ECONOMIC REPORT
FIRST QUARTER 2012


CENTRAL BANK OF NIGERIA


C e n t r a l B a n k o f N i g e r i a
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Economic Report First Quarter

The Central Bank of Nigeria Quarterly Economic Report is designed for the dissemination
of financial and economic information on the Nigerian economy on current basis. The
Report analyses developments in the financial, fiscal, real and external sectors of the
economy, as well as international economic issues of interest. The Report is directed at
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C e n t r a l B a n k o f N i g e r i a
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Economic Report First Quarter

Contents


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Economic Report First Quarter


Text Tables


C e n t r a l B a n k o f N i g e r i a
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Economic Report First Quarter

Appendix Tables

Figures


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Economic Report First Quarter

1.0 Summary
Provisional data from the National Bureau of Statistics (NBS)
estimated gross domestic product (GDP) growth in the first quarter of
2012 at 6.6 per cent, compared with 7.7 per cent in the preceding
quarter. The development was attributed, largely, to the increase in
the contribution of the service sector by 2.7 per cent.
Broad money supply, (M2), fell by 0.2 per cent at end-March 2012
relative to the level at end-December 2011. The development
reflected the 3.0 per cent decline in other assets (net) of the banking
system. Narrow money supply, (M1), also declined by 3.7 per cent,
against the increase of 12.7 per cent at the end of the preceding
quarter. Reserve money (RM) declined by 9.2 per cent below the
level at the end of the preceding quarter.
Available data indicated a mixed trend in banks’ interest rates. The
spread between average term deposit and the maximum lending
rates narrowed by 1.31 percentage points to 16.4 per cent at the
end of first quarter of 2012. Similarly, the margin between the
average savings deposit and the maximum lending rates, also,
narrowed from 22.04 per cent in the preceding quarter to 21.62 per
cent. The weighted average inter-bank call rate, which stood at
15.47 per cent at end December 2011, fell by 1.25 percentage
points to 14.22 per cent in the first quarter of 2012, reflecting the
liquidity condition in the interbank funds market.
Provisional data indicated that the value of money market assets
outstanding for the first quarter of 2012 stood at N5,837.3 billion,
showing an increase of 5.3 per cent, compared with the increase of
7.0 per cent recorded at the end of the fourth quarter of 2011. The
development was attributed largely, to the 12.7 per cent increase in
outstanding Nigerian Treasury Bills (NTBs). Activities on the Nigerian
Stock Exchange (NSE) in the first Quarter 2012 were mixed.
Total federally-collected revenue in the first quarter of 2012 stood at
N 2,897.65 billion, representing a decline of 4.2 per cent below the
level in the preceding quarter, but an increase of 23.2 and 22.2 per
cent over the proportionate budget estimate and receipts in the
corresponding quarter of 2011, respectively. At N2,376.02 billion,
gross oil receipts, which constituted 82.0 per cent of the total,
exceeded the proportionate budget estimate by 48.4 per cent, but
was lower than the level in the preceding quarter by 1.3 per cent.
The increase in oil receipts relative to the budget estimate was
attributed, largely, to the improvement in receipts from PPT and
Royalties during the quarter under review. Non-oil receipts, at
N521.63 billion (18.0 per cent of the total), was below the


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Economic Report First Quarter

proportionate budget estimate and the level in the preceding
quarter by 30.5 and 15.5 per cent, respectively. The decline in non-oil
revenue relative to the preceding quarter’s level reflected largely
the fall in Corporate Taxes and Independent Revenue of the Federal
Government during the review quarter.
Federal Government retained revenue for the first quarter of 2012
was N825.52 billion, while total expenditure was N902.47 billion. Thus,
the fiscal operations of the Federal Government resulted in an
estimated deficit of N76.95 billion or 0.8 per cent of estimated
nominal GDP for first quarter 2012, compared with the deficit of
N365.07 billion and N271.39 billion for the preceding quarter and the
corresponding quarter of 2011, respectively.
Agricultural activities in most parts of the country during the first
quarter of 2012 were dominated by harvesting of tree crops and
preparation of land for the 2012 cropping season. In the livestock
sub-sector, farmers replenished their stock of broilers and layers in
anticipation for increased demand during the Easter festivity in April
2012.
Nigeria’s crude oil production, including condensates and natural
gas liquids, was estimated at 2.06 million barrels per day (mbd) or
187.46 million barrels during the first quarter of 2012. Crude oil export
was estimated at 1.61 mbd or (146.51 million barrels) in the review
period, while deliveries to the refineries for domestic consumption
remained at 0.45 mbd or 40.95 million barrels in the quarter. The
average price of Nigeria’s reference crude, the Bonny Light (370
API), estimated at US$121.10 per barrel, rose by 7.9 per cent over the
level in the preceding quarter.
The end-period inflation rate for the first quarter of 2012, on a yearon-year basis rose from the preceding quarter’s level of 10.3 per
cent, to 12.1 per cent, but was lower than the 12.8 per cent
recorded at the end of the corresponding quarter of 2011. The
inflation rate on a twelve-month moving average basis for the first
quarter was 10.9 per cent, compared with 10.8 and 13.0 per cent in
the preceding quarter and the corresponding quarter of 2011,
respectively.
Foreign exchange inflow and outflow through the Central Bank of
Nigeria (CBN) amounted to US$12.12 billion and US$9.76 billion,
respectively, resulting in a net inflow of US$2.36 billion during the
quarter. Foreign exchange sales by the CBN to the authorized
dealers amounted to US$7.98 billion in the first quarter of 2012,
compared with US$11.70 billion in the fourth quarter of 2011.


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Economic Report First Quarter

The average exchange rate of the Naira vis-à-vis the US dollar
depreciated by 1.4 per cent to N157.95 per US dollar at the wDAS
segment. It also depreciated by 3.9 per cent relative to the level in
the corresponding quarter of 2011. In the bureaux-de-change
segment of the market, the Naira traded at an average of N161.63
per US dollar, same as in the level in the preceding quarter. At the
interbank segment however, the Naira exchanged for an average
of N159.20 to the US dollar in the first quarter of 2012, compared with
N160.27 and N156.11 per US dollar in the preceding quarter and the
corresponding quarter of 2011, respectively. Non-oil export earnings
by exporters, at US$1.04 billion, increased by 76.2 and 14.3 per cent
over the levels in the preceding quarter and the corresponding
quarter of 2011, respectively.
The April 2012 edition of the International Monetary Fund (IMF) World
Economic Output (WEO) reported that the global economy was
slowly improving, but growth was expected to be weak, especially in
Europe, while unemployment in many advance economies would
stay high. Global output was projected to grow by 3.5 percent in
2012, compared with3.9 per cent in 2011. Output growth in SubSaharan Africa was projected at 5.4 per cent in 2012, compared
with 5.1 per cent in 2011.
Other major international economic developments and meetings of
relevance to the domestic economy during the review quarter
included: the World Economic Forum Annual Meeting held at DavosKlosters, Switzerland from January 25-29, 2012 on the theme: “The
Great Transformation: Shaping New Models”.
Also, the meeting of the National Coordinating Committee (NCC)
on the Economic Community of West African States (ECOWAS)
Multilateral Surveillance Mechanism was held in Ouagadougou,
Burkina Faso, from January 23 – 27, 2012. The meeting was convened
to receive presentation on Members’ economic and financial
situation during the first half of 2011 and assess their progress towards
achieving macroeconomic convergence, which is critical to
attaining monetary union in the West African sub-region.
Furthermore, the 18th African Union (AU) Heads of State and
Government Summit was held in Addis Ababa, Ethiopia from
January 29 - 30, 2012 with the theme “Boosting Intra-African Trade”.
The Heads of State adopted twenty-five (25) decisions, one
resolution and two declarations.
The African Union Commission and the US Agency for International
Development (USAID), on February 1, 2012, discussed the upcoming
conference on the Horn of Africa. Among the issues deliberated


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Economic Report First Quarter

upon included: the Grow Africa Initiative, the African Risk Capacity
(ARC) and strengthening of the African Mission to Somalia (AMISOM)
with the aim of placing these issues on the G8 agenda, and
attracting funds for the programmes.
The Board of the International Monetary Fund (IMF) concluded
discussions on staff report on Article IV Mission to Nigeria on February
22, 2012. The Nigerian authorities were applauded by the IMF team
for promoting countercyclical policies that have supported
economic
activity
in
challenging
circumstances.
They
also
supported Nigeria’s strategy to rebuild fiscal buffers through a better
prioritization of public expenditure, continued subsidy reform, and
improved tax administration.
Furthermore, the first Bureau Meeting of the Association of African
Central Banks (AACBs) was hosted by the Central Bank of Nigeria on
February 29, 2012. The meeting was preceded by a meeting of the
Technical Committee of the AACB and that of the Joint Technical
Committee of the African Union Commission and the AACB on
February 27 and 28, 2012, respectively.
In addition, a task force made up of officials of the ECOWAS
Commission and the West African Monetary Institute (WAMI) at the
end of a three-day meeting, agreed on mechanisms to boost
regional trade by eliminating impediments to intra-community trade
and
improve
the
implementation
of
the
ECOWAS
Trade
Liberalization Scheme (ETLS), which is one of the pillars of the region’s
integration agenda.
Finally, a meeting of experts of the three Local Bilateral Committees
of the Nigeria – Niger Joint Commission was held in Katsina State,
Nigeria, from March 19-24, 2012. The meeting examined issues of
common interest to the people of the border areas, particularly,
construction of secondary roads between the two countries,
progress on the re-demarcation of the Nigeria - Niger international
boundary, food security, trade and industry, health, education,
sports, youth activities, environment, water resources and renewable
sources of energy.


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Economic Report First Quarter

2.0 Financial Sector Developments
The growth in the key monetary aggregate decelerated at the end
of the first quarter of 2012. Banks’ deposit rates generally increased,
while lending rates indicated mixed developments during the
quarter under review. The value of money market assets increased,
due largely, to the rise in FGN bonds and Nigerian Treasury Bills
(NTBs). Transactions on the Nigerian Stock Exchange (NSE) were
mixed during the review quarter.
2.1 Monetary and Credit Developments
Provisional data indicated that growth in the major monetary
aggregate decelerated at the end of the first quarter of 2012.
Relative to the level at the end of the preceding quarter,
broad money supply, (M2), fell by 0.2 per cent to N13,265.0
billion at end-March 2012, compared with the growth of 5.4
and 1.1 per cent at the end of the preceding quarter and the
corresponding quarter of 2011, respectively. The development
reflected the 3.0 per cent decline in other assets (net) of the
banking system. Similarly, narrow money supply, (M1), at
N6,516.9 billion, declined by 3.7 per cent, in contrast to the
growth of 12.7 per cent at the end of the preceding quarter.
Relative to the preceding quarter’s level, the development
reflected the 8.3 per cent and 2.6 per cent decline in its
currency and demand deposits components, respectively.
Quasi-money, at N6,748.0 billion, rose by 3.3 per cent over the
level at the end of the preceding quarter (Fig. 1, Table 1).
Growth in the key
monetary aggregate
decelerated in Q1
2012.


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Economic Report First Quarter

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

Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Quarterly (%)
Cumulative (%)
QM1 (RHS)
QM2 (RHS)
CM1 (LHS)
CM2 (LHS)

At N13,688.9 billion, aggregate banking system credit (net) to
the domestic economy, rose marginally by 0.23 per cent at
the end of the first quarter of 2012, compared with the growth
of 36.8 per cent at the end of the preceding quarter. It,
however, fell by 5.8 per cent at the end of the corresponding
quarter of 2011. The moderation in the growth of aggregate
banking system credit (net) relative to the preceding quarter’s
level reflected, largely, the 0.1 per cent decline in credit to the
private sector, which dampened the effect of the 9.9 per cent
growth in claims on the Federal Government.
Banking system’s credit (net) to the Federal Government, at
end of the review quarter, rose by 9.9 per cent to negative
N474.5 billion, in contrast to a decline of 54.0 per cent in the
preceding quarter. The development was accounted for,
largely, by the rise in the banking system’s holding of
government securities, particularly Treasury Bills and bonds.
The Federal Government, however, remained a net lender to
the banking system at the end of the review quarter.

1 QM1 and QM2 represent quarter-on-quarter changes, while CM1a and CM2 represent
cumulative changes (year-to-date).


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Economic Report First Quarter

At the end of first quarter 2012, banking system’s credit to the
private sector fell by 0.1 per cent to N14,163.4 billion, in
contrast to the growth of 27.5 per cent at the end of the fourth
quarter of 2011. The development was attributed, wholly, to
the 0.3 per cent decline in claims on the core private sector.
(Fig. 2, Table 1).
Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy2


-20
-10

Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Quarterly (%)
Cumulative (%)
QCP (RHS)
QCG (RHS)
QAC (RHS)
CCP (LHS)
CCG (LHS)
CAC (LHS)

At N7,301.6 billion, foreign assets (net) of the banking system
rose by 2.3 per cent at the end of the review quarter,
compared with 7.0 and 7.4 per cent at the end of the
preceding quarter and the corresponding quarter of 2011,
respectively. The rise in foreign assets (net) was attributed,
wholly, to the increase in DMBs’ holdings.
At the end of the review quarter, other assets (net) of the
banking system declined by 3.0 per cent to negative N 7,725.5
billion, compared with the decline of 86.0 and 4.0 per cent at
the end of the preceding quarter and the corresponding
quarter of 2011, respectively. The development reflected,
largely, the decline in unclassified assets of the CBN.

2 QCP, QCG and QAC represent quarter-on-quarter changes in credit to private sector, credit to
government (net) and aggregate credit (net) to the domestic economy, respectively, while CCP,
CCG and CAC, represent the cumulative changes (year-to-date).
Banking system
credit to the
private sector
fell at the end of
the first quarter
of 2012.
Foreign assets
(net) of the
banking
system
increased at
the end of the
quarter under
review.


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Economic Report First Quarter

Table 1: Growth in Monetary and Credit Aggregates (Percent)
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Foreign Assets (Net)

Other Assets (Net)

Broad Money Supply (M2)

Quasi-Money

Narrow Money Supply (M1)

Memorandum Items:
Reserve Money (RM)


2.2
Currency-in-circulation (CIC) and Deposits at
the CBN
At N1,432.8 billion, currency in circulation fell by 8.5 per cent at
the end of the first quarter of 2012, in contrast to the increase
of 16.6 per cent at the end of the preceding quarter. The
development was attributed, largely, to the 8.7 per cent
decline in currency outside banks.

Total deposits at the CBN amounted to N5,692.4 billion,
indicating a decline of 7.0 per cent, as against an increase of
13.3 per cent at the end of the preceding quarter. The
development reflected the 10.1 and 6.9 per cent decline in
both DMBs and Federal Government deposits, respectively. Of
this total, the shares of the Federal Government, banks and
‘’others’’ were N4,007.05 billion (70.4 per cent), N1,094.77
billion (19.2 per cent) and N590.55 billion (10.4 per cent),
respectively.
Consistent with the trends in DMBs’ deposits with the CBN, the
reserve money (RM), declined by 9.2 per cent to N2,527.6
billion, from N2,784.1 billion at the end of the preceding
quarter.


Reserve money (RM)
declined at the end
of the first quarter of
2012.


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Economic Report First Quarter

2.3
Money Market Developments
During the quarter under review, the Bank conducted Open
Market Operations (OMO) for liquidity management purposes.
In addition, FGN Bonds and NTBs were issued at the primary
market, on behalf of the Debt Management Office (DMO), for
the fiscal operations of the Federal Government of Nigeria
(FGN). Money market rates were close to the upper bound of
the interest rate corridor. Yields on fixed income securities
remained inverted.
Provisional data indicated that the value of money market
assets outstanding at the end of the first quarter of 2012 stood
at N5,837.3 billion, showing an increase of 5.3 per cent,
compared with the increase of 7.0 per cent at the end of the
fourth quarter of 2011. The development was attributed,
largely, to the 12.7 per cent increase in outstanding Nigerian
Treasury Bills (NTBs).
2.3.1
Interest Rate Developments
Available data indicated mixed trends in banks’ interest rates
in the first quarter of 2012. All rates on deposits of various
maturities rose from a range of 1.41 – 7.09 per cent in the
fourth quarter of 2011 to 1.48 – 7.94 per cent. Similarly, at 6.71
per cent, the average term deposit rate, increased by 0.98
percentage point above the level in the preceding quarter.
The
average
prime
lending
rate
increased
by
0.41
percentage point to 17.1 per cent, while the maximum
lending rate fell by 0.34 percentage point to 23.1 per cent in
the first quarter. Consequently, the spread between average
term deposit and the maximum lending rates narrowed by
1.31 percentage points to 16.4 per cent at the end of the first
quarter of 2012. The margin between the average savings
deposit and the maximum lending rates, also, narrowed from
22.04 per cent in the preceding quarter to 21.62 per cent. With
headline inflation rate at 12.1 per cent at end-March 2012, all
rates, with the exception of lending rates, were negative in
real terms.
At the interbank call segment, the weighted average interbank call rate, which stood at 15.47 per cent at end
December 2011, fell by 1.25 percentage points to 14.22 per
cent at the end of the first quarter of 2012, reflecting the
All rates on
deposits of
various
maturities
trended upwards
in Q1 2012.
The spread
between the
average
term deposit
and
maximum
lending rates
narrowed.


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Economic Report First Quarter

liquidity condition in the inter-bank funds market. The
weighted average rate at the Open Buy Back (OBB) segment,
increased to 13.70 per cent at the end of the review quarter
from 13.49 per cent in the preceding quarter. The Nigeria Interbank Offered Rate (NIBOR) for the 7- and 30-day tenors also
declined to 14.6 and 15.2 per cent, respectively, from 16.07
and 16.56 per cent in the fourth quarter of 2011 (Fig. 3, Table
2).
Figure 3: Selected DMBs Interest Rates (Average)

Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12
Percent per Annum
Percent per Annum
Prime
Interbank
Maximum
Average Term Deposits


Table 2: Selected Interest Rates (Percent, Averages)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Average Term Deposits

Prime Lending

Interbank

Maximum Lending


2.3.2
Commercial Paper (CP)

The value of Commercial Paper (CP) held by DMBs declined
by 3.6 per cent to N195.80 billion at the end of the first quarter
of 2012, as against a decline of 3.0 per cent at the end of the
preceding quarter. Thus, CP constituted 3.4 per cent of the
total value of money market assets outstanding, compared
with 3.7 per cent at the end of the preceding quarter.

Investment in
CP by DMBs
declined in the
first quarter of
2012.
With the
exception of rates
at the OBB
segment, all
interbank money
market rates
declined in Q1


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Economic Report First Quarter

2.3.3
Bankers’ Acceptances (BAs)

The value of BAs held by DMBs fell by 61.3 per cent to N28.4
billion at the end of the review quarter, compared with the
decline of 15.6 per cent at the end of the preceding quarter.
The development reflected the decline in investments by
deposit money banks and discount houses. Consequently, BAs
accounted for 0.5 per cent of the total value of money
market assets outstanding at the end of the review quarter,
compared with 1.3 per cent at the end of the preceding
quarter.
2.3.4
Open Market Operations
Bills with maturities ranging from 36 to 364 days were traded in
the first quarter of 2012. Total sales in the first quarter was
N1,035.93 billion. The bid rates ranged from 14.00 to 20.00 per
cent, while the stop rates ranged from 15.49 to 17.59 per cent.
The total sales was 26.64 per cent below the level in the
previous quarter.

2.3.5
Primary Market
At the primary market segment, NTBs of 91-, 182- and 364-day
tenors, amounting to N947.45, N1,947.96 and N807.14 billion,
respectively, were offered, subscribed to and allotted in the
first quarter of 2012, compared with the respective sums of
N907.50 billion, N1,462.78 billion and N872.79 billion in the
preceding quarter. The bid rates ranged from 12.00 - 17.50,
14.00 - 17.95 and 14.50 - 20.00 per cent for the 91 - 182- and
164- day tenor, respectively, while the stop rates ranged from
14.19 - 15.00, 15.00 - 16.98 and 15.57 - 17.20 per cent. The huge
subscription was attributed to the growing demand for riskfree government securities with attractive yields in real terms.
2.3.6
Bonds Market
FGN Bonds of 10-year tranches were auctioned during the
review period. Of the three tranches, two were re-openings,
while one was a new issue. Total amount offered, subscribed
to and allotted were N209.76 billion, N382.40 billion and
N193.66 billion, respectively, with marginal rates between
15.30 – 16.98 per cent. In addition, N41.00 billion and N50.00
billion, were sold to non-competitive bids in February and
March 2012, respectively.
Patronage at the
primary market
remained impressive
due to market
players’ preference
for risk-free
government
securities.
Subscription for FGN
Bonds of various
maturities was
impressive and driven
by market players’
confidence in the
economy and their
perception about
stable and attractive
yield.
DMBs’
holdings of
BAs fell
during Q1 of
2012.


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Economic Report First Quarter

2.3.7
CBN Standing Facilities
The total standing lending facility (SLF) granted was N3,663.41
billion, compared with N10,448.41 billion and N3,146.82 in the
fourth quarter of 2011 and the corresponding period of 2011,
respectively. The decline in the SLF granted relative to the
preceding quarter, reflected the stronger liquidity position of
some
DMBs
that
had
completed
the
process
of
recapitalization. The total Standing Deposit Facility (SDF)
granted was N1,985.58 billion, compared with N1,166.69 billion
in the fourth quarter of 2011, reflecting the improved money
market liquidity condition in the quarter under review.

2.4
Deposit Money Banks’ Activities
Available data indicated that the total assets and liabilities of
the DMBs stood at N19,880.8 billion at the end of the first
quarter of 2012, representing an increase of 2.5 per cent
above the level at the end of the preceding quarter. The
funds, which were sourced, largely, from drawn-down on
capital and reserves were used mainly to acquire unclassified
liabilities and assets. Central Bank’s credit to the DMBs,
largely, loans and advances, declined by 7.0 per cent to
N274.2 billion at the end of the review quarter. At N12,288.7
billion, DMBs’ credit to the domestic economy, declined by 2.7
per cent below the level in the preceding quarter. The
development was attributed, wholly, to the 9.7 per cent fall in
claims on the Federal Government.
Total specified liquid assets of the DMBs stood at N5,888.4
billion, representing 39.7 per cent of their total current
liabilities. At that level, the liquidity ratio fell by 2.3 percentage
points below the level at the end of the preceding quarter,
but was 9.7 percentage points above the stipulated minimum
ratio of 30.0 per cent. The loans-to-deposit ratio, at 41.1 per
cent, declined by 3.7 percentage points below the level at
the end of the preceding quarter, and was 38.9 percentage
points below the prescribed minimum ratio of 80.0 per cent.


The liquidity ratio
in Q1 2012 at 39.7
per cent, was
above the
stipulated
minimum liquidity
ratio by 9.7
percentage point.
Loan-to-deposit
ratio also rose
above the
prescribed
minimum by 38.9
percentage point.


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Economic Report First Quarter

2.5
Discount Houses’ Activities
Total assets and liabilities of the discount houses stood at
N349.4 billion at the end of the first quarter of 2012, indicating
an increase of 8.9 and 29.5 per cent above the levels at the
end of the preceding quarter and the corresponding quarter
of 2011, respectively. The increase in assets, relative to the
preceding quarter, was accounted for, largely, by the 161.8
per cent increase in claims on banks. Correspondingly, the
increase in total liabilities was attributed, largely, to the
increase of 75.2 per cent in “other amount owing”.
Discount houses’ investment in Federal Government securities
of less than 91-day maturity increased by 35.0 per cent to
N82.1 billion and represented 35.7 per cent of their total
deposit liabilities. At this level, discount houses’ investment was
24.3 percentage points below the prescribed minimum level
of 60.0 per cent for fiscal year 2012. Total borrowing by the
discount houses was N24.7 billion, while their capital and
reserves stood at N41.8 billion. This resulted in a gearing ratio of
2.9:1, compared with the stipulated maximum of 50:1 for fiscal
2012.

2.6
Capital Market Developments
2.6.1
Secondary Market
Activities on the Nigerian Stock Exchange (NSE) were mixed
during the review quarter. Available data indicated that the
volume of traded securities declined by 16.8 per cent to 19.63
billion shares, while the value rose by 2.9 per cent to N145.05
billion in 206,908 deals, compared with 23.6 billion shares
valued at N140.9 billion in 428,993 deals in the preceding
quarter. The financial services sector was the most active
(measured
by
turnover
volume),
followed
by
the
conglomerates and consumer goods sectors. The banking
sub-sector remained the most active on the Exchange with a
traded volume of 13.67 billion shares, valued at N69.65 billion,
in 105,240 deals.


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

Economic Report First Quarter

Figure 4:Volume and Value of Traded Securities

Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Value (N billion)
Volume (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)


Table 3: Traded Securities on the Nigerian Stock Exchange (NSE)
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Volume (Billion)

Value (N Billion)


2.6.2
Over-the-Counter (OTC) Bonds Market
Provisional data on the Over-the-Counter (OTC) bond market
indicated a turnover of 2.11 billion units, worth N1,808.80
billion, in 14,478 deals. The most active bond (measured by
turnover volume) was the 5.5% FGN February 2013 (7th FGN
Bond 2013 Series 1), followed by the 10.7% FGN May 2018 (5th
FGN Bond 2018 Series 2).

2.6.3
New Issues Market
There were nine (9) new and four (4) supplementary listings in
the first quarter of 2012 as shown below.


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

Economic Report First Quarter

Table 4: New and Supplementary Securities Issue for the First Quarter, 2012

Oasis Insurance Plc
1.5 Million Shares
Completion of Special Placing

Tower Funding Plc
N3.6 MPR+7% Floating Rate Bond
Part of N9Billion Medium Term Note Program

Tower Funding Plc
N3.6 MPR+5.25% Floating Rate Bond
Part of N9Billion Medium Term Note Program

Austin Laz and Company
1.08 Billion
New Listing into Electronic Products Sub-sector

Lafarge Cement WAPCO Nig. Plc
N11.88 (11.5% Fixed Rate Bond)
Part of N50 Billion Debt Issunace Porgramme

IHS Nigeria Plc
2.7 Billion Preference Share
Series II of N0.50 each at N3.08

Flour Mills of Nigeria
455.56 Million Shares
Conclusion of Rights Issue

Starcomms Plc
208 Million Shares
Part of staff Equity Incentive Scheme

Ekiti State Govt. Bond
N20 Billion
Part fo N25 Billion Debt Issunace Porgramme
10 Chellarams Plc
N540 Million
Unsecured Floating Rate Bond 2019
11 Neimeth Int'l Pharmaceuticals
482 Million Shares
Conclusion of Rights Issue
12 Access Bank Plc
N5 Billion
Conclusion of merger with Intercontinental bank
13 Benue State Govt. Bond
N13 Billion
Part of fixed rate devpt. Bond 2011/2016

2.6.4
Market Capitalization
Aggregate market capitalization of all the listed securities
(equities and bonds) stood at N11.97 trillion at the end of the
quarter under review. Market capitalization of the 187 listed
equities stood at N6.55 trillion, representing a marginal
increase of 0.3 per cent over the level of N6.53 trillion at the
end of the preceding quarter. The listed equities accounted
for 54.7 per cent of the aggregate market capitalization.

2.6.5
NSE All-Share Index
The All-Share Index, which opened at 20,730.63 at the
beginning of the quarter, closed at 20,652.47, representing a
decline of 0.4 per cent below the level at the end of
preceding quarter. At end-March 2012, two of the four
sectoral indices, the NSE Banking and the Consumer Goods
indices rose by 3.2 and 189.7 per cent, respectively, while the
NSE Oil/Gas and Insurance indices declined by 9.2 and 13.4
per cent to close at 199.9 and 124.3 points, respectively, at
the end of the first quarter.


Market
capitalization
increased,
while All-Share
Index trended
downwards
during Q1
2012.


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

Economic Report First Quarter

Figure 5: Market Capitalization and All-Share Index


Table 5: Market Capitalization and All Share Index (ASI)
Q1-09
Q2-09
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Market Capitalization (N trillion)

All-Share Index (Equities)


Q1-09
Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q3-11
Q4-11
Q1-12
Index
N billion
Market Capitalization (LHS)
All-Share Index (RHS)


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

Economic Report First Quarter

3.0
Fiscal Operations
3.1
Federation Account Operations
Available data showed that total federally-collected revenue
during the first quarter of 2012 stood at N2,897.65 billion,
representing a decline of 4.2 per cent below the level in the
preceding quarter, but an increase of 23.2 and 22.2 per cent
above the proportionate budget estimate and the level in the
corresponding quarter of 2011, respectively (Fig. 6, Table 6).
Figure 6: Components of Gross Federally Collected Revenue

Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Oil Revenue Gross
Non-Oil Revenue

Table 6: Gross Federation Account Revenue (N billion)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Federally-collected revenue (Gross)

Oil Revenue

Non-Oil Revenue


At N2,376.02 billion, gross oil receipts, which constituted 82.0
per cent of the total, exceeded the proportionate budget
estimate by 48.4 per cent, but was lower than the level in the
preceding quarter by 1.3 per cent. The increase in oil receipts
relative to the budget estimate was attributed, largely, to the
improvement in the receipts from PPT and Royalties during the
quarter under review (Fig. 7, Table 7).
Gross federally
collected
revenue fell by
4.2 per cent
below the level in
the preceding
quarter.


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

Economic Report First Quarter

Figure 7: Gross Oil Revenue and Its Components
-


Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
N billion
Others
PPT/Royalties
Crude oil/Gas Sales

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


Non-oil receipts, at N521.63 billion (18.0 per cent of the total),
was below the level in the preceding quarter and the
proportionate budget estimate by 15.1 and 30.5 per cent,
respectively. The decline in non-oil receipts reflected largely,
the fall in Corporate Taxes and the Independent Revenue of
the Federal Government during the review quarter. As a
percentage of estimated GDP for the first quarter, non-oil
revenue stood at 5.7 per cent (Fig. 8, Table 8).


Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Oil Revenue

Crude oil/Gas Sales

PPT/Royalties

Others


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

Economic Report First Quarter

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

Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
N billion
Others
Customs & Excise Duties
Companies Income Tax & Other Taxes
Value-Added Tax (VAT)

Table 8: Components of Gross Non-Oil Revenue (N billion)
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Non-Oil Revenue

Value-Added Tax (VAT)

Companies Income Tax & Other Taxes

Customs & Excise Duties

Others


As a percentage of estimated first quarter 2012 nominal GDP,
oil and non-oil revenue were 26.0 and 5.7 per cent,
respectively.
Of the gross federally-collected revenue, the sum of N1,244.11
billion (after deductions and transfers) was transferred to the
Federation Account for distribution among the three tiers of
government and the 13.0% Derivation Fund. The Federal
Government received N576.17 billion, while the state and
local governments received N292.24 billion and N225.31
billion, respectively. The balance of N130.40 billion went to the
13.0% Derivation Fund for distribution by the oil-producing
states. Also, the Federal Government received N24.62 billion
from the VAT Pool Account, while the state and local
governments received N82.07 billion and N57.45 billion,
respectively. During the quarter under review, the sum of
N440.55 billion was drawn from the excess crude account to
bridge the short-fall in revenue for the period and was shared
The sum of
N1,244.11 billion
out of the
federally
collected revenue
was set aside for
distribution by
the three tiers of
government and
the 13.0 %
Derivation Fund
for oil producing
states.


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

Economic Report First Quarter

as follows: Federal (N201.91 billion), states (N102.41 billion) and
local governments (N78.96 billion), while the oil producing
states received N57.27. Thus, the total allocation to the three
tiers of government in the first quarter of 2012 amounted to
N1,926.65 billion. This exceeded the quarterly budget estimate
by 4.9 per cent.
3.2
The Fiscal Operations of the Three Tiers of
Government
3.2.1
The Federal Government

At N825.52 billion, the Federal Government retained revenue
for the first quarter of 2012 was lower than the quarterly
budget estimate by 15.3 per cent, but exceeded the receipts
in the preceding quarter and the corresponding quarter of
2011 by 40.5 and 37.3 per cent, respectively. Of this amount,
the Federal Government share from the Federation Account,
VAT Pool Account and FGN Independent Revenue were
N576.17 billion, N24.62 billion and N15.85 billion, respectively,
while “Others” accounted for the balance of N208.87 billion,
(Fig. 9, Table 9).
Figure 9: Federal Government Retained Revenue
Federation
Account
(69.79%)
VAT Pool
Account (2.98%)
FGN Independent
Revevue (1.92%)
Others
(25.31%)


Table 9: Federal Government Fiscal Operations (N billion)
Q2-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Retained Revenue

Expenditure

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


Federal government
estimated retained
revenue was lower
than the
proportionate budget
estimate, while total
expenditure was
lower than the
proportionate 2011
budget provision for
the quarter.


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

Economic Report First Quarter

Total expenditure for the first quarter of 2012 stood at N902.47
billion, indicating lower outlay relative to the levels in the
quarterly budget estimate and the preceding quarter by 27.9
and 5.3 per cent, respectively. The development was
attributed to the delay in capital releases during the period. A
breakdown of total expenditure showed that the recurrent
component accounted for 71.2 per cent, capital component
22.6 per cent, while statutory transfers accounted for the
balance of 6.2 per cent (Fig. 10). Further breakdown of the
recurrent expenditure showed that the non-debt component
accounted for 72.0 per cent, while debt service payments
accounted for the balance of 28.0 per cent.
Thus, the fiscal operations of the Federal Government resulted
in an estimated deficit of N77.0 billion or 0.8 per cent of
estimated GDP for the first quarter, compared with the
quarterly budgeted deficit and the preceding quarter deficit
of N276.11 billion and N365.07 billion, respectively. The deficit
was financed mainly from domestic sources.
Figure 10: Federal Government Expenditure
Recurrent
Capital
Transfers
Capital
(22.55%)
Transfers
(6.26%)
Recurrent
(71.19%)


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

Economic Report First Quarter

3.2.2
Statutory Allocations to State Governments

Total
allocation
to
state
governments
(including
the
Federation account, VAT and 13.0 per cent Derivation Fund)
stood at N705.77 billion during the review quarter. This
represented a decline of 2.8 per cent below the preceding
quarter’s level, but an increase of 57.3 per cent over the
corresponding quarter of 2011.
Further breakdown showed that, at N82.06 billion, receipts
from the VAT Pool Account was 3.8 and 16.0 per cent higher
than
the
levels
in
the
preceding
quarter
and
the
corresponding quarter of 2011, respectively, while receipts
from the Federation Account stood at N623.71 billion. On a
monthly basis, the sum of N252.52 billion, N225.01 billion and
N228.24 billion was allocated to the 36 state governments in
January, February and March 2012, respectively.
3.2.3
Statutory Allocations to Local Government Councils

Total receipts by the local governments from the Federation
and VAT Pool Accounts during the first quarter of 2012, stood
at N383.81 billion. This amount was lower than the level in the
preceding quarter by 4.1 per cent, but exceeded the level in
the corresponding quarter of 2011 by 52.5 per cent. Of the
total amount, allocation from the Federation Account was
85.0 per cent, while VAT Pool Account accounted for the
balance of 15.0 per cent. On a monthly basis, the sum of
N137.08 billion, N122.13 billion and N124.60 billion was
allocated to the 774 local governments in January, February
and March 2012, respectively.
.


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

Economic Report First Quarter

4.0
Domestic Economic Conditions
Aggregate output measured by the real gross domestic product
(GDP) grew by 6.6 per cent, compared with 7.7 per cent in the
preceding quarter. The development was attributed largely to the
growth in the non-oil sector, particularly services, agriculture, building
and construction sectors. Crude oil production was estimated at 2.06
million barrels per day (mbd) or 187.46 million barrels for the quarter.
The end-period inflation rate for the first quarter of 2012, on year-onyear basis, was 12.1 per cent, compared with 10.3 and 12.8 per cent
in the preceding quarter and the corresponding quarter of 2011,
respectively. The inflation rate on a 12-month moving average basis
was 10.9 per cent, compared with the 10.8 and 13.0 per cent in the
preceding quarter and corresponding period of 2011.
4.1
Aggregate Output
Aggregate output in the first quarter measured by gross
domestic product (GDP) at 1990 basic prices grew by 6.6 per
cent, compared with 7.7 per cent recorded in the preceding
quarter. The growth in the review quarter was driven largely by
the growth in the non-oil sector, particularly services. Real nonoil GDP stood at 7.9 per cent and accounted for 84.2 per cent
of total GDP in the quarter under review. Real oil GDP,
comprising crude petroleum and natural gas, grew by 0.1 per
cent when compared with the level in the preceding quarter
and accounted for 15.8 per cent of the total GDP (Fig. 11,
Table 10).
Figure 11: Real GDP Rate and Share of Oil and Non-Oil in GDP

-2

Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
% of GDP
Percent
Oil Share of GDP (RHS)
Non-Oil Share of GDP (RHS)
GDP Growth (LHS)
Oil GDP Growth(LHS)


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

Economic Report First Quarter

Table 10: Growth Rate of Real GDP and Sectoral Shares (Percent)
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Growth Rate (%)
Real GDP

Oil (Crude Petroleum/Natural Gas)

Non-oil

Share in Real GDP (%)
Real GDP

Oil (Crude Petroleum/Natural Gas)

Non-Oil


4.2
Agricultural Sector
Available data indicated that agricultural activities in most
parts of the country during the first quarter of 2012 were
dominated by harvesting of tree crops and preparation of
land for cultivation against the 2012 cropping season. In the
livestock sub-sector, farmers replenished their stock of broilers
and layers in anticipation for increased demand during the
Easter festivity.
A total of N840.8 million was guaranteed to 2,547 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the first quarter of 2012. This represented a decline of 81.1 and
13.3 per cent below the levels in the preceding quarter and
the corresponding quarter of 2011, respectively.
A sub-sectoral analysis of the loans guaranteed indicated that
the food crops sub-sector received the largest share of N436.9
million (52.0 per cent) for 1,769 beneficiaries, while the
livestock sub-sector got N286.4 million (34.1 per cent) for 587
beneficiaries. Also, 148 beneficiaries in the fisheries sub-sector
obtained N102.5 million (12.2 per cent); N8.2 million (0.97 per
cent) was disbursed to 23 beneficiaries in the cash crop subsector; ‘Others’ sub-sector obtained N6.2 million (0.7 per cent)
guaranteed to 18 beneficiaries and 2 beneficiaries in the
mixed crop sub-sector received N0.6 million (0.07 per cent).
Further analysis showed that 32 states and the Federal Capital
Territory, benefited from the scheme during the quarter, with
the highest and lowest sums of N228.9 million (27.2 per cent)
and N0.5 million (0.06 per cent) guaranteed to farmers in
Lagos and Ebonyi states, respectively.
At end-March 2012, the total amount released by the CBN


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

Economic Report First Quarter

under the Commercial Agriculture Credit Scheme (CACS) to
the participating banks for disbursement stood at N175.51
billion (for two hundred and twenty one projects). The
beneficiaries included twenty nine state governments (Table
11).


4.3
Industrial Production
Industrial activities declined during the first quarter of 2012
relative to the level in the preceding quarter. At 135.35
(1990=100), the estimated index of industrial production fell by
2.5 per cent below the level in the preceding quarter. It
however, showed an increase of 7.7 per cent over the level
recorded
in
the corresponding
quarter
of
2011.
The
development was attributed to the decline in activities in the
electricity and manufacturing sub-sectors.
The estimated index of manufacturing production, at 105.89
(1990=100), declined by 3.9 per cent below the level in the
preceding quarter, but increased by 12.4 per cent over the
level in the corresponding period of 2011. The estimated
manufacturing capacity utilization rate, relative to the level in
the corresponding period of 2011, also declined by 2.8
The decline in
industrial
activities relative
to the preceding
quarter was
accounted for by
the decline in
activities in the
manufacturing
and electricity
sub-sectors.
Manufacturing
capacity utilization
was estimated to
have declined by
2.8 percentage
points in the review
quarter.
Table 11: Disbursement of Credit Under the Commercial Agriculture Credit Scheme (CACS)
S/N
Participating Banks
Amount Disbursed (N billion) Number of Projects/State Governments

United Bank for Africa (UBA) Plc
39.76

Zenith Bank
23.76

First Bank of Nigeria Plc
18.97

Union Bank Nigeria PLC
18.04

Unity Bank Plc
16.78

Stanbic IBTC Bank
11.16

Access Bank Plc
10.26

Skye Bank Plc
9.20

Fidelity Bank Plc
7.57

GTBank Plc
5.55

Sterling Bank Plc
4.76

Eco Bank Plc
2.67

Mainstreet Bank Plc
2.00

Diamond Bank Plc
1.90

Citibank Plc
1.50

Wema Bank Plc
0.72

FCMB Plc
0.58

Enterprise Bank Plc
0.34

TOTAL
175.51

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

Economic Report First Quarter

percentage points to 55.4 per cent. The development was
attributed to the decline in business confidence due to the
delay in the passage of 2012 budgets (Fig.12, Table 11).

Figure 12: Manufacturing Capacity Utilization Rate (%)

At 145.89 (1990=100), the index of mining production
increased marginally by 0.1 and 9.8 per cent above the levels
in the preceding quarter and the level in the corresponding
quarter of 2011, respectively.
At 2,788.6 MW/h, estimated average electricity generation fell
by 11.4 per cent, below the level in the preceding quarter. The
development resulted from the decline in gas supply to the
thermal stations as well as the fall in water level at the hydro
stations.
At 2,644 MW/h, estimated average electricity consumption,
fell by 1.2 per cent from the level in the preceding quarter. The
development was attributed to the decline in electricity
generation (Fig. 13, Table 12).

Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Percent
Average
electricity
generation and
consumption
declined during
the quarter
under review.


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

Economic Report First Quarter

Figure 13: Index of Industrial Production (1990=100)


Table 12: Index of Industrial Production and Manufacturing Capacity Utilization Rate
Q3-09
Q4-09
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
All Sectors (1990=100)

Manufacturing

Mining

Electricity

Manufacturing Capacity Utilization (%)

Petroleum Sector
Nigeria’s crude oil production, including condensates and
natural gas liquids, was estimated at 2.06 million barrels per
day (mbd) or 187.46 million barrels during the first quarter of
2012, compared with 2.19 mbd or (201.48 million barrels) in the
preceding quarter. This represented a decline of 0.13 mbd or
5.9 per cent in production level. Consequently, crude oil
export was estimated at 1.61 mbd or (146.51 million barrels) in
the review period, compared with 1.74 mbd (160.08 million
barrels) in the preceding quarter, representing a decline of 7.5
per cent. The development was attributed to the massive
leakage that occurred on Shell’s Bonga Oil Field and the
Nembe Trunk Pipeline in the Niger Delta in January 2012.
Allocation of crude oil for domestic consumption was 0.45
mbd or 40.95 million barrels during the quarter under review.

Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Index
Mining
Electricity
All Sectors
Manufacturing
Crude oil and
natural gas
production
decreased by 5.9
per cent, to 2.06
mbd during Q1
2012.
Crude oil export
also recorded a
decrease in Q1
2012.


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

Economic Report First Quarter

At an estimated average of US$121.10 per barrel, the price of
Nigeria’s reference crude, the Bonny Light (37o API), rose by
7.9 per cent, over the level in the preceding quarter. The
average prices of other competing crudes, namely the West
Texas Intermediate, the U.K Brent and the Forcados also
increased to US$101.74, US$119.57 and US$122.88 per barrel,
respectively, from US$88.59, US$110.85 and US$113.4 per barrel
in the preceding quarter. Similarly, at US$117.58 per barrel, the
average price of OPEC’s basket of eleven crude streams also
rose by 9.0 and 17.5 per cent above the levels in the
preceding quarter and the corresponding quarter of 2011,
respectively. The development was attributed, largely, to the
fears of supply disruptions from Iran, Sudan and Syria, which
led to an increase in speculative activities in the crude oil
futures markets (Fig. 14, Table 13).
Figure 14: Trends in Crude Oil Average Prices

Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
US$ per barrel
Bonny Light
OPEC Basket
Average crude oil
prices, including
Nigeria’s
reference crude,
Bonny Light (37o
API), rose in the
international
crude oil market
in Q1 2012.


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

Economic Report First Quarter

Table 13: Average Crude Oil Prices in the International Oil Market
Q3-09
Q4-09
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Bonny Light

OPEC Basket


4.5
Consumer Prices3
Available
data
showed
that
the
all-items
composite
Consumer Price Index (CPI) at the end of the first quarter of
2012, was 132.6 (November 2009=100), representing an
increase of 5.2 and 12.1 per cent over the levels in the
preceding quarter and the corresponding quarter of 2011,
respectively. The development was attributed, largely, to the
rise in the prices of food items and non-alcoholic beverages,
as well as clothing and foot wear, kerosene and diesel and
transport.
The urban all-items CPI at the end of the first quarter 2012 was
130.7 (November 2009=100), indicating an increase of 6.9 and
13.7 per cent over the levels in the preceding quarter and the
corresponding quarter of 2011, respectively. Similarly, at 129.0
(November 2009=100), the rural all-items CPI at the end of the
quarter, increased by 4.2 and 11.0 per cent over the levels in
the preceding quarter and the corresponding quarter of 2011,
respectively (Fig. 15, Table 14).

3 New CPI with November 2009 = 100 as base and new weight based on the 2003/2004 Nigeria
Living Standard Survey (NLSS) was released by the National Bureau of Statistics (NBS) on 18th
October 2010.
The general price
level rose in Q1
2012 relative to Q4
2011. This was on
account of the
increase in the
prices of food
items and nonalcoholic
beverages, as well
as clothing and
footwear,
kerosene and
diesel and
transport.


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

Economic Report First Quarter

Figure 15: Consumer Price Index


Table 14: Consumer Price Index (November 2009=100)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Composite

Urban

Rural


The end-period inflation rate for the first quarter of 2012, on a
year-on-year basis was 12.1 per cent, compared with 10.3
and 12.8 per cent in the preceding quarter and the
corresponding quarter of 2011, respectively. The inflation rate
on a twelve-month moving average basis for the first quarter,
was 10.9 per cent, compared with 10.8 and 13.0 per cent in
the preceding quarter and the corresponding quarter of 2011,
respectively (Fig. 16, Table 15).

Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Index
Composite
Urban
Rural
The headline
inflation (y-o-y)
increased by 1.8
percentage point, in
Q1 2012.


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Figure 16: Inflation Rate

Table 15: Headline Inflation Rate (%)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
12-Month Moving Average

Year-on-Year


Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Percent
12-Month Average
Year-on-Year


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5.0
External Sector Developments
Provisional data indicated that foreign exchange inflow through the
CBN in the first quarter of 2012 declined by 8.9 per cent below the
level in the preceding quarter, but rose by 13.1 per cent over the
level in the corresponding quarter of 2011. Outflow also declined by
30.8 per cent below the level in the preceding quarter, but
exceeded the level in the corresponding quarter of 2011 by 2.1 per
cent. Total non-oil export receipts by banks rose significantly by 76.2
per cent over the level in the preceding quarter. The average Naira
exchange rate vis-à-vis the US dollar, depreciated by 1.4 per cent at
the Wholesale Dutch Auction System (wDAS). At the Interbank
segment of the market, the naira appreciated by 0.7 per cent to
N159.20 per dollar, while at the Bureau- De-Change (BDC) segment,
it remained at the preceding quarter’s level of N161.63. The gross
external reserves rose by 7.8 per cent over the preceding quarter’s
level.
5.1
Foreign Exchange Flows
Foreign exchange inflow and outflow through the CBN in the
first quarter of 2012 amounted to US$12.12 billion and US$9.76
billion, respectively, resulting in a net inflow of US$2.36 billion.
Relative to the levels in the preceding quarter, inflow and
outflow fell by 8.9 and 30.8 per cent, respectively. The fall in
inflow was attributed largely to the 82.0 per cent decline in
non-oil receipts, while the fall in outflow was, largely, due to
the decline in the funding of the wDAS segment of the foreign
exchange market by 33.7 per cent (Fig. 17, Table 16).
Foreign exchange
inflow and
outflow through
the CBN fell by 8.9
and 30.8 per cent,
respectively to
post a net inflow
of US$2.36 billion.


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Figure17: Foreign Exchange Flows Through the CBN
-10,000
-5,000


Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
US$ million
Inflow
Outflow
Netflow

Table 16: Foreign Exchange Flows Through the CBN (US$ million)
Q4-09
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Inflow

Outflow

Netflow


Available data on aggregate foreign exchange flows through
the economy indicated that total inflow amounted to
US$28.27 billion, representing an increase of 12.1 and 3.5 per
cent above the levels in the preceding quarter and the
corresponding quarter of 2011, respectively. Oil sector
receipts, which accounted for 41.1 per cent of the total, stood
at US$11.63 billion, compared with the respective levels of
US$10.61 billion and US$9.67 billion in the preceding quarter
and the corresponding quarter of 2011.
Non-oil public sector inflows, which accounted for 1.7 per cent
of the total foreign exchange flows, declined significantly by
82.0 per cent below the preceding quarter’s level, while
autonomous inflow, which accounted for 57.1 per cent,
increased by 35.5 per cent over the preceding quarter’s level.
At US$10.09 billion, aggregate foreign exchange outflow from
the economy fell by 30.6 per cent below the level in the
preceding quarter. It was, however, an increase of 1.6 per
Autonomous
inflows into the
economy
increased by
35.5 per cent, in
Q1 2012 relative
to the preceding
quarter.


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Economic Report First Quarter

cent over the level in the corresponding quarter of 2011. The
outcome, relative to the preceding quarter, was accounted
for by a 33.7 per cent decline in the funding of wDAS.
5.2
Non-Oil Export Earnings by Exporters
Total non-oil export earnings by exporters, at US$1.04 billion,
increased by 76.2 and 14.3 per cent over the levels in the
preceding quarter and the corresponding quarter of 2011,
respectively. The development was attributed largely to the
increase in the exports of industrial, food, manufactured,
agricultural and transport products during the review quarter.
A breakdown of the proceeds in the review quarter showed
that manufactured, industrial, agricultural, food, mineral and
transport products earned US$493.4 million, US$332.2 million,
US$136.0, US$42.9 million, US$31.1 million, and US$4.3 million,
respectively.
The shares of manufactured products, industrial, agricultural
products, minerals, food products and transport in non-oil
export proceeds were 47.4, 32.0, 13.1, 4.1, 3.0 and 0.4 per
cent, respectively.
5.3
Sectoral Utilisation of Foreign Exchange

The mineral and oil sector accounted for the bulk (27.3 per
cent) of total foreign exchange disbursed in the first quarter of
2012, followed by industrial sector (20.6 per cent). Other
beneficiary sectors, in a descending order included: invisibles
(18.7), food products (14.0 per cent), manufactured products
(13.4 per cent), transport sector (5.3 per cent) and agricultural
products (0.7 per cent) (Fig.18).
.
The minerals
and oil sector
accounted for
the bulk of the
total foreign
exchange
disbursed
during Q1 2012.
Total non-oil export
earnings by exporters
increased during the
first quarter of 2012 on
account of an increase
in the prices of most
traded commodities.


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Figure18: Sectoral Utilization of Foreign Exchange

Agricultural
Transport
Food
Manufactured
Minerals & Oil
Industrial
Invisibles
Q3-11
Q4-11
Q1-12
Percent of Total

5.4
Foreign Exchange Market Developments
Foreign exchange demand by the authorized dealers stood
at US$7.36 billion, indicating a decline of 40.2 and 26.1 per
cent below the levels in the preceding quarter and the
corresponding quarter of 2011, respectively. The sum of
US$7.98 billion was sold by the CBN during the review quarter,
indicating a decline of 31.9 and 0.9 per cent below the levels
in the preceding quarter and the corresponding quarter of
2011, respectively (Fig. 19, Table 17).
Figure 19: Demand for and Supply of Foreign Exchange

Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
US$ billion
Forex Sales at WDAS
Forex Demand at WDAS
Supply of Forex to BDC
Total Forex Supply


Demand for
foreign exchange
by authorized
dealers in Q1
2012 declined by
40.2 and 26.1 per
cent, below the
levels in the
preceding quarter
and the
corresponding
quarter of 2011,
respectively.


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Table 17: Demand for and Supply of Foreign Exchange (US$ billion)
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Forex Sales at WDAS

Forex Demand at WDAS

Supply of Forex to BDC

Total Forex Supply(BDC and WDAS)


Under the wDAS, the average exchange rate of the Naira visà-vis the US dollar depreciated by 1.4 per cent to N157.95 per
US dollar from N155.74 in the preceding quarter. In the bureaude-change segment of the market, the Naira traded at an
average of N161.63 per US dollar, same as in the preceding
quarter, but depreciated by 3.5 per cent below the level in
the corresponding quarter of 2011. At the interbank segment,
the Naira exchanged for an average of N159.20 to the US
dollar in the first quarter of 2012, compared with N160.27 and
N156.11 per US dollar in the preceding quarter and the
corresponding quarter of 2011, respectively (Fig. 20, Table 17).
The premium between the wDAS and the bureau-de-change
rates narrowed from 3.8 per cent in the preceding quarter to
2.3 per cent. Similarly, the premium between the wDAS and
interbank rates narrowed from 2.9 per cent in the preceding
quarter to 0.8 per cent in the review quarter (Fig. 20, Table 18).
Figure 20: Average Exchange Rate Movements

Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
N/US $
Average WDAS/RDAS
Average BDC
Average Interbank


The Naira exchange
rate vis-à-vis the US
dollar depreciated at
the WDAS segment.
It appreciated at the
interbank segments,
while at the BDC
segment, it
remained
unchanged at the
preceding quarter’s
level.
The premium
between the WDAS
rate and the rates in
the other two
segments were 0.8
per cent for the
interbank and 2.3 per
cent for the BDC
segment.


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Table 18: Exchange Rate Movements and Exchange Rate Premium
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Average Exchange Rate (N/US$)
WDAS/RDAS

BDC

Interbank

Premium (%)
WDAS/BDC

WDAS/Interbank


Figure 21: Exchange Rate Premium

Q1-09
Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Percent
WDAS/BDC
WDAS/Interbank


5.5
Gross External Reserves
The gross external reserves at the end of the first quarter of
2012 stood at US$35.20 billion, indicating an increase of 7.8 per
cent above the US$32.64 billion recorded at the end of the
preceding quarter. A breakdown of the reserves showed that
CBN reserves stood at US$26.69 billion (75.8 per cent),
Federation reserves was US$6.03 billion (17.1 per cent) and
the Federal Government reserves was US$2.48 billion (7.1 per
cent) (Fig. 22, Table 19).
Gross external
reserves rose during
the first quarter of
2012.


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Figure 22: Gross External Reserves

Table 19: Gross External Reserves (US$ million)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
External Reserves


Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
US$ million


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6.0 Global Economic Conditions
6.1 Global Output
The April 2012 edition of the International Monetary Fund (IMF)
World Economic Output (WEO), reported that the global
economy was slowly improving, but growth was expected to
be weak, especially in Europe, while unemployment in many
advanced economies would stay high. Global output was
projected to grow by 3.5 percent in 2012, compared with3.9
per cent in 2011. The report projected growth in the US to 2.1
and 2.4 per cent in 2012 and 2013, respectively, compared
with 1.7 per cent in 2011, reflecting the ongoing fiscal
consolidation and improving housing prices. In Asia, weaker
external demand had dimmed its outlook. Growth in Asia was
projected to grow by 7.3 per cent, with China slowing to 8.2
per cent, as against 7.8 per cent in 2011, while India was
projected to grow by 6.9 per cent in 2012. In Latin America
and the Caribbean, growth was projected to at 3.8 and
4.1per cent in 2012 and 2013, respectively. Output growth in
Sub-Saharan Africa was projected at 5.4 per cent in 2012,
compared with 5.1 per cent in 2011.
6.2 Global Inflation
Projections for inflation varied across countries and regions.
Overall, global inflation was projected at 6.2 percent in 2012,
compared with 7.1 per cent in 2011, partly as a result of lower
commodity prices. In the Euro area, inflation was projected to
rise to 1.8 per cent in 2012, compared with 1.4 per cent in
2011. In emerging Europe, the picture is mixed, but pressures
were expected to ease during 2012. In emerging Asia,
headline inflation was expected to sustain its downward path,
but was projected to stay elevated in parts of the region,
notably in India and Indonesia. In Latin America, many of the
major economies were operating close to full capacity and
inflation was projected to decline moderately to 6.4 percent
in 2012 from 6.6 percent in 2011. In the Commonwealth of
Independent States (CIS), Middle East and North Africa
(MENA), and parts of Sub-Saharan Africa (SSA), inflation
pressure was expected to stay quite elevated at 7.1, 9.5 and
According to the
World Economic
Outlook (WEO),
the global output
was projected to
grow at 3.5
percent in 2012.


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Economic Report First Quarter

9.6 percent, respectively, in 2012, reflecting accommodative
macroeconomic policies and supply-side disruptions.
6.3 Global Commodity Demand and Prices
Oil prices stood at an average of US$125.0 per barrel in the first
quarter of 2012. There were renewed uncertainties that oil
supply disruptions, particularly Iran’s exports disruption to
Organization for Economic Cooperation and Development
(OECD) economies could trigger a much larger price spike
(an initial oil price increase of about 20 to 30 per cent) during
the course of the year. Furthermore, the Fund projected a
decline in the non-fuel commodity price index of 10.3 per cent
in 2012, reflecting expected improved food supply during the
review year.
6.4 International Financial Markets
The
performance
of
international
stock
markets
was
predominantly positive across the regions of the world during
the first quarter of 2012. The development was due, largely, to
the positive macroeconomic data from the United States of
America and the on-going efforts to curtail the sovereign debt
crisis in the Euro Area. In North America, the S&P 500 index led
the region with 12.0 per cent gain, followed by the Mexico
Bolsa index, which rose by 6.6 per cent. In South America, the
Columbian IGBC General, and Argentine Merval indices also
rose by 18.7 and 9.0 per cent, respectively. Similarly, in Europe,
the German DAX and French CAC 40 indices were up by 17.8
and 8.4, percent, respectively. The Japanese Nikkei 225 index
led the rebound in the Asian stock markets with a gain of 19.3
per cent, followed by the Indian BSE Sensex and Chinese
Shanghai Stock Exchange, with gains of 12.6 and 2.9 per cent,
respectively. In Africa, all the selected stock indices recorded
positive gains at the end of the first quarter of 2012 except the
All-Share Index (ASI) of the Nigerian Stock Exchange (NSE) that
recorded a decline of 0.4 per cent. The Egyptian EGX CSE 30,
Ghanaian GSE, Kenyan Nairobi NSE 20 and South African JSE
indices gained 36.6, 8.0, 5.1 and 4.9 per cent, respectively.


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Most major world currencies appreciated against the U.S.
Dollar in the review period. In Europe, all selected currencies
(Russian Ruble, Euro and British Pound) appreciated against
the U.S Dollar by 8.7, 2.7 and 2.4 per cent, respectively. In
Asia, the Indian Rupee and Chinese Yuan appreciated
against the U.S. Dollar by 4.1 and 0.02 per cent, respectively,
while the Japanese Yen depreciated against the U.S. Dollar by
7.8 per cent. In North America, the Mexican Peso and
Canadian Dollar appreciated against the U.S. Dollar by 8.1
and 2.1 per cent, respectively. In South America, the
Colombian Peso and Brazilian Real appreciated against the
U.S. Dollar by 7.7 and 2.3 per cent, respectively, while the
Argentine Peso depreciated against the U.S Dollar by 1.8 per
cent. In Africa, the South African Rand, Kenyan Shilling and
Nigerian Naira appreciated against the U.S. Dollar by 5.2, 2.7
and 0.4 per cent, respectively, while the Egyptian Pound and
Ghanaian Cedi depreciated against the US Dollar by 0.2 and
8.4 per cent, respectively.
6.5 Other International Economic Developments
and Meetings
Other major international economic developments and
meetings of relevance to the domestic economy during the
review quarter included: the World Economic Forum Annual
Meeting held at Davos-Klosters, Switzerland from January 2529, 2012 on the theme: “The Great Transformation: Shaping
New Models”.
Also, the meeting of the National Coordinating Committee
(NCC) on the Economic Community of West African States
(ECOWAS) Multilateral Surveillance Mechanism was held in
Ouagadougou, Burkina Faso, from January 23 – 27, 2012. The
meeting was convened to receive presentation on Members’
economic and financial situation during the first half of 2011
and assess their progress towards achieving macroeconomic
convergence, which is critical to attaining monetary union in
the West African sub-region.
Furthermore, the 18th African Union (AU) Heads of State and
Government Summit was held in Addis Ababa, Ethiopia from
January 29 - 30, 2012 with the theme “Boosting Intra-African


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Economic Report First Quarter

Trade”. The Heads of State adopted 25 decisions, one
resolution and two declarations. One major decision taken at
the Summit was the suspension of the elections of the
Chairperson and Deputy Chairperson of the AU Commission,
alongside that of eight Commissioners.
In addition, the AU Commission and the US Agency for
International Development (USAID), on February 1, 2012,
discussed the upcoming conference on the Horn of Africa.
Among the issues deliberated upon included: the Grow Africa
Initiative, the African Risk Capacity (ARC) and strengthening
of the African Mission to Somalia (AMISOM) with the aim of
placing these issues on the G8 agenda, and attracting funds
for the programmes. The discussion on the Africa Risk Capacity
centered on improving emergency response to food
insecurity.
The Board of the International Monetary Fund (IMF) concluded
discussions on its staff report on Article IV Mission to Nigeria on
February 22, 2012. The Nigerian authorities were applauded by
the IMF team for its countercyclical policies that have
supported economic activity in challenging circumstances.
They also supported Nigeria’s strategy to rebuild fiscal buffers
through prioritization of public expenditure, continued subsidy
reform, and improved tax administration.

Furthermore, the first Bureau Meeting of the Association of
African Central Banks (AACBs) was hosted by the Central
Bank of Nigeria on February 29, 2012. The meeting was
preceded by a meeting of the Technical Committee of the
AACB and that of the Joint Technical Committee of the
African Union Commission and the AACB on February 27 and
28, 2012, respectively.
In addition, a task force made up of officials of the ECOWAS
Commission and the West African Monetary Institute (WAMI)
at the end of a three-day meeting, agreed on mechanisms to
boost regional trade by eliminating impediments to intracommunity trade and improve the implementation of the
ECOWAS Trade Liberalization Scheme (ETLS), which is one of
the pillars of the region’s integration agenda.


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Finally, a meeting of experts of the three Local Bilateral
Committees of the Nigeria – Niger Joint Commission was held
in Katsina State, Nigeria, from March 19-24, 2012. The meeting
examined issues of common interest to the people of the
border areas, particularly, construction of secondary roads
between the two countries, progress on the re-demarcation of
the Nigeria - Niger international boundary, food security, trade
and industry, health, education, sports, youth activities,
environment, water resources and renewable sources of
energy.


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APPENDIX TABLES


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Table A1: Money and Credit Aggregates
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Domestic Credit (Net)

Claims on Federal Government (Net)

Central Bank (Net)

Banks

Claims on Private Sector

Central Bank

Banks

Claims on Other Private Sector

Central Bank

Banks

Claims on State and Local Government

Central Bank
Banks

Claims on Non-financial Public Enterprises
Central Bank
Banks
Foreign Assets (Net)

Central Bank

Banks

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)


2065.1
2784.1
2527.6
Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

N billion

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


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Table A2: Money and Credit Aggregates (Growth Rates)
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Government

Claims on Non-financial Public Enterprises

Foreign Assets (Net)

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)


-2.6

21.44
-3.7
Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Governments
3.7
2.9


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

Other Asset (Net)

Total Monetary Assets (M2)


Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Percentage Change Over Preceding Quarter
Percentage Change Over Preceding December

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


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Table A3: Federal Government Fiscal Operations (N billion)
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Q1-12
Retained Revenue

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Crude

Others

Expenditure

Recurrent

Capital

Transfers

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


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Table A4: Gross Domestic Product at 1990 Basic Prices

Source: National Bureau of Statistics.
1 Provisional.


Q4-2010
Q1-20111
Q2-20111
Q3-20111
Q4-20111
Q1-20121
Real GDP

Oil GDP

Crude Petroleum & Natural Gas

Non-oil GDP

Agriculture

Industry (excluding crude petroleum/natural Gas)

Building & Construction

Wholesale & Retail Trade

Services

Real GDP


Oil GDP

Crude Petroleum & Natural Gas

Non-oil GDP

Agriculture

Industry (excluding crude petroleum/natural Gas)

Building & Construction

Wholesale & Retail Trade

Services

Real GDP

Oil GDP

Crude Petroleum & Natural Gas

Non-oil GDP

Agriculture

Industry (excluding crude petroleum/natural Gas)

Building & Construction

Wholesale & Retail Trade

Services

N billion
Relative Share (%)
Growth Rate (%)


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