ECONOMIC REPORT
THIRD QUARTER 2017


CENTRAL BANK OF NIGERIA


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

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


Subscription to the Quarterly Economic Report is available without charge to institutions, corporations,
embassies and development agencies. Individuals, on written request, can obtain any particular issue
without a charge. Please direct all inquiries on the publication to the Director of Research, Central Bank
of Nigeria, P.M.B. 187, Garki, Abuja, Nigeria.

The Quarterly Reports can also be freely downloaded from the CBN website: www.cbn.gov.ng


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

Contents


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


Text Tables

Appendix Tables


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

Figures


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

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

Economic Report Third Quarter

1.0 Summary1
Growth in the monetary aggregates, on quarter-on-quarter basis,
decelerated in the third quarter of 2017. Broad money supply (M2)
fell by 0.1 per cent below the level at end-June 2017, on account of
decline in domestic credit (net) and other asset (net). Similarly,
narrow money supply (M1)fell by 1.2 per cent, on quarter-on-quarter
basis, due to contraction in its currency and demand deposit
components. Over the level at end-December 2016, broad money
supply (M2) and narrow money supply (M1), fell by 6.9 and 10.7 per
cent, respectively.
Banks’ lending rates trended upward, while deposit rates showed
mixed developments in the review quarter. With the exception of
the average savings and term deposit as well as the 12 month and
over 12 month deposit rates which fell below the levels at end-June
2017, all other deposit rates rose at the end of the review quarter.
The prime and maximum lending rates rose above the levels in the
preceding quarter. Consequently, the spread between the
weighted average term deposit and maximum lending rates
widened to 22.27 percentage points at end-June 2017. Similarly, the
margin between the average savings and the maximum lending
rates widened by 0.37 percentage point to 26.76 percentage points.
The weighted average inter-bank call rate fell to 18.45 per cent from
33.11 per cent in the preceeding quarter.
The total value of money market assets outstanding at the end of
the third quarter of 2017 stood at N12,025.33 billion, showing an
increase of 3.0 per cent, in contrast to 0.6 per cent decline at endJune 2017. The development reflected increase in Commercial
Paper, Federal Governmnet of Nigeria (FGN) Bonds and Nigerian
Treasury Bills (NTBs) outstanding in the review quarter. Transactions on
the Nigerian Stock Exchange (NSE) indicated mixed developments.
Federally-collected revenue, at N2,299.37 billion in the third quarter
of 2017, was lower than the quarterly budget estimate by 16.7 per
cent, but was 46.1 per cent above the receipts in the preceding
quarter. The development reflected the shortfall in both oil and nonoil revenue in the review quarter. Federal Government estimated
retained revenue and total expenditure were N957.22 billion and
N1,358.98 billion, respectively, resulting in an estimated deficit of
N401.76 billion in the third quarter of 2017.
There was improvement in agricultural activities due to widespread

1 Data on monetary aggregates, government spending and foreign
exchange flows are provisional and subject to changes


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

Economic Report Third Quarter

rainfall in the review quarter. Farmers in the Southern part of the
country were mostly engaged in harvesting of maize and yam, while
harvesting of potatoes, maize and groundnuts dominated in the
Central and Northern states. In the livestock sub-sector, farmers
engaged in the poultry and migration of cattles from the Northern
states to other regions in search of green pastures. The end-period
inflation, on year-on-year and 12-month moving average basis for
the third quarter of 2017 were 15.98 per cent and 17.2 per cent,
respectively.
World crude oil demand and supply were estimated at 97.49 mbd
and 96.43 mbd, respectively, in the third quarter of 2017. Nigeria’s
crude oil production, including condensates and natural gas liquids,
was estimated at an average of 1.83 million barrels per day (mbd)
or 168.36 million barrels (mb) for the third quarter of 2017. Crude oil
export was estimated at 1.38 mbd, while deliveries to the refineries
for domestic consumption stood at 0.45 mbd or 41.40 million barrels
in the review quarter. The average price of Nigeria’s reference
crude, the Bonny Light (370 API), was US$52.92 per barrel, compared
with US$50.21 per barrel in the preceding quarter.
Foreign exchange inflow and outflow through the CBN amounted to
US$11.98 billion and US$9.34 billion, respectively, resulting in a net
inflow of US$2.64 billion. Foreign exchange sales by the CBN to the
authorised dealers amounted to US$6.49 billion. The average
exchange rate of the naira vis-à-vis the US dollar at the investor and
exporter window appreciated by 4.0 per cent to N362.48/US$, while
the rate at the inter-bank segment depreciated marginally by 0.01
per cent to N305.81/US$ at end-September 2017. The The external
reserves increased by 9.3 per cent to US$33.16 billion at the end–
September 2017.
Major international economic developments and meetings of
importance to the domestic economy in the review period included:
meeting of the African Caucus, comprising African Governors of the
International Monetary Fund and the World Bank Group held in
Gaborone, Botswana from August 2 – 4, 2017 and the 40th Ordinary
meeting of the Assembly of Governors of the Association of African
Central Banks (AACB), hosted by the South Africa Reserve Bank
(SARB) on August 16, 2017 at its Head Office in Pretoria, South Africa.


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

Economic Report Third Quarter

2.0 Financial Sector Developments
On quarter-on-quarter basis, broad money supply (M2), fell by 0.1 per
cent below the level at end-June 2017, reflecting the fall in domestic
credit (net) and other asset (net) of the banking system. Similarly,
narrow money supply (M1) fell by 1.2 per cent relative to the level in
the preceding quarter. Banks’ lending rates trended upward, while
deposit rates showed mixed developments. The value of money
market assets outstanding rose in the review quarter. Developments
on the the Nigerian Stock Exchange (NSE) indicated mixed
outcomes.
2.1 Monetary and Credit Developments
Growth in the major monetary aggregates decelerated in the
third quarter of 2017, reflecting the Bank‟s tight monetary
policy stance. On Quarter-on-quarter basis, broad money
supply (M2), fell by 0.1 per cent to N21,953.99 billion,
compared with the decline of 1.5 per cent at the end of the
preceding quarter. The development reflected the 0.9 and 0.2
per cent decline in domestic credit (net) and other asset (net)
of the banking system, respectively, which more than offset
the 18.7 per cent increase in foreign assets (net) of the
banking system.
Narrow money supply (M1), at N10,064.25 billion, equally fell
by 1.2 per cent at end-September 2017, compared with 0.4
per cent decline at the end of preceding quarter. The fall in
M1, relative to the preceeding quarter, reflected the decline
of 2.8 per cent and 1.0 per cent in currency outside banks and
demand deposits of the banking system, respectively.
Over the level at end-December 2016, aggregate credit and
foreign assets (net) of the banking system increased by 0.5
and 10.0 per cent, respectively, while other assets (net)
declined by 21.5 per cent. Consequently, broad money
supply, M2 fell by 6.9 per cent, compared with the 6.8 per cent
decline at the end of the preceding quarter. Narrow money
supply (M1), also fell by 10.7 per cent, reflecting the respective
decline of 21.2 and 8.7 per cent in its currency and demand
deposit components.
Quasi-money, at N11,889.75 billion, rose by 0.8 per cent in the
review quarter, in contrast to the decline of 2.3 per cent in the
preceding
quarter.
The
development
relative
to
the
Key monetary
aggregates fell in
Q3 of 2017.


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

Economic Report Third Quarter

preceeding quarter was due to the fall in foreign currency
deposits in banks. Over the level at end-December 2016, quasi
money fell by 3.5 per cent, compared with the decline of 4.3
per cent at the end of the preceding quarter (Fig. 1, Table 1).
Figure 1: Growth Rate of Narrow Money (M1) and Broad Money (M2)2

Source: CBN
Aggregate credit (net) to the economy, which stood at
N26,985.31 billion, declined by 0.9 per cent at the end of the
review quarter, compared with the decline of 1.6 per cent at
end-June 2017. The development relative to the preceding
quarter, reflected the 5.5 per cent decline in claims on the
Federal Government, which more than offset the 0.2 per cent
increase in claims on the private sector. Over the level at endDecember 2016, aggregate credit (net) grew by 0.5 per cent,
due to the growth in both net claims on the Federal
Government and claims on the private sector.
Banking system‟s net claims on the Federal Government, at
the end of the third quarter of 2017 stood at N4,963.41 billion.
This indicated 5.5 per cent decline in the review quarter,
compared with the decline of 1.0 per cent at the end of
second quarter 2017. The development was attributed,

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

-15
-10
-5

-15
-10
-5

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q4-16
Q1-17
Q2-17
Q3-17
Quarterly (%)
Cumulative (%)
QM1 (RHS)
QM2 (RHS)
CM1 (LHS)
CM2 (LHS)
Banking system’s
credit to the Federal
Government fell in the
review


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

Economic Report Third Quarter

largely, to the increase in banks‟ holding of government
securities. Over the level at end-December 2016, claims on
the Federal Government rose by 1.8 per cent, reflecting
increase in outstanding government securities held by banks.
Banking system‟s credit to the private sector grew marginally
by 0.2 per cent, on quarter-on-quarter basis, to N22,021.89
billion, in contrast to 1.7 per cent decline in the preceding
quarter. The development was attributed to the 6.5 per cent
increase in claims on state and local governments, which
outweigh the decline in claims on the core private sector.
Over the level at end-December 2016, banking system‟s credit
to the private sector grew by 0.2 per cent, compared with
0.02 per cent growth at the end of the preceding quarter (Fig.
2, Table 1).
Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy3

Source: CBN
On quarter-on-quarter basis, foreign Asset (Net) of the banking
system grew by 18.7 per cent to N10,050.49 billion at endSeptember 2017, compared with the growth of 11.0 per cent
in the preceding quarter. The development was due to the
increase in foreign asset holdings of the CBN and banks. Over
the level at end-December 2016, foreign assets of the Banking
System (net) increased by 9.9 per cent in the third quarter of
2017, as against the decline of 7.5 per cent at the end of the
second quarter. The growth was due, wholly, to the increase

3 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

-20
-10

-20

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Quarterly (%)
Cumulative (%)
QCP (RHS)
QCG (RHS)
QAC (RHS)
CCP (LHS)
CCG (LHS)
CAC (LHS)
Foreign assets (net) of
the banking system
increased at the end
of the review quarter.


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

Economic Report Third Quarter

of 12.3 per cent in the foreign assets holdings of the CBN.
Other assets (net) of the banking system, on quarter-onquarter basis, fell by 9.9 per cent to negative N15,081.81 billion
at end-September 2017, compared with the fall of 5.6 per
cent at end-June 2017. The development reflected the fall in
other assets of the CBN and banks. Over the level at endDecember 2016, other assets (net) of the banking system fell
by 21.5 per cent, compared with the decline of 10.5 per cent
at the end of the preceding quarter.
Table 1: Growth in Monetary and Credit Aggregates (Per cent) Over
Preceding Quarter
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
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)

Source: CBN
2.2
Currency-in-circulation (CIC) and Deposits at CBN

At N1,781.05 billion, currency-in-circulation fell by 4.9 per cent,
below the level in the second quarter of 2017. The
development reflected the decline in both its currency
outside banks and demand deposit components.

Total deposits at the CBN amounted to N12,257.76 billion,
indicating 6.7 per cent increase over the level at the end of
the second quarter of 2017. The development was as a result
of the rise in the deposits of banks, Federal Government and
the private sector in the review quarter. Of the total deposits
at CBN, the shares of the Federal Government, Banks and
„‟Others‟‟ were N5,853.80 (48.0 per cent), N3,778.75 billion
(31.0 per cent) and N2,625.21 billion (21.0 per cent),
respectively.
Reserve money (RM) rose by 1.5 per cent to N5,559.79 billion
at end-September 2017, above the level at end-June 2017.
The development was as a result of the growth in banks‟
reserve at the CBN which more than offset the decline in
Reserve money (RM)
rose at the end of the
third quarter of 2017.


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

Economic Report Third Quarter

currency-in-circulation.
2.3
Money Market Developments
There was relative stabllity in the financial market during the
third quarter of 2017. Though withdrawals arising from CBN
foreign exchange interventions and Open Market Operations
(OMO) exerted pressure on liquidity, inflow from fiscal
injections and maturing CBN bills boosted liquidty in the
market. Accordingly, money market rates moved in tandem
with the trend of liquidity in the financial market.
Total value of money market assets outstanding at the end of
the third quarter of 2017 was N12,025.33 billion, showing an
increase of 3.0 per cent, in contrast to the decline of 0.6 per
cent at the end of the preceding quarter. The development
was attributed to the respective increase of 29.6, 6.0, and 2.0
per cent in Commercial Paper, FGN Bonds and Nigera
Treasury Bills outstanding in the review quarter.
2.3.1
Interest Rate Developments
Developments in banks‟ deposit and lending rates were mixed
in the third quarter of 2017. With the exception of the average
savings and term deposit as well as the 12 month and over 12
month deposit rates which fell by 0.05 per cent, 0.04 per cent,
0.98 per cent and 0.60 per cent, respectively, all other
deposits rates of various maturities rose from a range of 4.13 -
10.63 per cent at end-June 2017 to a range of 4.30-11.30 per
cent in the review quarter. At 4.08 and 8.79 per cent at endSeptember 2017, the average savings and term deposit rates
declined by 0.05 and 0.04 percentage point below the levels
at the end of the second quarter of 2017.
The average prime and maximum lending rates rose by 0.12
and 0.39 percentage point to 17.66 and 31.06 per cent,
respectively.
Consequently,
the
spread
between
the
weighted average term deposit and maximum lending rates
widened by 0.40 percentage point to 22.27 percentage points
at the end of the third quarter of 2017. Similarly, the margin
between the average savings and the maximum lending rates
widened by 0.37 percentage point to 26.76 percentage
points. With inflation at 15.98 per cent at end-September 2017,
all deposit rates were negative in real terms, while lending
rates were positive in real terms.
The financial market
was relatively stable
during the review
period .
Banks’ deposit rates
showed mixed
developments while
lending rates trended
upward in the third
quarter of 2017.


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

Economic Report Third Quarter

At the inter-bank funds segment, the weighted average interbank call rate, which stood at 33.11 per cent at end-June
2017, fell by 14.66 percentage points to 18.11 per cent in the
third quarter of 2017. The development reflected the relative
liquidity ease in the banking system in the review quarter vis-àvis the condition in the preceding quarter. The Nigeria interbank offered rate (NIBOR) for the 30-day tenor fell from 38.93
per cent in the preceding quarter to 22.15 per cent in the third
quarter of 2017. Similarly, the weighted average rate at the
Open-Buy-Back (OBB) segment fell by 14.91 percentage
points to 25.06 per cent (Fig. 3, Table 2).
Figure 3: Selected DMBs Interest Rates (Average)

Source: CBN
Table 2: Selected Interest Rates (Percent, Averages)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Average Term Deposits

Prime Lending

Interbank

Maximum Lending

Source: CBN
2.3.2
Commercial Paper (CP)
Commercial Paper (CP) outstanding held by banks rose by
29.6 per cent to N0.57 billion at the end of the third quarter of
2017, above N0.44 billion at end-June 2017. The development
was due to the rise in investment in CP by the merchant banks
during the review period. Thus, CP constituted 0.005 per cent
of the total value of money market assets outstanding,

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Percent per Annum
Percent per Annum
Prime
Interbank
Maximum
Average Term Deposits (RHS)

Interbank call rate
fell in 3 2017.


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

Economic Report Third Quarter

compared with 0.004 per cent at the end of the preceding
quarter.
2.3.3
Bankers’ Acceptances (BAs)
Bankers‟ Acceptances (BAs), which stood at N26.81 billion at
end-September 2017, was 34.7 per cent below the level in the
preceding quarter. The development reflected the decline in
investment in BAs by the banks during the review quarter.
Consequently, BAs accounted for 0.2 per cent of the total
value of money market assets outstanding, at the end of the
third quarter of 2017, compared with 0.4 per cent at the end
of the preceding quarter.

2.3.4 Open Market Operations
The Bank intervened through direct Open Market Operations
(OMO) auctions conducted from July 1 to September 26,
2017. The tenors to maturity of the instruments ranged from 79
to 364-day. Total amount offered was N3,733.54 billion, while
total subscription and allotment were N3,048.49 billion and
N2,924.71 billion, respectively. The bid rates ranged from 16.00
to 18.55 per cent, while the stop rates ranged from 17.20 to
18.55 per cent. Repayment of matured CBN bills was N1,754.37
billion, translating to a net withdrawal of N1,170.34 billion.
2.3.5
Primary Market
At the Government securities market, NTBs and long-term
(FGN Bonds) debt instruments were issued at the primary
market on behalf of the Debt Management Office (DMO).
NTBs of 91- 182- and 364-day tenors, amounting to N1,181.71
billion, N1,872.31 billion and N1,256.70 billion were offered,
subscribed to and allotted, respectively, in the third quarter of
2017.
2.3.6
Bonds Market
Tranches of the 5-, 10- and 20-year FGN Bonds were offered
for sale in the third quarter of 2017. The term to maturity of the
bonds ranged from 3 years 10 months to 19 years 9 months.
Total amount offered, subscribed to and allotted was N405.00
billion, N587.66 billion and N405.79 billion, respectively. There
was no allotment on non-competitive basis, while N120.00
billion FGN bond was repaid on maturity. The bid rate on all
tenors ranged from 15.00 to 17.50 per cent, while the marginal
rates for all the tenors ranged from 15.90 to 16.90 per cent.
The bid-to-cover ratio was 1.00, while the auction was
Subscription for FGN
Bonds of various
maturities were
reopened during the
third quarter of 2017.
banks’ holdings of
BAs decreased in Q3
of 2017.


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

Economic Report Third Quarter

oversubscribed by 19.00 per cent.
2.3.7
CBN Standing Facilities
The banks continued to access the Bank‟s Standing Facilities
window to square up their positions either by borrowing from
the standing lending facility (SLF) or depositing excess reserves
at the standing deposit facility (SDF) of the CBN at the end of
each business day. Activities at the CBN standing facility
window showed more patronage at the SLF window.
Applicable rates for the SLF and SDF stood at 16.00 per cent
and 9.00 per cent, respectively.
Total request for Standing Lending Facility (SLF) (including the
Intra-day lending facilities (ILF) converted to overnight repo)
amounted to N13,553.66 billion with interest earnings of N9.37
billion, compared with SLF of N14,554.94 billion and interest
earned of N11.23 billion in the preceding quarter.
Total standing deposit facility (SDF) granted during the review
quarter was N1,536.76 billion with a daily average of N30.74
billion, compared with N1,961.35 billion in the second quarter
of 2017. Interest payment on SDF in the review quarter was
N0.52 billion, compared with N0.78 billion at end-June 2017.
2.4
Deposit Money Banks’ Activities
The total assets and liabilities of the commercial banks stood
at N33,310.15 billion at end-september 2017 2017, representing
1.3 per cent increase over the level at end-June 2017. The
funds were sourced, mainly, from unclassified liabilities and
realisation of unclassified assets and claims on CBN. The funds
were used, mainly, for accretion of reserves, acquisition of
foreign assets and reduction of demand, time, savings and
foreign currency deposits.
At N21,590.55 billion, banks‟ credit to the domestic economy,
rose by 1.3 per cent, over the level at end-June 2017. The
development reflected, mainly, the rise in claims on the
private sector in the review quarter.
Total specified liquid assets of the banks stood at N7,245.92
billion, representing 39.8 per cent of the total current liabilities.
At that level, the liquidity ratio contracted by 1.0 percentage
point below the level at the end of the preceding quarter and
was 9.8 percentage points above the stipulated minimum
Liquidity and Loan-todeposit ratios were above
the prescribed minimum
and maximum, respectively,
in Q3 of 2017


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

Economic Report Third Quarter

ratio of 30.0 per cent. The loans-to-deposit ratio, at 82.77 per
cent, was 0.76 percentage points above the level at the end
of the preceding quarter and 2.77 percentage points above
the prescribed maximum of 80.0 per cent.
2.5
Capital Market Developments
2.5.1
Secondary Market
Developments in the major market indicators were mixed in
the third quarter of 2017. The aggregate volume of traded
securities fell by 17.2 per cent to 20.2 billion shares, while value
of traded securities rose by 51.7 per cent to N364.1 billion in
253,041 deals, compared with 24.4 billion shares and N240.0
billion in 266,373 deals, recorded in the second quarter of
2017. The Financial Services Industry (measured by volume) led
the activity chart with 19.6 billion shares valued at N148.3
billion, traded in 156,471 deals, compared with 19.6 billion
shares valued at N148.3 billion and traded in 156,471 deals in
the second quarter of 2017.
There were no Over-the-Counter (OTC) transactions in the
review month.
Figure 4: Volume and Value of Traded Securities

Source: NSE

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Value (N billion)
Volume (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)


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

Economic Report Third Quarter

Table 3: Traded Securities on the Nigerian Stock Exchange (NSE)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Volume (Billion)
23.26
18.4
34.9


Value (N Billion)

Source: NSE
2.5.2
New Issues Market/Supplementary Listings
There were five (5) supplementary equity listings in the review period.
Table 4: New and Supplementary Listing on the Nigerian Stock Exchange
S/N Company
Additional Shares (Units)
Reasons
Listing
1 Lafarge Africa Plc
9.78 Million Ordinary Shares
Exchange for AshakaCem SharSupplementary
2 Livestock feeds PLC
1.0 billion Ordinary Shares
Additional Shares
Supplementary
3 Livestock feeds PLC
1.0 billion Ordinary Shares
Additional Shares
Supplementary
4 Nig. Enamelware plc
12,672,000 units
Bonus Issue
Supplementary
5 UACN Property Development CO. Ltd
879,645,796 units
Right Issue
Supplementary
Source: NSE

2.5.3
Market Capitalisation
The aggregate market capitalisation for all listed securities
(Equities and Debts) rose by 3.2 per cent to N19.6 trillion at
end-September, 2017 compared with N19.0 trillion at the end
of the second quarter of 2017. Similarly, market capitalisation
for the equity segment rose by 6.1 per cent to N12.2 trillion and
constituted
62.2
per
cent
of
the
aggregate
market
capitalisation, compared with N11.5 trillion and 60.5 per cent
at end-June 2017.
2.5.4 NSE All-Share Index
The All-Share Index, which opened at 33,117.48, rose by 7.01
per cent to close at 35,439.98 in the thrid quarter of 2017.
Similarly, all the sectoral Indices finished lower during the
review quarter with the exception of NSE Premium, NSE
Banking, NSE Insurance, NSE Oil/Gas, NSE Lotus II and NSE
Pension indices which appreciated by 0.94 per cent, 1.17 per
cent, 0.61 per cent, 0.52 per cent, 0.03 per cent, and 0.24 per
cent, respectively, to close at 2,323.19, 440.17, 139.73, 280.83,
2,228.44 and 1,221.61.


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

Economic Report Third Quarter

Figure 5: Market Capitalisation and All-Share Index

Source: NSE
Table 5: Market Capitalization and All Share Index (NSE)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Market Capitalization (N trillion)

All-Share Index (Equities)
31,217.77

26,871.24

27,385.69

29,597.79

28,335.40

26,874.62

25,516.34

33,117.48

35,439.98

Source: NSE


14.5

15.5

16.5

17.5

18.5

19.5
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
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 Third Quarter

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

Economic Report Third Quarter

3.0
Fiscal Operations
Federally collected revenue in the third quarter of 2017 fell below
the provisional quarterly budget estimate by 16.7 per cent, but was
46.1 per cent higher than the receipts in the second quarter of 2017.
Federal Government provisional retained revenue for the review
quarter was N957.22 billion, while total provisional expenditure was
N1,358.98 billion, resulting in estimated deficit of N401.76 billion.

3.1
Federation Account Operations
Federally-collected revenue in the third quarter of 2017, at
N2,299.37 billion, was lower than the proportionate quarterly
budget estimate of N2,684.28 billion by 16.7 per cent. It,
however, exceeded the receipts in the preceding quarter by
46.1 per cent. The decline in federally-collected revenue
(gross) relative to the proportionate quarterly budget
estimate4 was attributed to the shortfall in receipts from both
oil and non-oil revenue during the review quarter (Fig. 6, Table
6).
Figure 6: Components of Gross Federally Collected Revenue

Table 6: Gross Federation Account Revenue (N Billion)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q2-17
Federally-collected revenue (Gross)
1,911.71

1,547.96

1,276.38

1,118.56

1,882.26

1,434.49

1,446.14

1,573.88

2,299.37

Oil Revenue
949.45

830.81

666.13

537.19

817.48

673.10

817.48

795.55

1,270.62

Non-Oil Revenue
962.25

717.15

610.25

581.37

1,064.78

761.39

628.66

778.33

1,028.75

Source:Federal Ministry of Finance


4 The proportionate quarterly budget estimate is the 2017 approved budget.

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Non-Oil Revenue
Oil Revenue Gross
Gross federally -
collected revenue
rose by 46.1 per
cent
above
the
level
in
the
second quarter of
2017.


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

Economic Report Third Quarter

Gross oil receipt at N1,270.62 billion or 55.3 per cent of the
total revenue, was lower than the proportionate quarterly
budget estimate by 6.2 per cent, but was above the receipts
in the preceding quarter by 59.7 per cent. The decline in oil
revenue relative to the proportionate quarterly budget
estimate was due to the shortfall in receipts from crude oil/gas
exports, owing to the decline in crude oil production, arising
from leakages and shut-ins/shut-downs at some NNPC
terminals, (Fig. 7, Table 7).

Figure 7: Gross Oil Revenue and Its Components

Table 7: Components of Gross Oil Revenue (N Billion)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Oil Revenue Gross
949.45

830.81

666.13

537.19

817.48

673.10

817.48

795.55

1,270.62

Crude oil/Gas Sales 196.29

212.86

82.43

112.54

115.95

78.63

101.33

111.84

345.53

PPT/Royalties
495.39

388.66

314.04

212.78

392.38

273.13

325.38

320.49

489.41

Others
257.78

229.28

269.66

211.86

309.15

321.34

390.78

363.22

435.69


Source: Federal Ministry of Finance
At N1,028.75 billion or 44.7 per cent of the total, non-oil
receipts (gross) fell below the proportionate quarterly budget
estimate of N1,335.41 billion by 29.8 per cent. It was, however,
above the level in the preceding quarter by 32.2 per cent.
The lower non-oil revenue relative to the proportionate
quarterly budget estimate was due to the shortfall in most
components of the non-oil revenue except Corporate tax,
customs and excise duties and customs special levies (nonFederation Account component) during the review period
(Fig. 8, Table 8).
-

1,000
1,200
1,400
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
N billion
Others
PPT/Royalties
Crude oil/Gas Sales


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

Economic Report Third Quarter

Figure 8: Gross Non-Oil Revenue and its Components

Table 8: Components of Gross Non-Oil Revenue (N Billion)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q2-17
Non-Oil Revenue
962.25

717.15

610.25

581.37

1,064.78

761.39

628.66

778.33

1,028.75

Value-Added Tax (VAT)
202.11

177.78

196.57

194.61

210.35

209.47

222.00

243.31

248.89

Companies Income Tax & Other Taxes
415.67

279.13

176.26

171.71

453.74

186.73

158.95

206.38

543.40

Customs & Excise Duties
138.83

141.67

135.51

106.54

150.15

156.62

144.17

150.67

164.15

Others/1
205.64

118.57

101.91

108.51

250.54

208.58

103.54

177.98

72.31

1/Includes FGN Independent Revenue, Education Tax, NITDF & Customs Federation/Non-Federation Account Levies
(Port, Sugar, ETLS, Steel, CISS & Cement Levies)
Source: Federal Ministry of finance

A net sum of N1,464.42 billion was retained in the Federation
Account from the gross federally-collected revenue after total
statutory deductions of N523.70 billion and transfers of N311.25
billion. Of the N1,464.42 billion, the Federal Government
received
N716.95
billion,
while
the
State
and
Local
Governments
got
N363.65
billion
and
N280.36
billion,
respectively. The balance of N103.46 billion was allocated to
the 13.0% Derivation Fund for distribution among the oilproducing states.
In addition, the Federal Government received N35.84 billion,
while the State and Local Governments received N119.47
billion and N83.63 billion, respectively, from the VAT Pool
Account.
-

1,000
1,200
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
N billion
Others
Customs & Excise Duties
Companies Income Tax & Other Taxes
Value-Added Tax (VAT)
The sum of N1,464.42
billion
of
the
gross
federally
collected
revenue was distributed
among 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 Third Quarter

Table 9 : Summary of Federally-Collected Revenue Deductions and Transfers (Naira Billion)
Q1 2017
Quarterly
B udget
Q2 2017
Q3 2017
T o tal D eductio ns 1/
393.37

128.07

318.36

523.70

Oil Revenue Deductions
361.22

76.25

270.38

474.76

Non-Oil Revenue Deductions
32.16

51.82

47.98

48.94

T o tal T ransfers
372.46

699.74

359.23

311.25

Federal Govt. Ind. Revenue
77.71

201.89

72.33

19.29

VAT Pool Account
213.12

432.00

233.58

238.93

Others 2/
81.62

65.85

53.32

53.02

1/ R ef er t o Table 1 f or breakdown of deduct ions
2 / Includes Federat ion and N on- Federat ion Special Levies, Educat ion Tax & N ITD EF
Source: Office of the Accountant General of the Federation (OAGF) and Federal Ministry of Finance
Thus, the total statutory and VAT revenue allocation to the
three tiers of government in the third quarter of 2017
amounted
to
N1,703.35
billion,
compared
with
the
proportionate quarterly budget estimate of N2,350.72 billion
and the sum of N1,296.85 billion received in the preceding
quarter.
3.2
The Fiscal Operations of the Three Tiers of
Government
3.2.1
The Federal Government

Provisional data on Federal Government finances indicated
that the Federal Government retained revenue for the third
quarter of 2017 amounted to N957.22 billion. This was below
the proportionate quarterly budget estimate by 40.9 per cent.
It was, however, above the receipts in the preceding quarter
by 42.0 per cent. Of the total revenue, Federation Account
accounted for 74.9 per cent, while Federal Government
Independent Revenue,VAT and Others accounted for 1.7, 3.7
and 19.6 per cent, respectively (Fig. 9).
At N957.22 billion, the
estimated
FGN
retained revenue was
lower
than
the
proportionate
quarterly budget
estimate by 29.0 per
cent.


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

Economic Report Third Quarter

Figure 9: Federal Government Retained Revenue


The estimated Federal Government expenditure for the third
quarter of 2017 was N1,358.98 billion, and below the
proportionate quarterly budget estimate of N1,937.98 billion
by 42.6 per cent. It was, however, above the level in the
preceeding quarter by 48.5 per cent. The decline relative to
the proportionate quarterly budget estimate was attributed,
mainly, to the decline in recurrent and absence of capital
expenditures in the period. A breakdown of the total
expenditure
showed
that
the
recurrent
component
accounted for 89.4 per cent, while the remaining 10.6 per
cent went to statutory transfers. A further breakdown of the
recurrent expenditure showed that the non-debt component
accounted for 51.3 per cent, while debt service payments
was 48.7 per cent.
Thus, the fiscal operations of the Federal Government resulted
in an estimated deficit of N401.76 billion, compared with the
the proportionate quarterly budget deficit of N589.19 billion.
Federation
Account
75.0%
VAT Pool
Account
3.7%
FGN
Independent
Revenue
1.7%
Others
19.6%
Fiscal
operations
of the FG resulted
in an estimated
deficit of N401.76
billion in Q3 2017.


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

Economic Report Third Quarter

Figure 10: Federal Government Expenditure

Source: Fiscal Liquidity Assessment Committee (FLAC) & the Office of the Accountant General of the Federation

Table 10: Federal Government Fiscal Operations (N Billion)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Retained Revenue
1,044.92

802.63

587.92

722.37

1,000.03

977.38

552.29

674.07

957.22

Expenditure
1,176.17

1,538.46

1,140.24

1,381.51

1,301.02

1,658.21

924.67

914.91

1,358.98

Current Surplus(+)/Deficit(-)
31.20

(136.57)

(365.84)

(213.76)

(158.60)

(178.42)

(289.83)

(107.90)

(257.20)

Primary Surplus(+)/Deficit(-)
159.82

(522.58)

(187.51)

(414.43)

205.90

(412.31)

(119.88)

8.92

190.07

Overall Balance: Surplus(+)/Deficit(-)
(131.25)

(735.83)

(552.32)

(659.14)

(300.99)

(680.83)

(372.38)

(240.84)

(401.76)

Source: Fiscal Liquidity Assessment Committee (FLAC) & the Office of the Accountant General of the Federation


3.2.2
Statutory Allocations to State Governments

Total allocation to state governments from the Federation
Account including the 13.0% Derivation Fund and the VAT
Pool Account, was N586.58 billion in the review quarter. This
was lower than the proportionate quarterly budget estimate
by 30.9 per cent. A breakdown showed that the receipts from
the Federation Account was N467.11 billion (79.6 per cent),
while the share of VAT pool account stood at N119.47 billion
(20.4 per cent). The receipts from both the Federation and
VAT Pool Accounts fell below the proportionate budget
estimate by 26.2 and 44.7 per cent, respectively.
3.2.3
Statutory Allocations to Local Government Councils
Total allocations to local governments from the Federation
and VAT Pool Accounts in the review quarter was N363.98
billion. This was below the proportionate quarterly budget
estimate by 40.9 per cent. Of the total amount, allocation
from the Federation Account was N280.36 billion (77.0 per
cent), while the VAT Pool Account stood at N83.63 billion (23.0
per cent).
Recurrent,
89.4%

Transfers,
10.6%


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

Economic Report Third Quarter

4.0
Domestic Economic Conditions
There was improvement in agriculturl activities during the review
quarter due to favourable weather conditions across the country.
Harvest of maize, yam, rice and cassava dominated in the Southern
States, while farmers in the Central and Northern States were mainly
involved in the harvest of potatoes, maize and groundnut. In the
livestock sub-sector, farmers engaged in the breeding of poultry and
migration of cattle from the Northern States to other regions in
search of green pastures.
4.1
Agricultural Sector
Analysis of the standardised precipitation index (SPI) indicated
that weather condition in the third quarter of 2017 was
favourable for farming. There was widespread rainfall, though
with cases of flood in some parts of the country. In addition,
the Federal Government continued to implement policies
and programmes to improve agricultural production for
increased export. The Nigeria Incentive Based Risk Sharing
System for Agricultural Lending (NIRSAL) also signed a
partnership
agreement
with
two
leading
Moroccan
agricultural
insurance
companies
-
„Mutuelle
Agricole
Marocaine D‟Assurances (MAMDA) and MAMDA Reassurance
to broaden the range and coverage of agricultural insurance
products in Nigeria.
Few cases of insurgency activities in Northern Borno, however,
negatively impacted agricultural activities, functioning of
markets and people‟s livelihood generally. Nevertheless, there
was general improvement in agricultural activities in the
review quarter. Farmers in the South were mainly involved in
harvest of yam, maize, rice and cassava, while harvest of
potatoes, maize and groundnuts dominated in the Central
and Northern States. In the livestock sub-sector, farmers
engaged in the breeding of poultry and migration of cattle
from the Northern states to other regions in search of green
pastures.
4.2
Agricultural Credit Guarantee Scheme
A total of N1,396.2 million was guaranteed to 10,009 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the third quarter OF 2017. This represented a decline of 4.4 per
cent and 37.9 per cent below the levels in the preceding
quarter and the corresponding period of 2016, respectively.


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

Economic Report Third Quarter

Sub-sectoral analysis showed that food crops obtained the
largest share of N856.3 million (61.3 per cent) guaranteed to
7,256 beneficiaries. Livestock got N159.6 million (11.4 per cent)
guaranteed to 660 beneficiaries and cash crops had N122.3
million (8.8 per cent) guaranteed to 724 beneficiaries, while
mixed crop received N91.8 million (6.6 per cent) guaranteed
to 963 beneficiaries. The Fishery sub-sector received N83.6
million (6.0 per cent) guaranteed to 287 beneficiaries, while
„Others‟ received a total of N21.7 million (1.6 per cent)
guaranteed to 119 beneficiaries.
Analysis by state showed that 33 states and the Federal
Capital Territory benefited from the Scheme in the review
period, with the highest and lowest sums of N124.9 million (9.4
per cent) and N0.3 million (0.02 per cent) guaranteed to Oyo
and Bayelsa States, respectively.
4.3 Commercial Agricultural Credit Scheme (CACS)
The Bank approved the Paddy Aggregate Scheme (PAS) as a
special window under the CACS in the third quarter of 2017.
The Scheme is a working capital facility for integrated rice
millers at 9.0 per cent interest rate and 6 months tenor. To
further facilitate access by prospective beneficiaries, the
single obligor limit under the CACS was also waived for
beneficiaries under the Scheme.
At end-September 2017, total amount released by the CBN
under the Commercial Agriculture Credit Scheme (CACS)
from inception to the participating banks for disbursement
stood at N501.70 billion for 526 projects (Table 10).


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

Economic Report Third Quarter

Source: CBN

4.4
Industrial Production
There was improvement in industrial sector activities in the third
quarter of 2017. The development was attributed to sustained
increased supply of foreign exchange and appreciation of
naira which facilitated importation of raw materials and
intermediate input as well as continued easing in inflationary
pressures. The development stimulated new orders, and
increased output and employment.
Consequently, at 106.8 (2010=100) in the review quarter, the
estimated index of industrial production increased by 2.5 per
cent over the level in the preceding quarter. The increase was
attributed to improved activities in all sub-sectors during the
period.


Industrial activities
rose in the review
quarter due to
increased activities in
all sub-sectors.
Table 11: Disbursement of Credit Under the Commercial Agriculture Credit Scheme (CACS)
S/N
Participating Banks
Amt Disbursed (N billion)
Number of Projects/State Governments

Access Bank Plc
36.66

Citibank Plc
3.00

Diamond Baqnk Plc
4.85

ECOBANK
6.38

FCMB Plc.
11.43

Fidelity Bank Plc
16.32

First Bank of Nigeria Plc
47.89

GTBank Plc
31.70

Heritage Bank Plc
6.82

Keystone Bank
4.05

Jaiz Bank Plc
0.00

Skye Bank Plc
13.77

Stanbic IBTC Bank
25.41

Sterling Bank Plc
63.68

Union Bank Nigeria PLC
26.24

United Bank for Africa (UBA) Plc
65.55

Unity Bank Plc
24.33

Wema Bank
2.12

Zenith Bank
109.66

Suntrust Bank Ltd
1.85

TOTAL
501.70

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

Economic Report Third Quarter

The estimated index of manufacturing production in the third
quarter of 2017, at 179.0 (2010=100), showed 2.5 and 2.7 per
cent increase above the levels in the preceding quarter and
the corresponding period of 2016, respectively. The capacity
utilisation was estimated at 54.0 per cent showing an increase
of 1.8 percentage points over the level in the preceding
quarter. The improvement was due to increased consumer
demand and moderation in input prices (Fig.11).
Figure11: Manufacturing Capacity Utilization Rate

Source: Staff Estimate

The index of mining production in the third quarter of 2017 at
83.05 (1990=100), rose by 10.0 per cent and 10.7 per cent,
above the levels in the preceding quarter and the
corresponding period of 2016, respectively. The development
was attributed to increased crude oil and gas production.
Estimated average electricity generation in the third quarter
of 2017 rose by 5.6 per cent to 3,875.3 MW/h, over the 3,556
MW/h attained in the preceding quarter. The increase was
attributed to the improved gas supply to thermal stations and
rising level of water in the hydro stations.
At 2,853.9 MW/h, average estimated electricity consumed fell
marginally by 0.9 per cent, below the level in the preceding
quarter. The decline was attributed to the rejection of 1000
mw per day by Discos and power losses on account of

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Percent
Industrial capacity
utilisation stood at
54.0 percentage points
in the review quarter.
Average electricity
generation and
consumption rose
during the review
quarter.


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

Economic Report Third Quarter

inefficient transmission and distribution facilities (Figure 12,
Table 11).
Figure 12: Index of Industrial Production (2010=100) 5

Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17
Index
Mining
All Sectors
Manufacturing

Source: Staff Estimate


Table 12: Index of Industrial Production and Manufacturing Capacity Utilisation Rate
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
All Sectors (1990=100)

Manufacturing


Mining
83.1
94.5


Capacity Utilisation (%)


Source: Saff Estimate
4.5
Petroleum Sector
Nigeria‟s crude oil production, including condensates and
natural gas liquids, averaged 1.83 mbd or 168.36 million barrels
(mb) in the review quarter. This represented an increase of
0.17 mbd or 10.2 per cent, compared with 1.66 mbd or 151.06
mb recorded in the preceeding quarter. The development
was due to sustained peace in the oil production region.


5 Index measurement (2010=100) from first quarter 2015
Crude oil and natural
gas production
increased in the third
quarter of 2017.


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

Economic Report Third Quarter

Crude oil export stood at 1.38 mbd or 126.96 mb, representing
14.0 per cent increase over 1.21 mbd or 110.11 mb in the
preceding quarter. The development was due, mainly, to
reduced activities of vandals in the Niger Delta region.
Allocation of crude oil for domestic consumption was
maintained at 0.45 mbd or 41.40 million barrels in the review
quarter.
The average spot price of Nigeria‟s reference crude oil, the
Bonny Light (37° API) rose from US$50.21 per barrel in the
second quarter of 2017 to US$52.92 per barrel in the review
quarter. This represented an increase of 5.4 per cent. The UK
Brent at US$52.51/b, the WTI at US$47.39, and the Forcados at
US$53.09/b exhibited similar trends as the Bonny Light.
The average price of OPEC basket of fourteen selected crude
streams was US$49.97/b in the third quarter of 2017. This
represented an increase of 3.1 per cent and 16.5 per cent
relative to the average of US$48.47/b and US$42.90/b in the
preceding quarter and the corresponding quarter of 2016,
respectively (Figure 13, Table 12).
Figure13: Trends in Crude Oil Prices

Source: Reuters

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
US$ per barrel
Bonny Light
OPEC Basket
Crude oil export
increased in Q3
2017.
Average crude oil
prices, including
Nigeria’s Bonny Light
(37o API) rose in the
international crude oil
market in Q3 2017.


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

Economic Report Third Quarter

Table 13: Average Crude Oil Prices in the International Oil Market
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Bonny Light

OPEC Basket


Source: Reuters

4.6
Consumer Prices6
The all-items composite Consumer Price Index (CPI), at endSeptember 2017, was 241.2 (November 2009=100), indicating
2.99 per cent and 15.98 per cent increase above the levels in
the preceding quarter and the corresponding quarter of 2016,
respectively. The development was attributed to price
increase across all Classification of Individual Consumption by
Purpose (COICOP) functions and all-item levels. It was,
however, the eighth consecutive decline in the year-on-year
headline inflation since January 2017.
The urban all-items CPI at the end of the third quarter of 2017
was 243.5 (November 2009=100), indicating an increase of 3.1
per cent and 16.2 per cent, respectively, compared with the
levels in the preceding quarter and the corresponding period
of 2016. Similarly, the rural all-items CPI, at 239.4 (November
2009=100), represented increase of 2.9 per cent and 15.8 per
cent, respectively, compared with the levels in the preceding
quarter and the corresponding period of 2016 (Figure 14,
Table 13).
The composite food index (with a weight of 50.7 per cent in
the CPI basket) was 255.1 per cent, representing an increase
of 3.6 per cent, over 246.3 per cent at the end of the
preceding quarter. The rise in the index was driven, largely, by
the increase in the prices of potatoes, yams and other tubers,
milk cheese and eggs, bread and cereals, coffee tea and
cocoa, soft drinks, fish, meat and oil and fats.


6 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
increased in Q3 2017
over 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 Third Quarter

Figure 14: Consumer Price Index

Source: NBS
Table 14: Consumer Price Index (November 2009=100)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Composite


Urban

Rural


Inflationary pressures maintained a declining trend in the third
quarter of 2017, due mainly to easing non-food prices,
favourable base effects over 2016 prices and reduced
exchange rate pass-through on domestic prices. This followed
sustained intervention by the CBN in the foreign exchange
market, which stabilised the exchange rate. Consequently,
headline inflation declined to 15.98 per cent from the 16.10
and 17.85 per cent in the preceding and the corresponding
quarters of 2016, respectively. The pace of inflation was driven
by contributions of solid fuels, bread and cereals, meat, liquid
fuels, clothing and its accessories, and fish.
On a twelve-month moving average basis, inflation fell to 17.2
per cent in the third quarter of 2017, compared with 17.6 and
13.5 per cent in the preceding quarter and the corresponding
period of 2016, respectively (Figure 15, Table 14).

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Index
Composite
Urban
Rural
The headline
inflation (y-o-y)
stood at 15.98 per
cent in Q3 2017.


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

Economic Report Third Quarter

Figure 15: Inflation Rate

Source: NBS
Table 15: Headline Inflation Rate (%)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
12-Month Moving Average

Year-on-Year

Source: NBS


Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Percent
12-Month Average
Year-on-Year


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

Economic Report Third Quarter

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

Economic Report Third Quarter

5.0
External Sector Developments7
Foreign exchange inflow and outflow through the CBN in the third
quarter of 2017 rose by 28.1 per cent and 3.3 per cent, respectively,
over the levels in the preceding quarter. Total non-oil export receipts
declined by 51.4 per cent, relative to the level in the second quarter
of 2017. The average exchange rate at the inter-bank segment was
N305.81/US$, compared with N305.76/US$ at the end of the second
quarter of 2017. At US$33.16 billion, the gross external reserves rose
by 9.2 per cent, above the level at end-June 2017.
5.1
Foreign Exchange Flows
Low shale oil production in the US due to the damaging
impacts of Hurricane Harvey and the decision of Organisation
of Petroleum Exporting Countries (OPEC) to sustain the
extension of crude oil supply cut led to increase in the price of
crude oil at the international market. In addition, reduction in
crude oil bunkering and pipeline vandalism in the oil
producing regions of Nigeria resulted in increased domestic
production. The development positively impacted crude oil
sales and revenue in the review period. Consequently, foreign
exchange inflow through the CBN in the third quarter of 2017,
at US$11.98 billion, indicated 28.1 and 113.3 per cent increase
over
the
levels
in
the
preceding
quarter
and
the
corresponding period of 2016, respectively. This reflected
increase in oil and non-oil reciepts in the reviewed quarter.
Aggregate outflow through the CBN, at US$9.34 billion,
increased by 3.3 per cent and 17.9 per cent above the levels
in the preceding quarter and the corresponding period of
2016, respectively. The increase relative to the preceding
quarter reflected the rise in payments for external debt
service, third party MDA Transfers, other official payments,
foreign exchange special payments and drawings on letters
of credit. Of the total outflow through the CBN, disbursement
for inter-bank utilisation accounted for 69.4 per cent, while the
balance was accounted for by other payments. Overall, a net
inflow of US$2.64 billion was recorded in the review quarter,
compared with US$0.31 billion in the preceding quarter (Figure
16, Table 15).

7 Data on foreign exchange flows through the CBN and the Economy are provisional and subject
to change
Foreign exchange inflow
and outflow through the
CBN rose by 28.1 and
3.3 per cent,
respectively, and
resulted in a net inflow
of US$2.64 billion in Q3
of 2017.


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

Economic Report Third Quarter

Figure 16: Foreign Exchange Flows Through the CBN


Source: CBN
Table 16: Foreign Exchange Flows Through the CBN (US$ million)
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Inflow
7,135.41

3,942.89

5,875.18

5,613.01

6,726.01

6,597.73

8,404.37

11,984.05

Outflow
7,757.49

4,487.05

6,023.10

7,912.02

4,649.85

3,646.89

7,725.49

9,343.06

Netflow
(622.08)

(544.16)

(147.92)

(2,299.01)

2,076.16

2,950.84

678.88

2,640.99


Source: CBN

Aggregate foreign exchange inflow into the economy was
US$26.95 billion in the third quarter of 2017. This represented
35.7 per cent and 57.9 per cent increase over the levels in the
preceding quarter and the corresponding quarter of 2016,
respectively. The development reflected the respective rise of
42.4 per cent and 28.1 per cent in inflow through autonomous
sources and the Bank, respectively, in the review period. Oil
sector receipts, which accounted for 11.8 per cent of the
total, stood at US$3.17 billion, compared with US$2.10 billion
and US$3.60 billion in the second quarter of 2017 and the
corresponding period of 2016, respectively.
Non-oil public sector inflow, at US$8.81 billion (32.7 per cent of
the total), rose by 21.3 per cent and 336.1 per cent, above the
levels at the end of the second quarter of 2017 and the
corresponding period of 2016, respectively. Autonomous
inflow, at US$15.0 billion, rose by 42.9 per cent and 30.4 per
cent, above the levels in the preceding quarter and the
corresponding period of 2016, respectively. Inflow through
autonomous sources accounted for 55.7 per cent of the total.
-4,000
-2,000


Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
US$ million
Inflow
Outflow
Netflow
Autonomous inflow
into the economy rose
by 21.3 per cent in Q2
2017 .


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

Economic Report Third Quarter

At US$10.17 billion, aggregate foreign exchange outflow from
the economy rose by 7.1 per cent and 19.3 per cent above
the levels in the preceding quarter and the corresponding
period of 2016, respectively. The development was driven,
largely, by outflow through the CBN. Thus, foreign exchange
flows through the economy resulted in a net inflow of US$16.78
billion in the review quarter, compared with US$10.37 billion
and US$8.55 billion in the second quarter of 2017 and the
corresponding period of 2016, respectively.
5.2
Non-Oil Export Earnings by Exporters
Total non-oil export earnings recieved through the banks
declined significantly by 51.4 per cent below the level in the
second quarter of 2017 to US$505.9 million in the review
quarter. The development was due to the 86.9, 42.1 and 20.3
per cent fall in foreign exchange receipts from manufactured
products,
minerals
and
food
products
sub-secrors.
A
breakdown by sectors showed that proceeds from agricultural
products, minerals, manufactured products, industrial sector
and food products stood at US$216.1 million, US$97.6 million,
US$89.6
million,
US$83.7
million
and
US$18.9
million,
respectively. The transport sector recorded US$20,440.00 in
earnings during the review period.
The percentage shares of agricultural products, minerals,
manufactured products, industrial sector and food products in
the total non-oil export proceeds were 42.7, 19.3, 17.7, 16.6
and 3.7 per cent, respectively.
5.3
Sectoral Utilisation of Foreign Exchange

The invisible sector accounted for the bulk (48.0 per cent) of
total foreign exchange disbursed in the third quarter of 2017,
followed by the industrial sector (23.3 per cent). The
contributions of other sectors in a descending order were
minerals and oil sector (13.2 per cent), manufactured
products (8.1 per cent), food products (5.5 per cent),
transport sector (1.1 per cent) and agricultural products (0.8
per cent) (Fig.17).
.
The invisible sector
accounted for the
bulk of the total
foreign exchange
disbursed during Q3
2017.
Total non-oil export
earnings by exporters
declined during the
third quarter of 2017.


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

Economic Report Third Quarter

Figure17: Sectoral Utilisation of Foreign Exchange

Source: CBN

5.4
Foreign Exchange Market Developments8
A total of US$6.49 billion was sold by the CBN to authorised
dealers in the third quarter of 2017. This represented 15.1 per
cent decline below the level in the second quarter of 2017.
The development relative to the preceding quarter was as a
result of the reduction in inter-bank sales. Of the total, foreign
exchange forwards disbursed at maturity amounted to
US$3.31 billion or 51.0 per cent of the total. Interbank and BDC
sales were US$0.69 billion (10.6 per cent) and US$1.77 billion
(27.3 per cent), respectively, while Swap transactions was
US$0.72 billion or 11.1 per cent of the total (Figure 18, Table
16).


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


Percent of Total
Q4-16
Q2-17
Q3-17
Supply for foreign
exchange by authorized
dealers fell during Q3
2017.


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

Economic Report Third Quarter

Figure 18: Supply of Foreign Exchange


Source: CBN


Table 17: Demand for and Supply of Foreign Exchange (US$ billion)
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Forex Sales at rDAS/Interbank

Supply of Swaps

Supply of Forex to BDC

Total Forex Supply(BDC and rDAS)


Source: CBN

Sutained interventions in the foreign exchange market and
increased patronage at the Investors and Exporters window
led to relative stability and marginal appreciation of the naira
to dollar exchange rate at the I&E and BDC segments. The
average exchange rate at the inter-bank segment was
N305.81/US$, compared with N305.76/US$ at the end of the
second quarter of 2017. This reflected depreciation of 0.01
and 0.9 per cent relative to the rates in the preceding quarter
and the corresponding period of 2016, respectively.
At the BDC segment, the average exchange rate of the naira
to dollar, at N365.56/US$, indicated 3.7 and 8.7 per cent
appreciation relative to the rates in the preceding quarter
and
the
corresponding
period
of
2016,
respectively.
Consequently,
the
premium
between
the
average
interbank/BDC rates narrowed by 0.4 percentage point to
19.2 per cent in third quarter 2017 (Figure 19, Table 17).

Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
US$ billion
Forex Sales at rDAS/Interbank
Supply of Swaps
Supply of Forex to BDC
Total Forex Supply
The average naira
exchange rate vis-à-vis
the US dollar was
N305.81/US$ at the
inter-bank segment in
Q3 2017.


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

Economic Report Third Quarter

Figure 19: Average Exchange Rate Movements

Source: CBN

Table 18: Exchange Rate Movements and Exchange Rate Premium
Average Exchange Rate (N/US$)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
rDAS
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
BDC

Interbank

Premium (%)
rDAS/BDC
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
rDAS/Interbank
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
BDC/Interbank


Source: CBN


Figure 20: Exchange Rate Premium

Source: CBN

Q2-15
Q3-15
Q4-15
Q1-16
Q2-16
Q4-16
Q1-17
Q2-17
Q3-17
N/US $
Average BDC
Average Interbank

Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q2-17
Per cent
Interbank/BDC
Interbank/BDC


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

Economic Report Third Quarter

5.5
Gross Official External Reserves
Gross external reserves at the end of the third quarter of 2017
was US$33.16 billion. This indicated an increase of 9.3 per cent
above the level in the second quarter of 2017. The increase
relative to the preceding quarter reflected, mainly, the inflow
from the FGN Eurobond proceeds and other official proceeds.
A breakdown of the official external reserves showed that
CBN reserves stood at US$23.59 billion (71.1 per cent),
Federation reserves, US$2.38 billion (7.2 per cent) and the
Federal Government reserves, US$7.19 billion (21.7 per cent)
(Figure 21, Table 18).

Figure 21: Gross Official External Reserves


Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
US$ million

Table 19: Gross Official External Reserves (US$ million)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
External Reserves
29,880.2

28,284.8

27,336.4

26,505.4

23,806.5

26,986.2

29,994.4

30,344.0

33,159.0


Gross external
reserves rose during
the third quarter of
2017.


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

Economic Report Third Quarter

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

Economic Report Third Quarter

6.0 Global Economic Conditions
6.1 Global Output
Dynamic global trade and improved labour markets, coupled with
fiscal stimulus and accommodative monetary policies in the major
economies kept the global economy on the growth trajectory in
the third quarter of 2017. Global purchasing manager indices and
other high-frequency indicators for July and August 2017
suggested that growth momentum continued into the third
quarter of 2017, with the global economy estimated to expand by
3.1 per cent.

Growth in the US economy was driven, largely, by strong consumer
spending on durable goods. The euro area economy expanded
at the fastest pace in over six years on the back of robust
domestic demand. However, in the UK, uncertainty about
implicaions of Brexit, together with eroded wages due to higher
inflation, led to a slowdown in the economy. Japan‟s domestic
economy propelled growth to a two-year high of 2.0 perc ent in
the second quarter of 2017. Among the key emerging market
economies, China‟s economy continued to show strong resilience
with growth remaining at its strongest level since the third quarter
of 2015, as industrial output and retail sales picked up, while fixedasset investment remained strong.

6.2 Global Inflation
Developments in global inflation were generally mixed in the
third quarter of 2017. Rising energy and food prices led to
increased inflation in most of the advanced economies. In the
US and UK, inflation rose to 1.93 and 2.83 per cent,
respectively. Although inflation remained below the 2.0 per
cent target in the euro area, it, however, icreased to 1.4 per
cent in the third quarter, compared with 1.3 per cent in the
preceding quarter.
In the major emerging markets, moderate energy prices along
with stable economic conditions and stability in the foreign
exchange markets exerted downward pressure on inflation.
Inflation in Brazil, Russia, China and India declined to 3.8, 4.1,
1.4 and 2.6 per cent, respectively, in the third quarter of 2017.
Similarly, inflation in developing economies generally trended
downward due, largely, to stable foreign exchange markets.


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

Economic Report Third Quarter

6.3 Global Commodity Demand and Prices
Global crude oil supply in the review quarter was estimated at
96.4 mbd, representing an increase of 0.6 per cent above the
level in the preceding quarter. Similarly, global crude oil
demand was estimated at 97.50 mbd, indicating a 1.35 per
cent increase above the level in the preceding quarter.
The average price of OPEC Reference Basket (ORB) of 14
selected crude streams was US$49.97 in the third quarter of
2017 and represented an increase of 3.1 per cent over the
level in the preceding quarter. The development was
attributed, mainly, to the sustained compliance by OPEC and
Non-OPEC members with the crude oil supply cut for market
rebalancing and the slowdown in US shale oil production.
6.4

International Financial Markets
Developments in the international stock markets were
generally positive in the review period. In North America,
major market indices showed improvement. The United States
S&P 500, Canadian S&P/TSX Composite and the Mexican
Bolsa indices rose by 4.0 per cent, 3.0 per cent and 1.0 per
cent, respectively. Similarly, in Europe, the FTSE 100, CAC 40,
DAX and MICEX indices rose by 0.8 per cent, 4.1 per cent, 4.1
per cent and 10.5 per cent, respectively, in the review quarter.
In South America, the Brazilian Bovespa, Argentine Merval and
Colombian COLCAP indices rose by 21.6, 23.2 and 1.7 per
cent, respectively. In Africa, the Egypt EGX CASE 30, Ghana
GSE ASI indices, Kenya Nairobi NSE 20, Nigeria NSE All-Share
and South Africa JSE All-Share indices increased by 4.3 per
cent, 18.4 per cent, 4.0 per cent, 7.0 per cent and 7.7 per
cent, respectively.
In the third quarter of 2017, develoments in the international
foreign exchange market were mixed. Most of the currencies
reviewed appreciated against the U.S. dollar, while a few
depreciated. This reflected the decline in financial markets
expectations of a hike in the Federal Funds rate and
anticipated monetary policy tightening by most central banks
including the Bank of Canada. A summary of developments in
the foreign exchange market in the review quarter are as
follows:


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

Economic Report Third Quarter

Africa: The Nigerian naira, Kenyan Shilling and Egyptian
pound appreciated against the U.S. dollar by 0.05, 0.58
and 2.78 per cent, respectively, while the South African
rand depreciated against the U.S. dollar by 3.90 per
cent.
The
Ghanaian
cedi,
however,
remained
unchange against the U.S. dollar.

North America: Against the US dollar, the Mexican
peso depreciated by 0.71 per cent, while the
Canadian dollar appreciated by 4.84 per cent in the
review.

South America: The Brazilian real and Colombian peso
appreciated against the U.S. dollar by 4.75 and 3.59 per
cent,
respectively,
while
the
Argentine
peso
depreciated against the U.S. dollar by 3.98 per cent.

Europe: The British pound, Euro and Russian ruble
appreciated against the U.S. dollar by 2.67, 4.76 and
2.42 per cent, respectively during the review period.

Asia: The Japanese yen and Indian rupee depreciated
against the U.S. dollar by 0.11, and 1.07 per cent,
respectively, while the Chinese yuan appreciated
against the U.S. dollar by 1.95 per cent
6.5 Other International Economic Developments
and Meetings
Other major international economic developments and
meetings of importance to the domestic economy during the
third quarter of 2017 included meeting of the African Caucus
comprising African Governors of the International Monetary
Fund and the World Bank Group held in Gaborone, Botswana
from August 2 – 4, 2017 with the theme “Economic
Transformation and Job Creation: A Focus on Agriculture”. The
meeting reviewed the significance of agriculture in Africa and
the challenges confronting the continent‟s quest to achieve
food sufficiency.The following suggesstions were made at the
meeting to promote growth potential and competitiveness in
agriculture:

Provision/availability of new technology to facilitate
development of higher yielding and more resilient food
crops that deliver bountiful harvests;


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

Economic Report Third Quarter

Enhancement of electricity supply, irrigation, and improved
infrastructure to link farmers to lucrative regional food
markets;


Need for sound policies that do not discriminate against
the agricultural sector and will attract financing for the
agricultural sector;


Skills
training
to
position
the
youth
for
Africa‟s
transformation. Improving access to land and other
productive assets, especially for poor women, would be
pivotal
to
the
development
of
agriculture
and
improvement of household welfare;


Climate-smart agriculture, built on increasing productivity
and incomes, enhancing resilience of livelihoods and
ecosystems and reducing/removing greenhouse gas
emissions from the atmosphere is a pathway towards
development and food security; and


Central banks should play a crucial role in creating the
enabling
environment
for
financial
access
while
safeguarding financial stability. Governments have a
responsibility
to
adopt
laws
and
regulations
that
encourage both financial sector development and
inclusion.

Furthermore, the 40th Ordinary meeting of the Assembly of
Governors of the Association of African Central Banks (AACB)
was hosted by the South Africa Reserve Bank (SARB) at the
SARB Head Office in Pretoria, South Africa on August 16, 2017.
The Meeting was preceded by the Technical Committee and
Bureau Meetings and the Governors‟ Symposium held from
August12-15, 2017. Highlights of the Meeting included:

Adoption of the reports of the 39th Ordinary Meeting of
the AACB Assembly of Governors, held on August 19,
2016, in Abuja, Nigeria; and


Review of the status of implementation of the African
Monetary
Cooperation
Programme
(AMCP)
and
adoption of the report by the Experts Group on the
refinement of the convergence criteria and the time-lines
for the creation of the African Central Bank.


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

Economic Report Third Quarter

APPENDIX TABLES


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

Economic Report Third Quarter

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

Economic Report Third Quarter

Table A1: Money and Credit Aggregates


Source: CBN

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.


Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Domestic Credit (Net)

Claims on Federal Government (Net)

Central Bank (Net)

Banks

Claims on Private Sector

Central Bank

Banks

Claims on Other Private Sector

Central Bank

Banks

Claims on State and Local Government

Central Bank

DMBs

Claims on Non-financial Public Enterprises

Central Bank

DMBs

Foreign Assets (Net)

Central Bank

DMBs and Non Interest Banks

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

Banks' Deposit with CBN

N billion


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

Economic Report Third Quarter

Table A2: Money and Credit Aggregates (Growth Rates)
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Government

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

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Governments

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

Other Asset (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Percentage Change Over Preceding Quarter
Percentage Change Over Preceding December

Source: CBN
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.


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

Economic Report Third Quarter

Table A3: Federal Government Fiscal Operations (N billion)
Q3-15
Q4-15
Q1-16
Q2-16
Q3-16
Q4-16
Q1-17
Q2-17
Q3-17
Retained Revenue

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Crude

Others/SURE-P

Expenditure

Recurrent

Capital

Transfers

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


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

Economic Report Third Quarter