billion at endSeptember 2021. At that level, consumer credit constituted 8.5 per
cent of total credit to the private sector. The growth in consumer credit
could be ascribed to the slight decline in the maximum lending rate in
the review quarter.
Consumer Credit
Sectoral
Utilisation of
Credit
32 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 20: Consumer Credit
Source: Central Bank of Nigeria
A breakdown of consumer loans showed that personal loans sustained
its dominance, accounting for the largest share of 74.9 per cent, while
retail loans explained the remaining 25.1 per cent.
Figure 21: Composition of Consumer Credit in Nigeria
Source: Central Bank of Nigeria


2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
₦'Million
Per cent (%)
Consumer Credit
Consumer Credit as a share of private sector credit

2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
Per cent (%)
Personal
Retail
33 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.3.2
Financial Developments
The financial markets remained resilient in the fourth quarter of 2021
despite the negative impact of the Omicron variant of the COVID-19
pandemic. The positive development boosted investors’ confidence,
resulting in a bullish stance on the major equity market indices on the
Nigerian Exchange Limited.
2.3.2.1 Money Market Developments
There was ample liquidity in the banking system in the last quarter of
2021 as reflected in decline in interest rates. The average net industry
liquidity position rose by 51.7 per cent in the fourth quarter of 2021, to
₦499.31 billion, from ₦329.11 billion in the preceding quarter, buoyed
by the repayment of matured CBN bills and FAAC allocation.
Provisioning and settlement of foreign exchange purchases, investment
in CBN bills, and Cash Reserve Ratio (CRR) debit constituted the
withdrawals from the banking system.
CBN bills with tenor to maturity of 219 days (±136) were auctioned
through Open Market Operations (OMO) in the review quarter. Volume
of subscription rose in the review quarter to ₦762.80 billion, compared
with ₦718.02 billion in the preceding quarter, even as the bid rate
declined to 8.50 per cent (±1.60) from 8.53 per cent (±1.73).
Transactions at the standing facilities window amplified, with greater
recourse to the standing deposit facility during the review period.
At the primary market, investment in debt securities was skewed to
longer tenor instruments. A total of ₦653.61 billion, ₦2,309.45 billion,
and ₦946.54 billion worth of NTBs were respectively offered,
subscribed, and allotted in the review quarter, compared with
₦1,021.98 billion, ₦2,941.54 billion, and ₦1,523.32 billion, in the
preceding quarter. Subscriptions for NTBs were skewed favouring the
364-day tenor, which accounted for 97.6 per cent of total subscriptions
in the fourth quarter of 2021, signifying investors' appetite for longer
tenor instruments. Subscriptions to FGN Bonds decreased to ₦650.47
billion in the fourth quarter of 2021 from ₦965.13 billion in the third
quarter. The development coincides with the falling government
securities yield in the review quarter.
Key short-term interest rates plunged, reflecting improved banking
system liquidity. Daily inter-bank call and Open-Buy-Back rates was
11.17 per cent (±7.65) and 14.50 per cent (±10.50), respectively. Other
rates such as the 7-day, 30-day, and 90-day NIBOR traded at averages
of 13.30, 10.25, and 11.14 per cent, respectively, compared with their
respective levels of 13.26,11.69 and 12.76 per cent in the preceding
Primary Market
Interest Rate
Developments
Liquidity Flows
Open Market
Operations
34 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
quarter.
Ample banking system liquidity reflected in the 5.6 per cent increase in
the average value of lending transactions to N22,967.77 billion. Thus,
the average maximum lending rate dipped by 0.38 percentage points
to 27.31 per cent, from 27.70 per cent in the third quarter of 2021.
However, the prime lending rate increased marginally by 0.06
percentage points to 11.70 per cent. In real terms, these rates are
juxtaposed against the inflation rate of 15.63 per cent.
Average term-deposit rate rose by 0.12 percentage points to 3.86 per
cent, leading to a narrowed spread between the deposit and lending
rates. The spread between the average term deposit and maximum
lending rates narrowed by 0.25 percentage points to 23.71 per cent in
the fourth quarter of 2021.
Figure 22: Interest Rate Trend (per cent)
Source: Central Bank of Nigeria
2.3.2.2 Capital Market Developments
Activities on the Nigerian Exchange Limited (NGX) were bullish.
Aggregate market capitalisation appreciated by 6.4 per cent to N43.12
trillion in the fourth quarter, of 2021, compared with the N40.55 trillion
recorded at the end of the preceding quarter, following sustained
investors’ buying interest in blue-chips stocks and repositioning ahead
of full-year earnings results and dividend declarations. Further analysis
showed that the equities and debt components increased by 6.4 per
cent and 7.3 per cent to N22.30 trillion and N19.74 trillion, respectively.
The Exchange Traded Fund (ETF) component, however, declined by
38.9. Per cent to N0.007 trillion.

21.5

22.5

23.5

24.5

25.5

Percentage Points
Per cent (%)
AVTD
MXLR
PLR
SPRD-RHS
Market
Capitalisation
35 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
The All-Share Index (ASI) opened at 40,221.17 at the beginning of the
review quarter, and closed at 42,716.44 at end-December 2021,
reflecting a 6.2 per cent gain. The increase in the NGX ASI was on
account of price appreciation in the medium and capitalised stocks.
Figure 23: Market Capitalisation and All-Share Index
Source: Nigeria Exchange (NGX) Limited.
In the fourth quarter of 2021, while the NGX-ASeM remained flat,
fourteen sectoral indices trended upward, while three trended
downward (Table 1).
Table 13: Nigeria Exchange (NGX) Limited Indices
NGX Indices
2021 Q3
2021 Q4
Changes (%)
NGX Growth Index
1,026.97
1,269.66
23.63
NGX- MERI VALUE
1,869.29
2,134.95
14.21
NGX -INSURANCE
173.04
198.11
14.49
NGX -MAIN BOARD
1,583.87
1,748.37
10.39
NGX -BANKING
370.85
406.07
9.50
NGX -PENSION
1,552.33
1,624.09
4.62
NGX -AFR Div Yield
2,512.25
2,559.43
1.88
NGX - CG
1,236.21
1,278.00
3.38
NGX Sovereign
852.37
860.95
1.01
NSE- 30- INDEX
1,674.51
1,722.30
2.85
NGX -Asem
670.65
670.65
0.00
NGX-CONSUMER GOODS
567.17
589.28
3.90
NGX -LOTUS
2,905.02
3,009.51
3.60
NGX -PREMIUM
4,070.31
4,167.78
2.39
NGX -MERI GROWTH
1,771.69
1,805.02
1.88
NGX -OIL/GAS
367.27
345.01
-6.06
NGX -INDUSTRIAL
2,089.38
2,008.30
-3.88
NGX -AFR BANK VALUE
1,042.55
1,038.82
-0.36
Source: Nigeria Exchange (NGX) Limited.

Index
N' Billion
Market Capitalization (LHS)
All-Share Index (RHS)
NSE All Share
Index
36 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Trading activities increased in the fourth quarter relative to the third
quarter of 2021. Total turnover volume and value of securities traded
(263,962 deals), rose by 47.2 per cent and 89.2 per cent to 24.50 billion
shares and N284.33 billion, respectively, in, relative to the 16.08 billion
shares worth N145.24 billion (239,729 deals), recorded at the end of
the preceding quarter. Average daily volume traded increased by 52.01
per cent from 259.91 million in the third quarter of 2021 to 395 million
in 2021Q4, while the average daily value of securities was unchanged
at N2.35 billion.
There were eight new and eight supplementary listings in the fourth
quarter of 2021 (Table 14).
Figure 24: Volume and Value of Traded Securities
Source: Nigeria Exchange (NGX) Limited.

Value (N' Billion)
Volume (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)
Volume & Value
of Transactions
37 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Table 14: Supplementary Listings on the Nigerian Stock Exchange at end-December 2021
Company
Additional Shares (Units)
Reasons
Listing
FTN Cocoa Processors Plc
N1.7 billion Rights Issuance of
Ordinary shares of 50 kobo each
at 50 kobo per share
N1.7 billion Rights
Issuance programme
New Listing
7.376% FGS NOV 2023
133,407 units
Bond Issuance
New Listing
8.376% FGS NOV 2024
285,437 units
Bond Issuance
New Listing
6.899%
FGNSB
OCT

66,455 units
Bond Issuance
New Listing
LFZC Funding SPV Plc:
Listing of Bonds
N50 Billion 20 years at 13.25%.
A Senior Guaranteed Fixed Rate
Infrastructure Bond due 2041.
N50b
Bond
Issuance programme
New Listing
ABC Transport Plc
N1.127 billion Rights Issuance of
Ordinary shares of 1naira each at
share
N1.127
billion
Rights
Issuance
programme
New Listing
Ronchess Global Resources
Plc
91 million Ordinary shares Rights
Issuance of 50 kobo each at 35
kobo per share
Rights
issuance
programme
New listing
7.899%
FGNSB
OCT

248,951units
Bond Issuance
New Listing
12.98% FGN MAR 2050
118,826,853 units
Bond Issuance
Supplementary
Listing
13.98% FGN Feb 2028
242,234,811 units
Bond Issuance
Supplementary
Listing
12.40% FGN MAR 2036
258,038,302 units
Bond Issuance
Supplementary
Listing
12.98% FGN MAR 2050
95,244,799 units
Bond Issuance
Supplementary
Listing
16.2499%
FGN
APR

402,046,735
Bond Issuance
Supplementary
Listing
12.98% FGN MAR 2050
155,906,900
Bond Issuance
Supplementary
Listing
16.2499%
FGN
APR

32,190,900
Bond Issuance
Supplementary
Listing
12.50% FGN JAN 2026
37,151,899
Bond Issuance
Supplementary
Listing
Source: Nigeria Exchange (NGX) Limited.
2.3.2.3 Financial Sector Soundness
Nigeria’s financial sector remained stable, as depicted by key financial
soundness indicators. The industry Capital Adequacy Ratio (CAR) fell by
0.5 percentage points to 14.5 per cent in the fourth quarter of 2021,
relative to the 15.0 per cent recorded in the preceding quarter.
However, the ratio was above the regulatory benchmark of 10.0 per
cent. The decline relative to the levels in the preceding quarter was
attributed to the increase in banks' risk-weighted assets, which more
than offset the increase in total qualifying capital of the banks.
In the review period, analysis showed healthier banks’ loan quality
indicator10, relative to the preceding quarter, and it corrected below
the 5.0 per cent prudential requirement. The non-performing loans
(NPLs) ratio improved to 4.8 per cent in the fourth quarter of 2021,
from 5.4 per cent recorded in the preceding quarter, due, mainly, to
the increase in loan recoveries by banks. The industry liquidity ratio (LR)
declined by 6.2 percentage points to 54.9 per cent in the review period,
10 measured by the ratio of Non-Performing Loans to industry total outstanding loans
Financial Sector
Indicators
38 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
compared with 61.0 per cent at the end-September 2021, reflecting a
decrease in the stock of liquid assets held by banks. At that level, the LR
remained higher than the regulatory benchmark of 30.0 per cent.
39 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.4.
EXTERNAL SECTOR DEVELOPMENTS
2.4.1.
External Balance
The external sector's performance slowed in the review period,
despite rising crude oil prices. The development was due largely
to uncertainties and muted economic activities, following the
emergence of the Omicron virus, which moderated global
economic activities, rising import bills for goods and services, and
increased foreign exchange demand pressure. Thus, Nigeria’s
external account recorded a deficit position of US$1.34 billion, in
contrast to a surplus of US$5.28 billion in the preceding quarter.
Current account surplus dropped to US$2.43 billion, relative to
US$3.68 billion in the preceding quarter, driven by higher import
bills for goods and services. The financial account recorded higher
net incurrence of financial liability of US$2.64 billion, relative to
US$2.57 billion in the preceding quarter. The external reserves as
at end-December 2021, was US$40.23 billion, compared with
US$41.57 billion at end-September 2021. The level could only
finance 10.2 months of goods or 7.7 months of goods and services
import. At the I&E window of the foreign exchange market,
average naira exchange rate stood at ₦412.43/US$ during the
fourth quarter of 2021.
2.4.2.
Current & Capital Account
The current account sustained its surplus position, though at lower level
than was recorded in the preceding period. The tapering was on account
of increased importation of goods and services due to end-of-year
festivities. Provisional data showed that the current account posted a
lower surplus of US$2.43 billion (2.2 per cent of GDP), compared with
US$3.68 billion (3.4 per cent of GDP), in the preceding quarter. The
development was largely due to higher import of goods and services,
joined to a lower surplus position in the secondary income account as
both general government and workers remittances inflow declined.
Current and
Capital Account
Developments
Summary
40 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 25: Current Account Balance (US$ billion)
Source: CBN
The sustained rise in crude oil prices at the international market boosted
export receipts during the review period. Export earnings rose by 1.3 per
cent to US$12.82 billion in the fourth quarter of 2021, compared with
the US$12.65 billion in the preceding quarter. A disaggregation showed
that crude oil exports increased marginally by 0.9 per cent to US$9.90
billion, relative to US$9.81 billion in the preceding quarter. The
development was driven, majorly, by the increase in the average price
of Nigeria’s reference crude, the Bonny Light, to US$80.44 per barrel,
from US$73.78 in the previous quarter. Similarly, gas exports grew by
0.3 per cent to US$1.35 billion, compared with US$1.34 billion in the
preceding quarter, due to higher prices at the international market,
amidst supply shortages. Non-oil export receipts also grew by 5.0 per
cent to US$1.57 billion, from US$1.49 billion in the preceding quarter,
owing to increased export, particularly agricultural produce. In terms of
share of total exports, crude oil and gas export receipts remained
dominant, accounting for 87.8 per cent, with oil representing 77.2 per
cent, while gas accounted for 10.6 per cent. Non-oil export accounted
for the balance of 12.2 per cent.
Higher demand for merchandise goods, particularly on the back of the
end-of-year festivities, boosted the demand for imports, thus, resulting
in higher import bills. Merchandise import increased by 8.9 per cent to
US$11.86 billion in the fourth quarter of 2021, relative to the US$10.88
billion in the preceding quarter. The development was attributed to an
increase in both petroleum products and non-oil import in the review
period, to meet the growing end-of-year festive demand. Non-oil
import grew to US$8.53 billion, from US$7.73 billion in the preceding
quarter, while import of petroleum products increased by 5.5 per cent
to US$3.33 billion, from US$3.15 billion, on account of higher demand

Q2 2021
Q3 2021
Q4 2021
US $ Billion
Export
Performance
Merchandise Import
41 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
for premium motor spirit. The share of non-oil import remained
dominant, accounting for 72.0 per cent of total import, while
petroleum products posted for the balance of 28.0 per cent.
A breakdown of non-oil import by sector revealed that importation of
raw materials and machinery for industrial use accounted for the
highest share of 43.9 per cent, followed by manufactured products,
with a share of 23.2 per cent. Importation of food products accounted
for 21.4 per cent, while oil sector, transport and agricultural accounted
for 6.0, 2.9 and 1.6 per cent, respectively. The mineral sector accounted
for the balance of 1.1 per cent.
The gradual return to normalcy as access to vaccines across the world
improved, stimulated the demand for services, particularly travels,
leading to increased services payments. The services account posted a
wider deficit of US$2.87 billion in the fourth quarter of 2021, from
US$2.51 billion in the preceding quarter. A breakdown showed that
payment for services during the quarter amounted to US$3.87 billion,
compared with US$3.43 billion in the preceding quarter of 2021.
Specifically, payment in respect of travel and other business services
increased significantly by 52.8 and 27.0 per cent to US$1.30 billion and
US$0.92 billion, relative to US$0.85 billion and US$0.73 billion in the
preceding period.
Figure 26: Share of Service Out-Payments
Source: Central Bank of Nigeria
Transportation
31.2%
Travel
34.4%
Insurance
Services
4.4%
Telecommunication,
computer &
information Services
2.3%
Charges for the
use of
intellectual
property n.i.e.
1.6%
Government
Services
1.7%
Other Bussiness
Services
24.4%
Services
42 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Analysis of services receipts showed an increase of 8.7 per cent to US$1.00
billion, compared with US$0.92 billion in the preceding quarter. A breakdown
showed that receipts from transportation and financial services export stood
at US$0.61 billion and US$0.14 billion, respectively, accounting for 57.3 per
cent and 14.3 per cent of total export receipts, respectively.
Figure 27: Share of Services Receipts (per cent)
Source: Central Bank of Nigeria
Lower repatriation of dividends and profits by non-resident investors
resulted in narrowing the primary income account. The deficit in the
primary income declined by 11.0 per cent to US$1.81 billion from
US$2.03 billion in the preceding quarter. The development reflected
the seasonality effect as most companies declared dividends at the
earlier part of the year. The compensation of employees sub-account
maintained a surplus position at US$0.05 billion in the fourth quarter of
2021, though 9.8 per cent lower than the level in the preceding quarter.
Transportation
57%
Travel
7%
Insurance
services
6%
Communication
services
3%
Financial
services
14%
Other
business services
1%
Government
Services
12%
Primary Income
43 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 28: Primary Income Balance (US$ million)
Source: Central Bank of Nigeria
The emergence and spread of the Omicron COVID-19 variant affected
global economic dynamics and hampered the inflow of workers’
remittances. The secondary income account posted a lower surplus of
US$6.15 billion, compared with US$6.46 billion in the preceding
quarter, owing to a decrease in both general government and personal
transfer receipts. Personal transfers, including workers’ remittances,
fell by 5.0 per cent to US$4.72 billion in the fourth quarter of 2021,
compared with US$4.97 billion in the preceding quarter, while receipts
by the general government in the form of transfers decreased by 4.0
per cent to US$1.50 billion.
Figure 29: Secondary Income Balance and Remittances Inflow (US$ million)
Source: Central Bank of Nigeria

4TH QTR

1ST QTR

2ND QTR

3RD QTR

4th QTR

US$ Million

4TH QTR

1ST QTR

2ND QTR

3RD QTR

4TH QTR

Secondary Income Balance
Workers' Remittances
Secondary Income
44 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.4.3.
Financial Account
Notwithstanding the persistent global financial market uncertainties
arising from the surge in the new omicron variant and seasonal factors,
the financial account posted net incurrence of financial liabilities. The
financial account recorded net incurrence of financial liability of
US$2.64 billion (2.7 per cent of GDP), relative to US$2.57 billion (2.3 per
cent of GDP) in the preceding quarter. The development was driven,
largely by the significant reduction in the acquisition of financial assets,
and higher inflow of direct investment, reflecting renewed confidence
in the domestic economy.
An estimated financial inflow of US$4.57 billion was recorded in the
fourth quarter of 2021, compared with US$11.88 billion in the
preceding quarter. The reduction was due to the significant decline in
the inflow of portfolio and other investments to US$1.52 billion and
US$1.83 billion, compared with US$7.46 billion and US$4.43 billion,
respectively in the previous quarter. However, the inflow of direct
investment increased to US$1.21 billion, majorly due to the increased
inflow of reinvested capital in the review period, a reflection of
renewed investors' confidence in the economy.
Financial asset stood at US$1.93 billion in the fourth quarter of 2021,
compared with US$9.31 billion in the preceding quarter. This follwed
the decline in foreign currency holdings of the banks and the monetary
authority, as well as the depletion in external reserves. A disaggregation
showed that direct and other investment assets decreased by 62.4 per
cent and 17.2 per cent, respectively, below their levels in the preceding
quarter. Similarly, reserve assets recorded a depletion of US$1.34
billion in the review period, as against an accretion of US$5.28 billion in
the third quarter of 2021, reflecting the Bank’s intervention in the
foreign exchange market to meet the balance of payment needs of the
country.
2.4.4.
External Debt11
Nigeria’s public sector external debt stock and external debt service
payment at end-September 2021 stood at US$37.96 billion (8.6 per cent
of GDP) and US$0.52 million, respectively. A breakdown showed that
the multilateral loans, from the World Bank, International Monetary
Fund, and African Development Bank Groups, amounted to US$18.28
billion, accounting for 48.2 per cent of the total. A total of US$14.67
billion was borrowed from commercial sources in the form of Euro and
11 DMO yet to release data on external debt for the 4th quarter 2021. Consequently, this
section retains the analysis made in the 3rd quarter economic report
Net Acquisition
of Asset
Public Sector
External Debt
Financial Account
Developments
Net Incurrence
of Liability
45 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Diaspora Bonds (38.7 per cent). Loans from bilateral sources was
US$4.40 billion, or 11.6 per cent of the total, while promissory notes
were US$0.60 billion, or 1.5 per cent of the total debt stock.
The external debt service payment stood at US$0.52 million at endSeptember 2021, relative to US$0.30 million in the preceding quarter.
A breakdown showed that the principal repayment was US$0.17
million, accounting for 32.7 per cent of the entire payment. Interest
payment totalled US$0.32 million, or 61.5 per cent of the total, while
other payments made up the balance. An analysis of interest payments
showed that interest payment to multilateral institutions accounted for
5.8 per cent of the total and was US$0.03 million, while that to bilateral
institutions accounted for 9.6 per cent of the total at US$0.05 million.
Interest payments on commercial borrowings at US$0.25 million was
48.1 per cent of the total.
2.4.5. International Investment Position (IIP)
Nigeria's International Investment Position (IIP) recorded an estimated
net financial liability of US$78.99 billion at end-December 2021. The
estimated stock of financial assets declined by 8.7 per cent to US$93.67
billion at end-September 2021, compared with US$102.57 billion at
end-September 2021. This was due largely to decrease in Foreign direct
investment, other investment and stock of reserve assets in the review
period.
The stock of financial liabilities representing foreign investors' claims on
the economy decreased by 4.6 per cent to US$172.66 billion at endDecember 2021, compared with US$181.08 billion at end-September
2021. The development reflected a decrease in the stock of direct,
portfolio and other investment liabilities in the fourth quarter of 2021
when compared to the preceding quarter.
2.4.6.
International Reserves
Increased foreign exchange sales at the Investors and Exporters (I&E)
window, coupled with other public sector payments, led to depletion in
external reserves. Nigeria’s international reserves decreased to
US$40.23 billion at end-December 2021, compared with US$41.57
billion at the end -September 2021. The level of external reserves could
cover about 7.7 months of import for goods and services or 10.2
months of import for goods only.
International
Investment Position
International
Reserves
46 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 30: External Reserves and Months of Import Cover
Sources: Central Bank of Nigeria
A breakdown of the external reserves by ownership showed that the
share of CBN was US$37.98 billion (94.4 per cent), Federal
Government, US$2.19 billion (5.4 per cent), while the Federation
accounted for the balance of US$0.06 billion (0.2 per cent). In terms of
currency composition, the US dollar was US$30.27 billion, (75.2 per
cent); Special Drawing Rights US$5.32 billion (13.2 per cent); Chinese
Yuan US$4.27 billion (10.6 per cent); GB Pounds, US$0.25 billion (0.6
per cent); Euro US$0.11 billion (0.3 per cent); and other currencies
accounted for the balance.
2.4.7
Foreign Exchange Flows through the Economy
Foreign exchange inflow through the economy declined in the fourth
quarter of 2021, owing to lower inflow through both the Bank and
autonomous sources. Foreign exchange inflow into the economy fell by
31.7 per cent to US$20.62 billion, from US$30.20 billion in the
preceding period. The development was driven by the 45.5 per cent
and 14.4 per cent lower inflow through the CBN and the autonomous
sources, respectively. Foreign exchange inflow through the Bank at
US$9.18 billion, fell below the US$16.83 billion in the preceding quarter
as both oil and non-oil receipts declined, as a result of lower receipts
from interest on reserves and interbank swaps. A disaggregation
showed that proceeds from oil-related sources declined by 12.2 per
cent to US$1.63 billion, relative to the preceding period. Similarly,
receipts from non-oil sources fell to US$7.54 billion, compared with
US$14.97 billion in the preceding quarter. Foreign exchange inflow
through autonomous sources declined to US$11.44 billion, relative to

US$ Billion
External Reserves - LHS
Months of Import (Goods only)
Months of Import (Goods and Services)
Foreign Exchange
Flows through the
Economy
47 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
US$13.37 billion in the preceding period, driven mainly by a reduction
in over-the-counter (OTC) purchases and non-oil export receipts.
Foreign exchange outflow through the economy rose by 19.4 per cent
to US$12.21 billion, relative to the level in the preceding quarter,
majorly on account of increased foreign exchange intervention and
utilisation for visible imports. Outflow through the Bank at US$10.58
billion, increased by 32.5 per cent, relative to US$7.98 billion in the
preceding quarter, attributable to increased sales to I&E window, thirdparty MDA transfers, public sector direct payments, and Joint Venture
Cash Call payments. However, autonomous outflow decreased by 27.2
per cent to US$1.63 billion, due to lower utilisation of foreign exchange
for invisible imports.
Consequently, the economy recorded a lower net inflow of US$8.41
billion in the fourth quarter, compared with US$19.98 billion in the
preceding quarter, reflecting the lower net inflow of US$9.81 billion
recorded through autonomous sources. In contrast, a net outflow of
US$1.40 billion was recorded through the Bank, compared with a net
inflow of US$8.85 billion in the preceding quarter.
Figure 31: Foreign Exchange Transactions through the Bank (US$ billion)
Source: Central Bank of Nigeria
Q4 2020
Q3 2021
Q4 2021
Inflow
8,171.83
16,831.30
9,176.59
Outflow
7,918.35
7,981.37
10,577.32
Netflow


Inflow
Outflow
Netflow
48 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
2.4.8.
Developments in the Foreign Exchange Market
In the fourth quarter, effective November 30, 2021, the Bank deployed
the e-form A and e-form NCX to replace the paper copies so as to
improve efficiency and transparency in foreign exchange transactions.
In addition, the Bank launched a new policy - “100 for 100 PPP – Policy
on Production and Productivity” - to support 100 private sector
companies for 100 days, among other objectives, reduce import
dependency and conserve foreign exchange.
2.4.9.
Transactions in the Foreign Exchange Market
Total foreign exchange sales to authorised dealers by the Bank at
US$5.15 billion, decreased by 3.6 per cent, compared with the level in
the preceding quarter. A disaggregation showed that sales to Investors
and Exporters' window rose by 142.3 per cent to US$1.93 billion,
relative to the level in the preceding quarter, reflecting increased
demand pressure. However, foreign exchange sales at interbank and
SMIS window declined by 24.0 per cent and 4.4 per cent to US$0.55
billion and US$2.00 billion, respectively, relative to the levels in the
preceding
quarter,
reflecting
lower
demand.
Similarly,
SME
interventions and matured swap contracts also decreased by 5.5 per
cent and 67.4 per cent to US$0.38 billion and US$0.29 billion, compared
with the preceding quarter.
Figure 32: Foreign Exchange Sales to Authorised Dealers (US$ billion)
Source: Central Bank of Nigeria
The average turnover at the I&E segment increased by 14.9 per cent to
US$0.19 billion, relative to the level in the preceding quarter, reflecting
increased liquidity in the window, following sustained foreign exchange
intervention by the Bank.

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

US$'Billionn
Spot
Transactions
Foreign
Exchange
Market
Developments
49 | P a g e CentralBank of Nigeria Economic Report
Fourth Quarter2021
ECONOMIC REPORT, FOURTH QUARTER 2021
Figure 33: Turnover in the I&E Foreign Exchange Market
Source: Central Bank of Nigeria
2.4.10. Exchange Rate Movement
The naira exchange rate was relatively stable at the I&E window,
supported by the Bank’s sustained interventions. The average exchange
rate of the naira per US dollar at the I&E window, depreciated
marginally by 0.1 per cent to ₦412.43/US$, compared with
₦411.89/US$, in the preceding quarter.
-100
-50

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Per cent(%)
US$ Million
Average Turnover
Rate of Turnover
Average
Exchange Rate
50 | P a g e CentralBank of Nigeria Economic Report
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ECONOMIC REPORT, FOURTH QUARTER 2021
3.0
ECONOMIC OUTLOOK
3.1
Global Outlook
Growth prospects, in the near term, is threatened by renewed disruptions
from the Omicron variant of COVID-19, protracted financial stress, and
probable cessation of policy support. According to IMF WEO, the global
economy is projected to grow by 5.9 per cent in 2021 (0.1 percentage point
lower than the forecast published in July) and 4.9 per cent in 2022. This
revision is anchored on idiosyncratic factors, such as supply shortages, reduced
fiscal support, and monetary policy normalisation in the US, and the pandemicinduced disruptions related to the zero-tolerance COVID-19 policy and
protracted financial stress among property developers in China. In addition,
the wide disparity in the pace of vaccination between advanced economies
and low-income developing countries is expected to further dampen the
growth outlook in the medium-term, as the low-income countries continue to
lag other country groups.
In 2023, global growth is expected to slow further to 3.8 per cent, albeit a 0.2
percentage point higher than the October IMF WEO forecast. This revision is
hinged on strong consumer demand and improved business confidence,
supported by subsisting policy support, after current drags on growth dissipate
in the second half of 2022. However, the expected policy normalisation in most
advanced economies and the emergence of more virulent strains of
coronavirus disease, sluggish progress observed in vaccination programmes in
emerging and developing economies, tighter labour markets, and broader
slowdown in China pose debilitate global outlook.
Global inflation is expected to remain elevated in the near term, driven by
several factors of varying importance across regions. Inflation in advanced
economies is projected to average 3.9 per cent in 2022, a 0.8 percentage point
increase over the level in 2021, on the back of rising energy prices, prominently
in Europe and supply chain disruptions, especially in the US. Similarly, average
inflation in EMDEs is expected to rise slightly to 5.9 per cent in 2022, from 5.7
per cent in the preceding year due to COVID-19 containment measures in
China, higher import prices in Latin America and the Caribbean region, and
rising food prices in sub-Saharan Africa.
Inflationary pressures are expected
to subside in 2023, assuming inflation expectations are well anchored as
supply chain disruptions ease, monetary policy tightens, supply-demand
imbalances in the energy sector recede, and demand rebalances away from
goods-intensive consumption towards services.
Most commodity prices, especially agricultural commodities, may remain
elevated in the first quarter of 2022. Global market fundamentals have
received a boost owing largely to improvements in vaccination rates globally,
lower COVID-19 mortality, and lesser possibilities for lockdowns. These
developments may likely weigh down the increasing rally in demand as
supplies are expected to improve. However, most commodity prices,
51 | P a g e CentralBank of Nigeria Economic Report
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ECONOMIC REPORT, FOURTH QUARTER 2021
especially agricultural commodities, may remain elevated in the first quarter
of 2022. This is hinged on higher global inflation rates, including high shipping
costs, energy and fertilizer prices, as well as the shortage of labour in many
countries, particularly for palm oil, cotton, and coffee exporters. In addition,
the new or unfolding variants of the coronavirus will continue to increase
uncertainties in the market.
3.2
Domestic Outlook
Near-term growth outlook for the Nigerian economy is positive but fragile.
The economy is projected to grow at 2.94 per cent in the first quarter of 2022,
with an annual growth of 2.71 per cent in 2022. The positive outlook is
predicated on the judicious implementation of the Medium-Term National
Development Plan (2021 – 2025), a rebound in manufacturing activities,
improvement in vaccination rates, and the favourable impact of CBN
interventions on growth-enhancing sectors. Other potential growth enablers
include: the implementation of the Petroleum Industry Act (PIA), which is
expected to expand the fiscal space of government; the proposed take-off of
the 650,000-capacity Dangote refinery in the third quarter of 2022; and
increased rate of adoption of the eNaira, which is expected to improve cost
efficiency on transactions and financial inclusion in the medium-to-long term.
However, lingering security challenges, infrastructure deficit, and unstable
electricity supply are likely headwinds that could undermine economic
recovery.
Inflationary pressure is expected to moderate in the short term, following
broad-based policy support to critical sectors. The ongoing harvest, which
commenced in the third quarter of 2021, and the efforts of the Bank at
improving food security and boosting the outcome of dry season farming will
continue to moderate prices in the short term. Consequently, headline
inflation is expected to decline to 13.7 per cent12 in March 2022, from 15.6 in
December 2021.
The fiscal outlook remains moderately optimistic in the near term. Recovery
in crude oil prices due to an uptick in global economic activities and the
continuous implementation of the strategic revenue growth initiatives of the
FGN is expected to enhance the fiscal space and ultimately impact the
economy positively. However, lingering security challenges and the delayed
implementation of the PIA remain the major downside risks to the outlook.
The monetary policy stance is expected to remain accommodative.
Intervention through OMO and CRR debits is expected to continue to
neutralize the effect of the expected inflows from maturing CBN bills and
ensure price stability conducive for economic growth. Improved yields on fixed
income securities and bullish activities in the equities market may likely persist.
12 Staff Estimates
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However, inflationary pressures and growth concerns are key challenges to
monetary policy.
Nigeria’s external reserves outlook is tepid amidst sustained high global
crude oil price. The level of external reserves is projected to inch up in the near
term, as crude oil prices continue to rise and global demand grow. However,
rising global crude oil production (driven by Russia, and the United States)
could depress prices and impact external reserves accretion.