Classified as


CENTRAL BANK OF NIGERIA
ECONOMIC REPORT


Fourth Quarter

i

Classified as
ABOUT THE REPORT

The Central Bank of Nigeria (CBN) Economic Report present developments
in the Nigeria economy, for dissemination to the public. The Report, which
is published on a monthly and quarterly basis, provides insights on current
developments in the real, fiscal, financial, and external sectors of the
Nigerian economy, as well as, global development that impact the
domestic economy. In addition, it reflects the policy initiatives of the CBN
in pursuit of its mandate.

The Report is targeted at a wide range of readers, including economists,
policymakers, financial analysts in the government and private sectors,
and the public. Free download of the Report, including current and past
issues can be obtained from the CBN website: www.cbn.gov.ng. All
inquiries concerning the Report should be directed to the Director,
Research Department, Central Bank of Nigeria, P.M.B. 187, Garki, Abuja,
Nigeria.


Classified as
Content


iii

Classified as
Tables
Table 2: Indices of Average World Prices of Nigeria’s Major
Agricultural Export Commodities in US$ for Fourth Quarter 2023,
Table 4: Federally Collected Revenue and Distribution to the Three
Table 7: Money and Credit Growth over preceding December (per
Table 10: Listings, De-listings, and Suspensions on the Nigerian

Figures
Figure 2: PMI in Selected Emerging Market and Developing
Figure 3: Inflation Rates in Selected Advanced Economies (per
Figure 6: 10-year Government Bond Yields for Selected Countries
Figure 8: Price Changes in Selected Metals (per cent) for Q42023
Figure 9: Real GDP Growth Rate, Q22021- Q42023, Year-on-Year
Figure 10: Sectoral Growth Rate of Real GDP, Q22021- Q42023 . 16
Figure 13: Index of Manufacturing Production (Q42022 - Q42023)
Figure 14: Top 16 Subsectors with largest Contribution to GDP


iv

Classified as
Figure 15: Subsectors with Least Contribution to GDP Growth and
Figure 19: Contribution of Processed food and farm produce to
Figure 25: Composition of Domestic Debt Stock by Instrument ... 33
Figure 27: Developments in Reserve Money (₦ Billion) and Money
Figure 35: Developments in Short-term Interest Rates (per cent) 44
Figure 37: Aggregate Market Capitalisation and All-Share Index 46
Figure 38: Volume and Value of Traded Securities on the NGX .... 47
Figure 44: Secondary Income Balance and Remittances Inflow ... 57
Figure 46: Foreign Exchange Transactions through the Economy


1 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

SUMMARY
Global economic momentum slowed in the fourth quarter of 2023, on account of the
lull in the manufacturing and services sectors. The deceleration reflected the 0.43
point decline in the average J.P. Morgan Global Composite Purchasing Managers’
Index (PMI) to 50.47 index points during the quarter. Consumer prices in Advanced
economies (AEs) slowed following tighter monetary policy and falling energy costs,
with divergent outcomes among Emerging Markets and Developing Economies
(EMDEs). In EMDEs where inflation moderated, monetary policy rate was largely
unchanged during the quarter, while those with persistent inflation opted to raise
policy rate. The global equities market was bullish, as expectations of interest rate
cuts in 2024 by the US Federal Reserve steered a decline in bond yields. At the
international crude oil market, increased supply from non-OPEC countries drove
prices down. Accordingly, the average spot price of Nigeria’s reference crude oil, the
Bonny Light (34.9° API), declined by 3.3 per cent to US$86.97 per barrel during the
review quarter.
Recovery of the domestic economy continued in Q42023, as increased demand
during the festive season supported expansion in most sectors, leading to a 3.46 per
cent growth in real output from 2.54 per cent in the previous quarter. Increased
crude oil production to 1.30 mbpd from 1.21 mbpd in the preceding quarter was
boosted by the renewed efforts to tackle pipeline vandalism and crude oil theft.
Inflationary pressure persisted, with lingering effects of PMS subsidy removal and
exchange rate passthrough pushing headline inflation to 28.92 per cent in December
2023. Food inflation increased to 33.93 per cent from 30.64 per cent in the preceding
quarter, reflecting the festive-season-induced demand and rising costs of
transportation and distribution.
The fiscal operations of the Federal Government of Nigeria (FGN) resulted in a 19.1
per cent widening of fiscal deficit, on account of an uptick in expenditure. FGN
retained revenue increased by 7.8 per cent over its level in Q32023 but was 36.4 per
cent below target. Provisional FGN expenditure rose by 14.9 per cent though it fell
short of the target by 7.9 per cent. Public debt, at ₦97,340.71 billion, was 41.5 per
cent of GDP and within the national threshold of 40.0 per cent at end-December
2023.
The financial sector generally remained robust, as key financial soundness indicators
were within regulatory thresholds. Broad money supply (M3) expanded by 50.9 per
cent to N78,738.41 billion at end-December 2023, reflecting the effects of exchange
rate reforms on net foreign and domestic assets. Tight monetary policy stance
continued, inducing a rise in domestic interest rates, enhanced investors’ appetite,
and increased subscriptions for NTBs and FGN bonds.

2 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

External sector performance resulted to a current account deficit reflecting the
negative balances in the goods, services, and primary income accounts. With lower
inflow of direct and portfolio investments, there were reductions in net financial
liabilities in both the financial account and the International Investment Position. The
stock of external reserves stood at US$33.09 billion, covering 6.6 months of import
for goods and services or 9.4 months of goods import. The average exchange rate at
the Nigerian Autonomous Foreign Exchange Market (NAFEM) depreciated to
₦843.14/US$, from ₦764.82/US$ in Q32023.


3 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

1.0
GLOBAL ECONOMIC DEVELOPMENTS
Global economic condition, in Q42023, was weighed down by
decelerations in both the manufacturing and service sectors.
Inflation continued to decline in most AEs, driven by a combination
of tighter monetary policy and decreasing energy costs, while
EMDEs recorded divergent outcomes. Monetary policy rate was
unchanged in EMDEs with falling inflation but was raised in countries
where inflationary pressure persisted. The global stock market
showed optimism during the period, on the prospect of policy rate
cuts by US Federal Reserve in 2024. Despite the ongoing tensions
in the Middle East, the spot prices of crude oil were dampened by
increased supply from non-OPEC member countries. The average
spot prices for silver, platinum and palladium also fell due to
weakened demand.
1.1
Global Economic Activity
Global economic activity slowed in the fourth quarter of 2023,
amid weak performance of both the manufacturing and service
sectors. The global composite Purchasing Managers’ Index (PMI)
decelerated to 50.47 index points in Q42023, from 50.90 index points
in Q32023, due to the decline in business confidence, driven by
weaker new order and deteriorating international trade. The pace of
expansion of the services sector, at 50.87 index points, was lower
than 51.53 index points in the preceding quarter, owing to weaker
expansions in business, consumer, and financial services.
Irrespective of the slight improvement from 48.90 index points to
49.03 index points, manufacturing PMI continued to weigh on global
economic activity.
Economic activity in Advanced Economies (AEs) showed a
mixed outcome. In the UK, economic activity expanded as the PMI
rose to 50.37 index points from 49.30 index points in the preceding
quarter, owing to increase in employment levels and improved
business expectations. The performance of the US economy
remained unchanged as the PMI stood at 50.80 index points. In
Japan and Spain, a slower pace of growth was recorded with the
Global
Economic
Activity

4 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

PMI slowing to 50.17 and 50.07 index points from 52.30 and 50.13
index points in the preceding quarter, respectively. This was driven
by weaker expansion in the service sector and a continued decline
in manufacturing output.

Table 1: Global Composite Purchasing Managers’ Index (PMI)
Source: JP Morgan

In contrast, economic activity further contracted in France, Canada,
and Italy to 44.30, 45.40 and 47.90 index points from 45.57, 48.37
and 48.77 index points in the preceding quarter, respectively. The
contraction was attributed to high interest rates, uncertain business
climate and lower consumer demand.

Q22023
Q32023
Q42023
Composite
53.77
50.90
50.47
Employment Level
52.07
51.00
50.33
New Business Orders
53.10
50.03
50.03
New Export Business Orders
48.80
47.93
48.27
Future Output
64.17
61.93
61.73
Input Prices
57.40
57.03
56.10
Output Prices
54.27
53.57
53.33


Manufacturing
49.53
48.90
49.03
Services (Business Activity)
54.97
51.53
50.87
New Business
54.67
50.73
50.60
New Export Business
52.77
50.73
49.60
Future Activity
65.27
62.50
62.47
Employment
52.77
51.30
50.87
Outstanding Business
50.57
48.47
48.77
Input Prices
60.07
59.23
59.40
Prices Charged
55.73
54.63
54.03
Economic
activity in
Advanced
Economies

5 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 1: Selected Advanced Economies’ PMIs
Source: Trading Economics/Various countries’ websites

Aside Brazil, which recorded an upturn, economic activity in
most Emerging Markets and Developing Economies (EMDEs)
indicated slower momentum, driven by fragile outcomes in
manufacturing and service sectors. During the review quarter,
economic activity rebounded in Brazil, as improvements in service
sector, business optimism, and consumer confidence raised PMI to
50.33 index points from 49.73 index points. PMI, however, slowed in
India (58.1 from 61.3 index points), Russia (53.9 from 54.6 index
points), Indonesia (51.8 from 53.2 index points), and China (51.4
from 51.5 index points). The development was attributed to weaker
expansion in both manufacturing and service sectors.
In Turkey and South Africa, declines in PMI to 47.67 and 49.30 index
points from 49.50 and 49.70 index points, respectively, signified
further contraction in economic activity during the quarter. The
development was as a result of deceleration in new orders in Turkey,
while supply challenges and persistent load shedding contributed to
the weak performance in South Africa.

UNITED
STATES
UNITED
KINGDOM
GERMANY
ITALY
JAPAN
CANADA
SPAIN
FRANCE
Q22023
Q32023
Q42023
50-point Threshold
Economic
activity in
EMDEs

6 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 2: PMI in Selected Emerging Market and Developing
Economies

Source: Trading Economics/Various countries’ websites
Note: Turkey, Indonesia and Mexico PMIs data were based on manufacturing PMI

1.2
Global Inflation
Consumer prices continued to moderate in most AEs following
tighter monetary policy and softening energy prices. Inflation
declined to 3.4 per cent in the United States from 3.7 per cent in the
previous quarter. Within the Euro area, slowdown in both energy and
food prices decelerated inflation in France (3.70% from 4.90%),
Germany (3.70% from 4.50%), Spain (3.10% from 3.50%), and Italy
(0.59% from 5.34%). The United Kingdom recorded 2.70 percentage
points drop in inflation to 4.00 per cent, due to restrictive monetary
policy and easing energy and food costs. In Japan, falling food,
energy, healthcare, and communication costs led to a decline in
inflation.

CHINA
INDIA
TURKEY
SOUTH
AFRICA
INDONESIA
MEXICO
BRAZIL
RUSSIA
Q22023
Q32023
Q42023
50-point Threshold
Global
Inflation

7 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 3: Inflation Rates in Selected Advanced Economies (per
cent)

Source: Trading Economics and Staff Computations
Inflation outcome was diverse among EMDEs during the review
period. In China, consumer prices reduced by -0.30 per cent in
Q42023, due to falls in food and transport costs. Similarly, inflation
in Brazil eased to 4.62 per cent from 5.19 per cent in Q32023 as
costs of healthcare, personal spending, and clothing decelerated
during the quarter. Inflation, however, rose in Indonesia (2.61% from
2.18%), Mexico (4.66% from 4.45%), India (5.69% from 5.02%),
Russia (7.40% from 6.00%) and Turkey (64.80% from 61.53%),
largely, due to hikes in food and transport costs.
Figure 4: Inflation Rates in Selected EMDEs (per cent)
Source: Trading Economics and Staff Computations


United
States
United
Kingdom
Japan
Canada
Germany
France
Italy
Spain
Q22023
Q32023
Q42023

China
India
Turkey
South
Africa
Indonesia
Mexico
Brazil
Russia
Q22023
Q32023
Q42023

8 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

1.3
Global Financial Markets
1.3.1 Global Financial Conditions
The global stock market was mostly bullish in Q42023, on the
likelihood of interest rate cuts by the US Federal Reserve in
2024. Advanced economies outperformed EMDEs, due to concerns
over China's real estate sector. Prospects of rate cuts spurred the
rally in US equities, especially for interest rates sensitive sectors,
such as information technology, and real estate. Considerable
growth was recorded in the US Nasdaq (14.34%), Dow Jones
(12.34%), and S&P (11.2%). Stock markets in other AEs gained
momentum as forward-looking indicators and easing inflationary
pressure suggested an imminent end to the tightening cycle. Hence,
the EURO STOXX grew by 8.3 per cent and the Germany’s DAX by
8.9 per cent, just as France’s CAC 40 and UK’s FTSE 100 recorded
increases of 5.7 and 1.6 per cent, respectively. Japan’s Nikkei 225
also increased by 5.0 per cent during the period. Across the regions,
robust performance was buoyed by a rise in industrial and financial
sectors as well as domestically focused stocks.
The performance of equities markets in EMDEs was mixed.
Notwithstanding the anticipated rate cut, returns is expected to
remain attractive in the US as interest rates stay above the historic
levels last recorded during the Global Financial Crisis. This, along
with the weakness in the properties sector of the Chinese economy
muted risk appetites in EMDEs. Ample policy stimulus in China was
yet to bolster economic recovery, as the Shenzhen Stock in Mainland
China fell by 5.8 per cent during the quarter. Equities in Russia and
Turkey posted negative returns, falling by 1.1 and 10.4 per cent,
respectively. In contrast, the South African JALSH and Brazilian
BOVESPA grew by 6.2 and 15.1 per cent, respectively.

9 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 5: Key Global Stocks

Source: Reuters Refinitiv Eikon & Trading Economics

A downward trend was observed in the global bond market
following prospects of rate cut in the coming year. In the US, the
10-year government bond yields declined by 0.71 percentage points
compared with the level in the preceding quarter, to 3.86 per cent.
The decrease was driven by the hint from the Fed that the fund rate
may be cut sooner than earlier envisaged, given the deceleration of
inflation, and slowing economic activities. The decline in the US
pulled yields down in Canada to 3.11 per cent from 4.03 per cent in
the previous quarter. Essentially, the 10-year government bonds
underperformed in all the selected advanced economies during the
quarter under review. Bond yields in the Euro area, Italy, Japan and
the UK followed a similar trajectory, declining to 2.03, 3.70, 0.62 and
3.54 per cent, respectively.
In most emerging markets and developing economies, bond yields
also declined in the quarter under review. The expectation of
impending rate cuts was the main driver of the decline across the
countries. Consequently, 10-year bond yields in Turkey, Russia, and
South Africa, declined to 23.69, 12.30 and 9.77 per cent,
respectively. In Mexico, India, and Indonesia bond yields decreased
by 9.02, 7.18 and 6.49 per cent, respectively.

Q32022
Q42023

10 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 6: 10-year Government Bond Yields for Selected
Countries

Source: Reuters Refinitiv Eikon

1.4 Global Commodity Markets
Global crude oil supply rose marginally, as OPEC and nonOPEC production increased despite voluntary production cuts
by Saudi Arabia. Crude oil supply increased by 0.6 per cent to
102.24 million barrels per day (mbpd), compared with 101.66 mbpd
in the preceding quarter, driven, largely, by an increase in non-OPEC
crude oil supply.
Non-OPEC crude supply rose by 0.37 mbpd to 74.52 mbpd due,
mainly, to increased supply from the United States, Canada, China,
Guyana, and Angola. In addition, OPEC crude oil supply also rose
slightly by 0.21 mbpd to 27.72 mbpd as larger production from Iran,
Nigeria, Libya, and Venezuela, offset the voluntary cut by Saudi
Arabia.
Global demand rose marginally by 0.1 per cent to 101.61 mbpd,
relative to 101.50 mbpd in the preceding quarter. The marginal
increase in crude oil demand was due to a slight rise in crude oil
demand from Japan and China.


US
Euro Area
UK
Japan
Canada
Italy
Mexico
India
Indonesia Turkey
South
Africa
Russia
Advanced Economies
Emerging Market and Developing Economies
Q22023
Q32023
Q42023
World Crude
Supply and
Demand

11 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Crude oil spot prices fell due, mainly, to increased supply from
non-OPEC members, including the United States and Canada,
despite tensions in the Middle East. The average spot price of
Nigeria’s reference crude oil, the Bonny Light (34.9° API), declined
by 3.3 per cent to US$86.97 per barrel, compared with US$89.90 pb
in the preceding quarter. The prices of Brent, Forcados, WTI and
OPEC Reference Basket (ORB), at US$86.67 pb, US$88.13 pb,
US$79.58 pb and US$85.42 pb, respectively, all exhibited similar
trend as the Bonny Light. The fall reflected the increased supply from
non-OPEC members, especially the US and Canada, which
outweighed the joint effects of the production cuts by Saudi Arabia,
higher global demand, and Middle East tensions.
Figure 7: Quarterly Crude Oil Prices (US$ per barrel)

Source: Refinitiv Eikon (Reuters)

Average spot prices of silver, platinum and palladium
decreased in Q42023, due to weakened demand. The average
spot prices of platinum and palladium fell by 1.7 and 12.7 per cent to
US$911.77 per ounce and US$1,090.38 per ounce, respectively.
The decrease was attributed to a glut caused by weakened demand
from the automotive industry, as the Electric Vehicle market
expands, leading manufacturers to opt for more economical

Q12022
Q22022
Q32022
Q42022
Q12023
Q22023
Q32023
Q42023
US$/pb
Bonny Light
Brent
Forcados
WTI
Opec Basket
Crude Oil
Prices
Other Mineral
Commodities

12 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

alternatives. Similarly, the price of silver declined by 1.4 per cent to
US$23.23 per ounce, from US$23.56 per ounce in Q32023. Gold,
however, recorded a price increase to US$1,976.75 per ounce, from
US$1,926.31 per ounce in Q32023, fueled by escalating tensions in
the Middle East, as investors seek safer havens for assets.
Figure 8: Price Changes in Selected Metals (per cent) for
Q42023

Source: Refinitiv Eikon (Reuters)

The average price of Nigeria’s major agricultural export
commodities declined in Q42023, due to increased supply from
the producing regions. The average index of selected agricultural
products fell by 1.3 per cent to 125.5 index points from the 127.2
index points recorded in the previous quarter. The decline was
influenced by glut in the supply of wheat and soybeans, following
favourable weather conditions and improved logistics. The prices of
cocoa, rubber, groundnut, and coffee, however, rose following
increased demand from major consumers such as China.

Gold
Silver
Platinum
Palladium
Period
With corresponding quarter
With preceding quarter
Agricultural
Commodity
Prices

13 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Table 2: Indices of Average World Prices of Nigeria’s Major
Agricultural Export Commodities (US$, Jan. 2010=100)
COMMODITY
Q42022
Q32023
Q42023
% Change
(1) & (3)
(2) & (3)

All Commodities

Cocoa

Cotton

Coffee

Wheat

Rubber

Groundnut

Palm Oil

Soya Beans

Sources: World Bank Pink Sheet


1.5
Monetary Policy Stance
Most central banks kept policy rate unchanged in Q42023, citing
moderating inflationary pressures, while some emerging
economies raised rates to curtail inflation. In the United States,
the Federal Reserve held the rates within 5.25–5.50 per cent on
account of continued disinflation. Similarly, the European Central
Bank retained policy rate at 4.50 per cent during the quarter, and the
Bank of England at 5.25 per cent. In Japan, policy rate was left at
-0.10 per cent, to reflate its economy.
Most emerging economies maintained their policy stance, except a
few still grappling with elevated inflationary pressures. China held its
rate at 3.45 per cent as prices fell for the third straight month,
marking the longest streak of deflation since October 2009. Similarly,
India maintained its rates at 6.50 per cent as inflation remained within
its target range. The central banks of Indonesia, Ghana, Mexico, and
South Africa also kept their rates unchanged at 6.0, 30.0, 11.25 and
8.25 per cent, respectively, to anchor inflation expectations. Russia,

14 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Turkey and Kenya, however, raised their rates to 16.0, 42.4, and
12.5 per cent from 13.0, 30.0 and 10.5 per cent, respectively, in
Q32023 to rein in inflation. Conversely, the Central Bank of Brazil
lowered its rate to 11.25 per cent in Q42023 from 12.75 per cent in
Q32023 as inflation maintained a downward trajectory.
Table 3: Central Bank Policy Rates (per cent)
Country

Q12023
Q22023
Q32023
Q42023
United
States


Canada


Euro Area


United
Kingdom


Japan


Brazil


Russia


India


China


South
Africa


Mexico


Indonesia


Turkey

8.50

42.5
Kenya


Ghana


Source: Various Central Banks’ websites, Trading Economics.


15 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

2.0 DOMESTIC ECONOMIC DEVELOPMENTS
2.1
Real Sector Developments
The festive season induced rise in demand, triggered expansions in
most sectors in Q42023 and underlaid the performance of the
Nigerian economy. Real Gross Domestic Product (GDP) grew by
3.46 per cent from 2.54 per cent in the preceding quarter. Headline
inflation rose to 28.92 per cent from 26.72 per cent in Q32023, due,
majorly, to the lingering effect of PMS subsidy removal and exchange
rate passthrough.
Output grew by 3.46 per cent in Q42023, driven by oil and nonoil sectors. With a growth of 12.11 per cent (year-on-year) in
Q42023, the oil sector recorded an expansion after successive
quarters of negative outcome. The upturn was a significant departure
from the contractions of 13.38 per cent in Q42022 and 0.85 per cent
in Q32023. The sector rebounding during the review quarter
reflected the leap in crude oil production to 1.30 million barrels per
day (mbpd) compared with 1.21 mbpd in the corresponding quarter.
Buoyancy of the non-oil sector continued in Q42023 with a growth of
3.07 per cent in Q42023, vis-à-vis 2.75 per cent in Q32023 and 4.44
per cent in Q42022. The growth followed improvements in the
financial institutions, telecommunication, crop production, trade,
construction, manufacturing (food, beverage, and tobacco), and real
estate subsectors.
Summary
Domestic
Output

16 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 9: Real GDP Growth Rate (Year-on-Year)

Source: National Bureau of Statistics (NBS)

2.1.1 Sectoral Performance
Sectoral analysis revealed that the performance of all the sectors,
(Services, Agriculture, and Industry) improved in Q42023. The services
sector grew by 3.98 per cent and contributed 2.24 percentage points to the
real GDP growth. It also remained the dominant sector, accounting for 56.55
per cent of aggregate GDP.
Figure 10: Sectoral Growth Rate of Real GDP (Q22021–Q42023)
Source: NBS


Q12022
Q22022
Q32022
Q42022
Q12023
Q22023
Q32023
Q42023
Percent (%)
Oil GDP
Non-oil GDP
Total GDP

Q12022
Q22022
Q32022
Q42022
Q12023
Q22023
Q32023
Q42023
Per cent
Agriculture
Industry
Services
Total GDP

17 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Services sector growth was driven by the significant contributions of
the Financial & Insurance (1.18%), Information & Communications
(1.03%), Trade (0.22%), and Real Estate (0.08%) subsectors. The
subsectors grew by 29.78, 6.33, 1.40 and 1.34 per cent, respectively.
In the Financial & Insurance subsector, the observed growth was
attributable to increased demand for services in the capital and
money markets, as well as positive sentiments which drove
commercial banks’ stock prices. Also, the continued demand for
online financial services heightened investments in fintech by
financial institutions, and propped growth in the subsector. Increased
investment in IT security by banks and fintech solutions contributed
to growth in the ICT subsector. Rising demand for digital services,
such as data/internet services, and e-commerce, resulting in 5.81
per cent growth in internet subscribers between December 2022 and
December 2023, also supported the performance of the subsector.
Expansion in the Trade subsector was primarily driven by higher
spending on consumer goods and services during the festive period.

The agriculture sector grew by 2.10 per cent, compared with 1.30 per
cent in the preceding quarter, occasioned by continued fiscal support
and increased credit to the sector. Crop production and forestry
subsectors expanded by 2.44 and 1.69 per cent, compared with 1.35
and 2.21 per cent in Q32023, respectively. However, livestock and
fishing subsectors contracted by 2.09 and 0.12 per cent, compared
with a growth of 1.18 per cent and a contraction of 2.33 per cent,
respectively, in Q32023.

With a higher growth of 3.86 per cent from 0.46 per cent in Q32023,
the industry sector strengthened amid price pressures. The impetus
was also reflected in the industrial production index (IPI), which rose

18 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

by 3.70 per cent in Q42023. Growth in the sector was precipitated by
increased activities in all its five component subsectors.
Figure 11: Index of Industrial Production (Q42022 – Q42023)

Source: CBN & NBS

Mining & Quarrying grew by 8.04 per cent, from a contraction of 1.96
per cent in Q42022, and contributed 0.38 per cent to the overall GDP
growth in Q42023. The growth was also mirrored in the index of
mining production which increased by 30.60 per cent (y-o-y),
compared with a decrease of 1.80 per cent in Q32023. The
improvement was propelled by increased crude oil and gas
production, as Nigeria’s average crude oil production rose by 7.4 per
cent to 1.30 mbpd in Q42023, compared with 1.21 mbpd in the
preceding quarter. This was due to enhanced security measures in
the Niger Delta Region against crude oil theft and vandalism of oil
installations. Nigeria’s production level was, however, 0.44 mbpd
short of its 1.74 mbpd OPEC quota.


Q42022
Q12023
Q22023
Q32023
Q42023
% change
Index
IIP [LHS]
IIP (yoy) [RHS]
IIP (QoQ) [RHS]

19 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 12: Index of Mining Production (Q42022 – Q42023)

Source: CBN & NBS
Note: IMINP- Index of Mining Production

Manufacturing subsector grew by 1.38 per cent from 0.48 per cent in
preceding quarter, contributing 0.12 per cent to GDP growth. This
was also reflected in the index of manufacturing production which
expanded by 5.00 per cent and 1.40 per cent on a y-o-y and quarteron-quarter basis vis-à-vis 5.70 per cent and 0.50 per cent in Q32023,
respectively. Likewise, the estimated average manufacturing
capacity utilisation increased by 0.30 percentage points to 57.4 per
cent in Q42023, above the level in the preceding quarter. This
followed the expanded production by firms to meet heightened
demand during the year-end festivities. Despite weakened
purchasing power, occasioned by rising inflation and exchange rate
deterioration, consumer demand for food, beverage and tobacco;
textile, apparel and footwear; and plastic and rubber products
increased. The subsector was however undermined by oil refining
activity which contracted by 35.33 per cent in Q42023.


Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
% change
Index
IMINP [LHS]
IMINP (YOY)[RHS]
IMINP (QoQ)[RHS]

20 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 13: Index of Manufacturing Production (Q42022 –
Q42023)

Source: CBN & NBS
Note: IMANP- Index of Manufacturing Production

The Construction subsector grew by 3.70 per cent in Q42023 from
3.89 per cent in the preceding quarter, contributing 0.13 per cent to
GDP growth. This performance was buoyed by increased
construction activities during the period, in spite of the higher cost of
construction materials and insecurity issues across the country.
Overall, of the 22 activity subsectors in the economy, 19 subsectors
grew, while 3 subsectors – transportation & storage, livestock, and
fishing contracted.


Q42022
Q12023
Q22023
Q32023
Q42023
% change
Index
Period
IMANP [LHS]
IMANP (yoy)[RHS]%
IMANP (QoQ)[RHS]%

21 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 14: Top 16 Contributors to GDP Growth in Q42023 (per
cent)

Source: NBS
Figure 15: Least Contributors to GDP Growth in Q42023 (per
cent)

Source: NBS

2.1.2 Inflation
Headline inflation continued to rise in Q42023, following the
increase in food and non-food components of the CPI. Yearon-year headline inflation rose to 28.92 per cent from 26.72 per
cent in Q32023, as the effects of PMS subsidy removal and
exchange rate depreciation continued to permeate the
economy. The acceleration of consumer prices was further
fuelled by elevated demand during the festive period.

(4.13%) Arts, Entertainment & Recreation
(7.44%) Water supply, sewage, waste Mang.
(3.73%) Human Health & Social Services
(3.28%) Accommodation and Food Services
(6.17%) Electricity,Gas,Steam & Air conditioner
(1.6%) Education
(2.18%) Public Administration
(1.79%) Professional, Scientific & Technical Serv.
(1.34%) Real Estate
(1.38%) Manufacturing
(3.70%) Construction
(1.40%) Trade
(8.04%) Mining and Quarrying
(2.44%) Crop Production
(6.33%) Information and Communication
(29.78%) Financial and Insurance

Fishing (-1.12%)
Livestock (-2.09%)
Transportation and Storage (-29.0%)
Headline
Inflation


22 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 16: Headline, Food and Core Inflation (Year-on-Year)
Source: CBN & NBS

Although, inflation remained largely broadbased across the
components of the CPI basket, evidence indicated that it was
gradually becoming less pervasive. Analysis indicated that in
Q42023, 70.15 per cent of items of the CPI basket were above the
historical average of 13.10 per cent (1996-2023), compared with
71.64 per cent in Q32023, and 91.04 per cent in Q42022.

Figure 17: Measures of Underlying Inflation1
Source: NBS & CBN

Although all measures of core inflation remained elevated, the trend
in trimmed mean and median moderated in the review period. This

1 Core inflation: measure of underlying inflation defined as headline less farm produce less energy prices.

Q12021 Q22021 Q32021 Q42021 Q12022 Q22022 Q32022 Q42022 Q12023 Q22023 Q32023 Q42023
Percent (%)
Headline
Core
Food

Q12022
Q22022
Q32022
Q42022
Q12023
Q22023
Q32023
Q42023
Core inflation
Trimmed Median
Trimmed Mean
Inflation
Pervasiveness

RussiaUkraine War
PMS
subsidy
removal,
Rate
unification

23 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

indicated that other measures of underlying inflation grew at a slower
pace compared to the core inflation measure. In addition, it showed
that fewer components of the inflation basket accounted for
underlying inflationary pressure unlike the core measure.
Figure 18: Component Drivers of Core Inflation
Source: NBS

Further analysis of the drivers of core inflation revealed that
processed food (11.50 pp); housing, water, elect. gas & other PMS
(3.14 pp); clothing & footwear (2.00 pp); transport (1.74 pp); and
education (1.28 pp) accounted for the uptick in core inflation in
Q42023. 2
Food inflation, ascended to 33.93 per cent (y-o-y) from 30.64 per
cent in the preceding quarter, as the effects of fuel subsidy removal
continued to aggravate transportation and logistics costs.
Furthermore, increased demand due to the festive season
contributed to the uptick in food inflation during the review quarter.


Trimmed Mean: measure of underlying inflation derived using the average rate of inflation after trimming away a
certain percentage of the distribution of price changes outliers at both ends of that distribution.
Trimmed Median: measure of underlying inflation derived by obtaining median values from inflation of CPI
components.
2 ‘PP’ means Percentage point(s)

Q12022
Q22022
Q32022
Q42022
Q12023
Q22023
Q32023
Q42023
Per cent
Meat
Fish & Sea Food
Milk,Cheese & Eggs
Oil & Fats
Sugar,Jam,Honey,etc
BREAD UNSLICED 500g
CABIN BISCUIT: LOCAL MANUFACTURE 800g PACK
CASSAVA FLOUR,SOLD LOOSE
CORN FLAKES 350g
CORN FLOUR 2kg
CUSTARD 300g
EKO(AGIDI/KAFA)
FRITTERS (PUFF-PUFF)
GARI WHITE,SOLD LOOSE
GARI YELLOW,SOLD LOOSE
GUINEA CORN FLOUR,SOLD LOOSE
MAIZE PASTE-WHITE(OGI/AKAMU)
PLANTAIN FLOUR
POP CORN
SAUSAGE BEEF (GALA)
SEMOVITA 2kg
YAM FLOUR,SOLD LOOSE
Non-Alcoholic Beverages
Alcoholic Bev. Tobacco & Kola
Clothing & footwear
Actual and imputed rentals for housing
Miscellaneous services relating to the dwelling
Furnishings, Household Equip &HH Maint.
Health
Motor cars
Motor cycles
Bicycles
Vehicle Spare Parts
Maintenance and repair of personal transport equipment
Food
Inflation

24 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 19: Contribution of Processed food and farm produce
to food Inflation
Source: NBS

The processed food component continued to drive food inflation, due
to the persisting high energy cost, arising from the PMS subsidy
removal,
which
exacerbated
the
cost
of
production
and
transportation.
Figure 20: Component Drivers of Food Inflation

Source: NBS
Food inflation in Q42023, largely, reflected the quickening in the
prices of garri (7.73 pp); meat, fish & egg (5.80 pp); yam, potatoes &

Q12022
Q22022
Q32022
Q42022
Q12023
Q22023
Q32023
Q42023
PER CENT
Processed food
Farm produce
Food Inflation
0.00
20.00
40.00
Q12022
Q22022
Q32022
Q42022
Q12023
Q22023
Q32023
Q42023
Per cent
Meat, Fish & Egg
Oil & Fats
Sugar,Jam,Honey,etc
Bread, Biscuit & Sausage
Cassava Flour, Sold Loose
Processed Corn
Garri
Flours
Fruits & Vegatables
Yam, Potatoes & other tubers
Maize Grain White Sold Loose
Millet (Jero or Maiwa) Sold Loose

25 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

other tubers (4.16 pp); fruits & vegetables (2.90 pp); rice (2.84 pp);
and oil & fats (2.19 pp).

2.1.3 Energy Sector
Electricity generation improved during the review quarter due
to increased gas supply to thermal stations. The average
electricity generation in Q42023, at 4,434.39 MW/h, increased by
12.5 per cent, above the 3,940.07 MW/h recorded in Q32023.
Likewise, the average estimated electricity consumption, increased
by 9.8 per cent to 3,548.32MW/h in Q42023, from 3,231.85 MW/h in
the preceding quarter. This was reflected in the index of electricity
production q-o-q and y-o-y, which recorded an increase of 1.5 and
6.5 per cent, compared with a contraction of 48.9 per cent and a
growth of 5.2 per cent in Q32023, respectively.

Figure 21: Index of Electricity Production (Q42023-Q42023)
Source: CBN & NBS


Q42022
Q12023
Q22023
Q32023
Q42023
IEP[RHS]
IEP (YOY)[RHS]%
IEP (QoQ)[RHS]%
Electricity
Generation

26 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023


Box 1: Prices of Selected Domestic Agricultural Commodities (N)
Prices of most farm produce soared in Q42023, with increases ranging from 2.2 per
cent for onion bulbs to 32.2 per cent for maize grain. This surge was driven by a
combination of factors such as festive season demand, the removal of PMS subsidy,
security challenges, and the influence of middlemen in the market.


Q42022
Q32023
* Q42023
% Change
% Change

UNIT

(1) & (3)
(2) & (3)

Agric eggs medium size
1kg

Beans: brown, sold loose
"

Beans: white black eye, sold loose
"

Gari white, sold loose
"

Gari yellow, sold loose
"

Groundnut oil: 1 bottle, specify
bottle
"

Irish potato
"

Maize grain white, sold loose
"

Maize grain yellow, sold loose
"

Onion bulb
"

Palm oil: 1 bottle, specify bottle
"

Rice agric, sold loose
"

Rice local, sold loose
"

Rice, medium grained
"

Rice, imported high quality, sold
loose
"

Sweet potato
"

Tomato
"

Vegetable oil: 1 bottle, specify
bottle
"

Wheat flour: prepackaged (Golden
Penny)
2kg

Yam tuber
1kg

Sources: National Bureau of Statistics and CBN Staff projections,
* and ** denote actual and provisional, respectively.


27 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

2.2
Fiscal Sector Developments
Federally collected revenue (provisional) in Q42023 was 19.6 per
cent short of the quarterly target and 6.1 per cent below the level in
the preceding quarter due to lower non-oil receipts. Provisional
Federal Government of Nigeria (FGN) retained revenue rose by 7.8
per cent compared with Q32023 but was 36.4 per cent below target.
Provisional FGN expenditure increased by 14.9 per cent relative to
the level in Q32023 but fell short of the target by 7.9 per cent. The
fiscal operation led to a 19.1 per cent widening of fiscal deficit during
the review quarter. Consolidated public debt, at N97,340.71 billion,
represented 41.5 per cent of GDP.

2.2.1 Federation Account Operations
Gross Federation Account earnings dropped in Q42023 relative
to the preceding quarter, majorly, on account of lower earnings
from non-oil sources. At N4,257.25 billion, provisional federation
account receipt fell 6.1 per cent below the level in Q32023 and 19.6
per cent short of the budget benchmark. The weaker performance
followed the 52.5 per cent plunge in Companies Income Tax (CIT)
receipts. Regarding composition, non-oil revenue remained
dominant, accounting for 74.2 per cent of total receipts, while oil
revenue made up the balance.
Higher dividends payment by the Nigerian National Petroleum
Company Limited (NNPCL), and increased receipts from Petroleum
Profit Tax (PPT) & Royalties led to a 37.1 per cent rise in oil revenue
to N1,097.20 billion, relative to Q32023. The performance, however,
was below the target by 54.5 per cent.
Non-oil revenue, at N3,160.06 billion, was 15.3 per cent below the
level in Q32023 but exceeded the target by 9.6 per cent. The drop
relative to the preceding quarter highlighted the seasonality variation
Drivers of
Federation
Revenue

28 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

associated with tax returns, particularly CIT payments, which are
largely filed in the second and third quarters of the year.
Figure 22: Gross Revenue Outturn and Benchmark (₦ Billion)

Source: Office of the Accountant-General of the Federation (OAGF) and Federal Ministry of Finance
(FMF)


Q32023
Q42023
Budget
Oil
Non-oil
Gross revenue

29 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Table 4: Federally Collected Revenue and Distribution to the
Three-Tiers of Government (₦ Billion)

Q42022

Q32023
Q42023 Budget*

Federation Revenue (Gross)
3,494.45

4,532.33
4,257.25
5,293.66
Oil
1,382.82

799.87
1,097.20
2,410.89

Crude Oil & Gas Exports
0.00

3.09
19.88
122.71

PPT & Royalties
1,361.84

513.05
625.56
2,060.26

Domestic Crude Oil/Gas Sales
0.00

0.00
56.86
25.15

Others
20.98

283.73
394.90
202.78

Non-oil
2,111.63

3,732.46
3,160.06
2,882.76

Corporate Tax
569.46

1,843.88
876.00
523.17

Customs & Excise Duties
434.32

551.53
584.41
528.97

Value-Added Tax (VAT)
650.83

937.93
1,011.35
738.44

Independent Revenue of Fed. Govt.
448.24

312.32
561.40
792.27

Others**
8.79

86.80
126.90
299.92

Total Deductions/Transfers***
1,287.47

2,545.26
2,198.65
2,058.22

Federally Collected Revenue
Less Deductions & Transfers
2,206.99

1,923.43
2,046.15
3,235.44


plus:


Additional Revenue
132.08

872.74
853.06
34.09

Balance in Special Account from 2019
0.00

0.00
0.00
0.00

Excess Crude Revenue 0.00

0.00
0.00
0.00

Non-oil Excess Revenue
119.14

38.38
98.49
34.09

Exchange Gain
12.94

834.37
754.57
0.00

Total Distributed Balance
2,339.08

2,796.17
2,899.21
3,269.53

Federal Government
915.11

1,058.00
1,046.76
1291.1

Statutory
824.20

927.94
905.50
1188.49

VAT
90.91

130.07
141.27
102.61

State Government
729.19

920.49
946.48
959.32

Statutory
426.16

486.93
475.60
617.27

VAT
303.03

433.56
470.88
342.05

Local Government
539.99

677.53
694.92
714.11

Statutory
327.87

374.04
365.30
474.68

VAT
212.12

303.49
329.62
239.43

13% Derivation
154.79

140.15
211.05
305.00


Source: OAGF, FMF and CBN Staff Estimates
Note: *Budget is based on 2023 appropriation Act, ** Includes Education Tax, Customs Special Levies
(Federation Account), National Information Technology Development Fund, Customs Special Levies,
Solid Minerals & Other Mining revenue, and other non-regular earnings; *** Deductions include cost of
revenue collections and JVC cash calls; while transfers entail provisions for FGN Independent revenue
and other non-federation revenue.


30 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023


A net balance of N2,899.21 billion was distributed to Federal
(N1,046.76 billion), State (N946.48 billion), and Local governments
(N694.92 billion). The balance of N211.05 billion was allocated to the
13% Derivation Fund for oil-producing states. Net disbursement in
Q42023 was 3.7 per cent above the level in Q32023 but was 11.3
per cent short of the quarterly target.

2.2.2 Fiscal Operations of the Federal Government
Provisional FGN retained revenue improved, largely, on
account of higher receipts from FGN Independent Revenue. At
N1,756.53 billion, FGN retained revenue was above collections in
Q32023 by 7.8 per cent, but fell short of the quarterly target of
N2,761.28 by 36.4 per cent.
Table 5: FGN Retained Revenue (₦ Billion)


Q42022
Q32023*
Q42023*
Budget*
FGN Retained
Revenue

Federation
Account

VAT Pool
Account

FGN Independent
Revenue

Excess Oil
Revenue

Excess non-oil

Exchange Gain

Others**


Source: Data from OAGF
Note: *The figures are provisional
** Others include revenue from Special Accounts and Special Levies.

Provisional aggregate expenditure of the FGN rose following
higher capital outlays. At N5,026.06 billion, expenditure in Q42023
was N652.06 billion (14.9%) above the level in Q32023 and N430.73
billion (7.9%) short of the budgeted spending. In terms of
Federal
Government
Retained
Revenue
Federal
Government
Expenditure

31 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

composition, recurrent expenditure, at 67.8 per cent continued to
dominate FGN spending, compared with 25.8 for capital outlay and
6.4 per cent for transfers.
Figure 23: Federal Government Expenditure (₦ Billion)

Source: CBN Staff Estimates and OAGF
The fiscal operations of the FGN in Q42023 resulted to a larger
deficit. The provisional fiscal deficit of the FGN, at N3,269.53 billion,
widened by 19.1 and 21.3 per cent compared to the levels in Q32023
and the proportionate target, respectively. The deficit reflected
steeper increases in expenditure relative to revenue outturns.
Table 6: Fiscal Balance (₦ Billion)

Q42022
Q32023*
Q42023*
Budget
Retained revenue

Aggregate
expenditure

Recurrent

Non-debt

Debt Service

Capital

Transfers

Primary balance
-154.42
-537.19
-1,392.55 -1,056.12
Overall balance
-1,306.06
-2,744.84
-3,269.53 -2,695.52
Source: Data from OAGF and CBN Staff Estimates
Note: *The figures are provisional


Q42022
Q32023
Q42023
Budget

Recurrent Expenditure
Capital Expenditure
Transfers
Aggregate Expenditure
Overall Fiscal
Balance

32 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Public debt stock in the review period was slightly above the
40.0 per cent national threshold. Total public debt outstanding
stood at N97,340.71 billion (41.5% of GDP), at end-December 2023,
and was 10.7 per cent, higher than the levels at end-September
2023. A breakdown of the consolidated public debt showed that,
domestic debt accounted for 60.7 per cent, while external debt
obligations constituted 39.3 per cent
Of the consolidated public debt stock, FGN owed N91,477.86 billion
(94.0% ), while the state governments made up the balance of
N5,862,85 billion (6.0%).
A disaggregation of the FGN debt obligations showed that domestic
debt was N53,258.01 billion (58.2%), while external debt accounted
for N38,219.85 billion (41.8%). Further analysis revealed that FGN
Bonds maintained its dominance, with 83.1 per cent of the total
domestic debt stock, followed by Treasury Bills (12.2%), Promissory
Notes (2.5%), and FGN Sukuk (2.1%), while others (0.1%)
constituted the balance. Of the total external debt stock, multilateral,
commercial and bilateral loans accounted for 49.8, 36.2, and 14.0
per cent, respectively.

Debt service obligations in Q42023 fell marginally by 0.4 per cent to
N2,848.88 billion, from N2,861.61 billion in Q32023. The decrease
was attributed to the lower principal and interest payments on fewer
maturing bilateral and commercial loans, relative to the preceding
the quarter. A breakdown of the total showed that domestic debt
service accounted for N2,000.60 billion (70.2%), while external debt
service constituted N848.28 billion (29.8%).
Federal
Government
Debt

33 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023


Figure 24: FGN External and Domestic Debt Composition
(₦ Billion)

Source: Debt Management Office (DMO)

Figure 25: Composition of Domestic Debt Stock by Instrument

Source: Compiled from DMO figures


External Debt
Domestic Debt
Total
FGN Bonds,
83.1%
Treasury Bills,
12.2%
Promisory
Notes , 2.5%
FGN SUKUK,
2.1%Others , 0.1%
FGN Bonds
Treasury Bills
Promisory Notes
FGN SUKUK
Others

34 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 26: Composition of External Debt Stock by Instrument

Source: Compiled from DMO figures

Near- to medium-term fiscal outlook is optimistic, on the back of
prospective rise in oil prices, enhanced crude oil production,
continued implementation of the Petroleum Industry Act (PIA 2022)
and the imminent tax reforms. The developments would likely
improve government revenue and thus widen the fiscal space.


Multilateral ,
49.8%
Commercial ,
36.2%
Bilateral,
14.0%
Multilateral
Commercial
Bilateral
Fiscal
Outlook

35 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

2.3 Monetary and Financial Developments
Key monetary aggregates grew relative to levels in the preceding
quarter, driven in part by the expansion in private sector credit.
Rising interest rates incentivised investors’ appetite for domestic
securities, leading to increased subscriptions for both the NTBs and
FGN bonds during the quarter. The financial sector remained robust
with financial soundness indicators largely within regulatory
thresholds.

2.3.1 Monetary Developments
Reserve money grew at end-December 2023, on account of a
rise in liabilities to other depository corporations (ODCs) and
currency-in-circulation (CIC). Relative to the level at endDecember 2022, reserve money increased by 54.3 per cent to
N24,735.52 billion at end-December 2023. This growth was
propelled by the 21.3 per cent and 61.9 per cent rise in CIC and
liabilities to ODCs, respectively. The elevated demand for banknotes
and coins during the festive season contributed to the rise in CIC,
while the increase in liabilities to ODCs was attributed to growth in
reserve requirement debits by the monetary authority. The stock of
reserve money was 24.1 per cent above the benchmark of
N19,933.75 billion for 2023.


Reserve Money
Summary

36 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 27: Developments in Reserve Money and Money
Multiplier

Source: Central Bank of Nigeria

Figure 28: Reserve Money Growth Over end-December 2022

Source: Central Bank of Nigeria
The volume of eNaira, as a component of CIC rose to N13.98 billion
at end-December 2023, from N2.55 billion at end-December 2022.
On a quarterly basis, the eNaira volume of eNaira grew by 36.3 per
cent in Q42023 from N10.26 billion in Q32023. The substantial
expansion reflected the increasing acceptance of eNaira by the
public for transactions. In terms of the composition of total CIC,
eNaira constituted 0.4 per cent, while banknotes and coins,
accounted for 99.6 per cent.

Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
N' Billions
Reserve Money
Liabilities to ODCs
Currency-in-Circulation
2023 Benchmark
M3 Multiplier (RHS)
-75
-50
-25

Dec-22
Feb-23
Apr-23
Jun-23
Aug-23
Oct-23
Dec-23
Per cent
Reserve Money
CIC
Liabilities to ODCs

37 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 29: Composition of Currency-in-Circulation (₦ Billion)

Source: Central Bank of Nigeria
Although broad money multiplier decreased to 3.18 from 3.25 at endDecember 2022, it underlaid the expansion of broad money supply
(M3) in the review period. Relative to the level at end-December
2022, M3 grew by 50.9 per cent to N78,738.41 billion, and surpassed
the 2023 provisional benchmark of 28.2 per cent by 22.67
percentage points.
From the asset side, M3 was propped by substantial increases in Net
foreign assets (NFA) and domestic claims, which, respectively,
added 8.02 and 57.61 percentage points to broad money growth.
The expansion in NFA reflected the 48.6 per cent upsurge in claims
on nonresidents as the exchange rate revaluation impacted official
reserve assets. Growth in domestic claims was attributed to the 42.1
and 47.3 per cent rise in net claims on central government and
claims on other sectors, respectively.
Net claims on central government mirrored the increased holdings of
government securities by depository corporations. Expansion in
claims on other sectors was driven by increases in claims on other
financial corporations (47.4%), claims on state and local government
(18.5%), and claims on the private sector (57.8%).


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

38 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Table 7: Money and Credit Growth Over Preceding December
(per cent)
Source: Central Bank of Nigeria

The growth in M3, from the liability side, was driven by the ample
increase in currency outside depository corporations (33.6%),

Dec-22
Jun-23
Sep-23
Dec-23
Contribution
to M3 growth
(Dec-23)

Benchmark
Net
Foreign
Assets

Claims
on
Non-residents


Liabilities
to
Non-residents


Net Domestic
Assets

Domestic
Claims

Net Claims on
Central
Government

Claims
on
Central
Government


Liabilities
to
Central
Government


Claims
on
Other Sectors

Claims
on
Other Financial
Corporations


Claims
on
State
and
Local
Government


Claims
on
Public
Nonfinancial
Corporations


Claims
on
Private Sector


Total
Monetary
Assets (M3)

Currency
Outside
Depository
Corporations


Transferable
Deposits


Narrow
Money (M1)

Other Deposits


Broad Money
(M2)

Securities
Other
than
Shares


Total
Monetary
Liabilities(M3)

Money Supply

39 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

transferable deposits (44.6%), other deposits (56.5%), and securities
other than shares (52.1%). In terms of relative contribution, other
deposits was foremost, adding 33.63 percentage points to M3
growth. Transferable deposits constituted 15.54 per cent, while 1.66
per cent was from currency outside depository corporations, and
0.05 per cent from security other than shares. Heightened end-year
economic activity stirred the growth in currency outside depository
corporations during Q42023, after three quarters of contraction.

2.3.2 Sectoral Credit Utilisation
The value of credit increased by 13.9 per cent to N44,536.13 billion
in Q42023, from N39,106.01 billion in the preceding quarter. The
increase was driven by expansion in loans to the agriculture (23.1%),
industry (11.7%), and services (5.4%) sectors. A breakdown
indicated that services accounted for 52.8 per cent of total credits,
industry received 42.2 per cent, while 5.1 per cent went to
agriculture.


Sectoral Credit
Utilisation


40 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Table 8: Sectoral Credit Allocation
Source: Central Bank of Nigeria
Consumer credit outstanding grew by 12.2 per cent to N3,416.42
billion in Q42023 quarter, owing to elevated expenditure during the
festive season. A disaggregation of consumer credit showed that
personal loans increased by 16.2 per cent to N2,648.89 billion, while
retail loans increased by 7.4 per cent to N767.54 billion. Personal
loans remained the major constituent of consumer credit, with a 77.5
per cent share, while retail loans accounted for 22.5 per cent. As a
proportion of total sectoral credit from ODCs, consumer credit fell to
7.7 per cent, from 7.8 per cent at end-September 2023.
Figure 30: Consumer Credit Outstanding
Source: Central Bank of Nigeria


Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
N' Billion
Personal loan
Retail loan
Total
% of total credit by the ODC
SECTORS
Allocation (₦ Billion)
Share in Total (%)
Growth
(%)
Dec-22
(1)
Sep-23
(2)
Dec-23
(3)
Dec-

(4)
Sep-

(5)
Dec-23
(6)
(3) & (2)
[a] Agriculture

[b] Industry

Manufacturing

[c] Services

Finance, Insurance &
Capital Market
-

3,629.10

4,327.86
8.96

9.28

9.72
19.25
Trade & General
Commerce

TOTAL

Consumer
Credit

41 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 31: Composition of Consumer Credit in per cent

Source: Central Bank of Nigeria
2.3.3 Financial Developments
2.3.3.1
Money Market Developments
Banking system liquidity moderated relative to the level in the
preceding quarter. Average banking system liquidity declined by
30.7 per cent to N248.74 billion from N358.91 billion in the preceding
quarter. Although fiscal injections increased by 3.7 per cent to
N2,899.22 billion, from N2,796.17 billion in Q32023, and OMO
maturities worth N60.00 billion were repaid during the quarter, new
OMO issues amounted to N575.00 billion, resulting in a net
withdrawal of N515.00 billion.
Despite the moderation in liquidity, activity at the standing lending
facility (SLF) declined to N3,660.56 billion, with an average daily
request of N69.07 billion, compared with N5,825.75 billion and N0.10
billion, respectively, in the preceding quarter. Placement at the
standing deposit facility (SDF) increased to N7,844.63 billion, with a
daily average of N130.74 billion, compared with N2,442.89 billion,
and daily average of N38.17 billion, respectively, in the preceding
quarter.
Notably, applicable rate for the SLF was 19.75 per cent and 15.75
per cent for the SDF, vis-à-vis the preceding quarter’s range of
19.50–19.75 for the SLF and 11.50–15.75 for the SDF, reflecting the

Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Personal loan
Retail loan
Industry Liquidity
Condition

42 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

asymmetric corridor of +100/-300 around the monetary policy rate of
18.75 per cent.
Figure 32: Transactions at the Standing Facility Window

Source: Central Bank of Nigeria

Patronage of NTBs and FGN bond increased due to higher
yields during the period. NTBs worth ₦851.48 billion, ₦7,439.02
billion, and ₦2,650.77 billion were offered, subscribed, and allotted,
respectively, in the review quarter, relative to ₦1,407.36 billion,
₦5,775.89 billion, and ₦1,407.36 billion in the third quarter. Higher
subscription for the longer end of bills, at ₦7,124.50 billion or 95.8
per cent of total subscription (bid rate of 13.0±3.8 %), could be
attributed to improved investor confidence.

Figure 33: Primary Market NTBs (₦ Billion)

Source: Central Bank of Nigeria


Dec-22
Sep-23
Dec-23
N Billion
Standing Lending Facility
Standing Deposit Facility

Offer
Subsciption
Allotment
Q4 2022 (N'B)
972.99
2655.07
852.93
Q3 2023 (N'B)
1407.36
5775.89
1407.36
Q4 2023 (N'B)
851.48
7439.02
2650.77
Primary Market

43 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023


Transactions at the FGN bond, segment exhibited mixed trends.
Total amount offered, subscribed, and allotted were N1,080.00
billion, N1,714.82 billion and N1,042.89 billion, compared with
N1,080.00 billion, N1,548.69 billion and N1,135.99 billion,
respectively, in the preceding quarter. The bid and marginal rates
stood at 17.0 (±3.0) per cent and 16.5 (±1.6) per cent, compared with
13.5 (±4.5) per cent and 14.4 (±1.9) per cent, respectively, in the
preceding quarter.
Figure 34: Primary Market Auctions of FGN Bond (₦ Billion)

Source: Central Bank of Nigeria

Short-term interest rates rose consistent with the relatively low
level of liquidity level in the banking system. The average
interbank call rate increased by 6.74 percentage points to 14.53 per
cent from 7.78 per cent in the preceding quarter. From 9.19 per cent
in the preceding quarter, the open buy back (OBB) rate rose by 4.68
percentage points to 13.87 per cent. The Nigeria Interbank Offered
Rate (NIBOR) call rate increased by 4.73 percentage points to 14.21
per cent from 9.48 per cent, while the NIBOR-30 rose to 15.00 per
cent from 10.04 per cent.

Offer
Subsciption
Allotment
Q4 2022 (N'B)

995.39
641.55
Q3 2023 (N'B)

1548.69
1135.99
Q4 2023 (N'B)

1714.82
1042.89
Interest Rate
Developments

44 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 35: Developments in Short-term Interest Rates

Source: Central Bank of Nigeria

Lending rates increased during the review quarter in line with
the tight monetary stance. Prime and maximum lending rates
increased marginally by 0.16 percentage points and 0.90 percentage
points above their levels in the preceding quarter, to 14.25 per cent
and 28.30 per cent, respectively. Weighted average term deposit
(WAVTD) rate also rose, marginally, by 0.44 percentage point to 7.17
per cent, from 6.73 per cent. Resultantly, the spread between the
weighted average term deposit and maximum lending rates widened
to 21.13 percentage points, from 20.67 percentage points in the
preceding quarter.
Figure 36: Trend in Average Term Deposit and Lending Rates

Source: Central Bank of Nigeria.
Note: PLR= Prime lending rate; MXLR= Maximum lending rate; WAVTD= Weighted Average term
deposit rate; and SPRD= Spread.

7.5

12.5

17.5

Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Per cent
Interbank call rates
OBB
NIBOR
NIBOR 30
MPR

Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Percentage Point
Per cent
PLR
MXLR
WAVTD
SPRD(RHS)

45 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

2.3.3.2
Capital Market Developments
The Nigerian capital market sustained a bullish trend, as
equities performance improved. This was underpinned by the
better-than-expected appreciation in the price of banking, and
oil and gas stocks, as well as expectation around the CBN’s
planned recapitalisation of banks, which sparked interest in the
stocks of Systematically Important Banks (SIBs).
Aggregate market capitalisation increased by 18.9 per cent to
N75,196.53 billion, compared with the N63,222.53 billion at endSeptember 2023. Analysis indicated that Exchange Traded Funds
(ETF), appreciating by 74.7 per cent, performance, followed by debt
(27.5%) and equities (12.6%) to close at N23.02 billion, N34,256.00
billion and N40,917.51 billion, respectively. However, the equities
component, comprising 54.4 per cent of the aggregate market
capitalisation, sustained its dominance in terms of contribution, while
debt and ETF constituted the balance.
The All-Share Index (ASI) improved by 12.6 per cent to 74,773.77
index points, compared with the 66,382.14 index points in the
preceding quarter. The improvement was on account of price
appreciation in banking and oil & gas stocks following the
announcement of the intended banking sector recapitalisation. The
market performance was also underpinned by the listings on the
Exchange. Renewed investor confidence and improve in Q32023
corporate earnings reports induced strong buying interest in blue
chip stocks.


Market
Capitalisation
NGX All- Share
Index

46 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023


Figure 37: Aggregate Market Capitalisation and All-Share
Index
Source: Nigeria Exchange (NGX) Limited

All the major capital market indices tracked were bullish, except
NGX-Consumer Goods, NGX- Sovereign Bond and NGX-AseM,
which trended downward, relative to the levels in the preceding
quarter.

Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Index Points
N' Billion
Aggregate Market Cap (LHS)
All Share Index (RHS)

47 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Table 9: Nigeria Exchange (NGX) Limited Sectoral Indices
Sectoral Indices
2023Q2
2023Q3
Change (%)
NGX-Growth
2,771.87
6,299.16
127.3
NGX-Banking
666.22
897.2
34.7
NGX-Meri Value
3,938.19
5,194.34
31.9
NGX-Afri Bank Value
1,648.45
2,075.50
25.9
NGX-CG
1,863.18
2,209.04
18.6
NGX-Main Board
2,951.55
3,461.22
17.3
NGX-30
2,442.11
2,790.28
14.3
NGX-Oil & Gas
914.02
1,043.06
14.1
NGX-Pension
2,848.38
3,241.03
13.8
NGX-Insurance

321.66
13.7
NGX-Afri Div Yield
6,571.72
7,423.65
13.0
NGX-Pension Board
1,160.90
1,308.54
12.7
NGX-Lotus II
4,323.21
4,619.73
6.9
NGX-Premium
6,775.03
7,227.22
6.7
NGX-Meri Growth
4,269.37
4,547.40
6.5
NGX-Industrial Goods
2,662.86
2,712.27
1.9
NGX-Consumer Goods
1,132.38
1,121.29
-1.0
NGX-Sovereign Bond
769.82
759.75
-1.3
NGX-AseM
658.99
639.55
-2.9
Source: Nigerian Exchange (NGX) Limited
The value and volume of equities traded on the Exchange were
N433.03 billion and 26.76 billion shares compared with N632.94
billion and 43.27 billion in Q32023, respectively. The total deals
traded was 416,324 deals, relative to 519,699 deals in the preceding
quarter.
Figure 38: Volume and Value of Traded Securities on the NGX
Source: Nigerian Exchange (NGX)

Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Billion Unit of Shares
N' Billion
Value of Traded Securities (LHS)
Volume of Traded Securities (RHS)

48 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023


In the review quarter, there were seventeen new listings, eighteen
supplementary listings and three delisting on the Exchange,
compared with twenty-two new listings, thirteen supplementary
listings and one delisting in the preceding quarter. There was also
one suspension in the review quarter. The listings comprised savings
bonds, ordinary shares, rights issues, futures contracts and
subordinated bonds.


49 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Table 10: Listings, De-listings, and Suspensions on the
Nigerian Exchange Limited in Q42023
Company/Security
Shares Units/Price
Remarks
New/Supplementary/
Suspensions/Delisting
FGN Bonds 14.70%
FGN JUNE 2033

A total of N18,570,000,000.00

10-year bonds of 18,570,000
units at N1,000 per unit.
Savings bond
New
FGN Bonds 15.45%
FGN JUNE 2038

A
total
of
N100,643,000,000.00
15 -year
bonds of 100,643,000 units at
N1,000 per unit.
Savings bond
New
FGN Bonds 15.70%
FGN JUNE 2053

A
total
of
N221,562,000,000.00
30 -year
bonds of 221,562,000 units at
N1,000 per unit.
Savings bond
New
FGN Bonds 11.07%
FGN OCT 2025

N565,149,000 2-year savings
bond of 565,149 units at N1,000
per unit.
per share.
Savings bond
New
FGN Bonds 12.07%
FGN OCT 2026

N941,598,000.00
3-year savings bond of 941,598
units at N1,000 per unit.
per share.
Savings bond
New
Lagos
State
Government
N19,815,000,000.00
7-year
bond of 19,815,000 units at
N1,000 per unit.
per share.
Bond Issuance
New
VFD Group Plc
190,027,365 Ordinary Shares of
50 Kobo each at N244.88
per share.
Ordinary
shares
New
Chapel Hill Denham
Management
Limited’s
Nigerian
Infrastructure Debt
Fund
853,694,759 units of shares of
N100.00 at N108.39 per share.
Ordinary
shares
New
Guinea
Insurance
Plc
1,802,800,000 ordinary shares
of 50 kobo each at 50 Kobo per
share.

Rights issue
Supplementary
FGN
Bonds
14.70% FGN
JUN 2033
A total of 22,269,000 units
Savings bond
Supplementary
FGN Bonds 5.45%
FGN
JUN 2038
A total of 54,864,000 units
Savings bond
Supplementary
FGN Bonds 15.70%
FGN
JUN 2053
A total of 237,094,000 units
Savings bond
Supplementary
FGN Bonds 14.55%
FGN APR 2029
A total of 20,534,000 units
Savings bond
Supplementary
FGN Bonds 13.53%
FGN MAR 2025
A cumulative of 131,461,000
units
Savings bond
Supplementary
FGN Bonds 12.50%
FGN APR 2032
A cumulative of 213,452,000
units
Savings bond
Supplementary
FGN Bonds 13.00%
FGN JAN 2042
A total of 374,870,000 units
Savings bond
Supplementary
FGN
Bonds
16.2499%
FGN
APR 2037
A total of 627,807,000 units
Savings bond
Supplementary
FGN Bonds 14.55%
FGN APR 2029
A total of 73,699,000 units
Savings bond
Supplementary
Capital Hotels Plc

Total issued shares
N/A
Delisting
MeCure Ind Plc

A
total
of
4,000,000,000
Ordinary Shares of 50kobo each
at N2.96 per share on NGXGrowth Board
Ordinary
Shares
New

50 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Courteville
Business Solutions
Plc

Total issued shares
N/A
Delisting
FGN Bonds 14.55%
FGN
APR 2029
Additional 31,470,000 units
FGN Bond
Supplementary
FGN Bonds 14.70%
FGN
JUN 2033
Additional 33,193,000 units
FGN Bond
Supplementary
FGN Bonds 15.45%
FGN
JUN 2038
Additional 47,065,000 units
FGN Bond
Supplementary
FGN
Bonds
15.70% FGN
JUN 2053
Additional 322,769,000 units
FGN Bond
Supplementary
Union
Bank
of
Nigeria Plc
Total issued shares
N/A
Delisting
Lagos
State
Government
A total 115,000,000 units

Bond issuance
New
Consolidated
Hallmark Insurance
Total issued shares
N/A
Suspension
NGX30M4
N2,750.75 per share
Futures
Contracts
New
PENSIONM4
N3,225.50 per share
Futures
Contracts
New
14.55% FGN
APR 2029
Additional 28,614,000 units
FGN Bond
Supplementary
14.70% FGN
JUN 2033
Additional 9,148,000 unit
FGN Bond
Supplementary
15.45% FGN
JUN 2038
Additional 24,343,000 units
FGN Bond
Supplementary
15.70% FGN
JUN 2053
Additional 211,523,000 Units
FGN Bond
Supplementary
Wema Bank Plc
8,572,103,573 ordinary shares
of 50 kobo each at N4.66 per
share
Rights Issue
New
VFD Group Plc
63,342,455 ordinary shares of
50 kobo each at N197.33 per
share
Rights Issue
New
12.287%
FGNSB
DEC 2025
Total of 477,975 units
Savings Bonds
New
13.287%
FGNSB
DEC 2026
Total of 1,195,718 units
Savings Bonds
New
16% FCMB OCT

Total of 26,000,000
Units at
N1,000 per share
Subordinated
Bonds
New
Source: Nigerian Exchange Limited (NGX).
Notes: FGN=Federal Government of Nigeria; Plc=Public Limited Liability Company; N/A=Not
available; FCMB=First City Monument Bank.

2.3.2.2 Financial Soundness Indicators
The banking industry remained robust in key financial
soundness indicators stayed within industry regulatory
thresholds. The banking system Capital Adequacy Ratio (CAR)
increased marginally by 0.1 percentage point to 13.1 per cent at endDecember 2023, relative to the 13.0 per cent recorded in the
preceding quarter. The development reflected rise in banks’ total
qualifying capital, relative to the increase in risk-weighted assets,

51 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

due to increased profits and dividends declarations in Q32023
results. The ratio remained above the 10.0 per cent benchmark for
banks with national/regional authorisation.
Banks’ asset quality, measured by the non-performing loans (NPL)
ratio decreased by 0.3 percentage point to 4.1 per cent in the review
quarter, reflecting improvement in loan recoveries. The ratio
remained below the prudential benchmark of 5.0 per cent.
The industry Liquidity Ratio (LR) declined to 44.0 from 50.7 per cent
in the preceding quarter. The LR remained above the minimum
regulatory benchmark of 30.0 per cent, indicating sufficient liquidity
and continued ability of banks to meet short-term obligations.


52 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

2.4
External Sector Developments
Review of external sector performance in Q42023 indicated a deficit
current account balance vis-à-vis surplus in the preceding quarter.
The downturn reflected deficit in the goods, services and primary
income accounts. A lower net incurrence of financial liabilities was,
concomitantly, recorded in the financial account, due to diminishing
inflow of direct and portfolio investments. Likewise, the International
Investment Position posted a lower net financial liability of US$82.58
billion. The external reserves stood at US$33.09 billion at endDecember, relative to US$32.85 billion at end-September 2023. The
level of external reserves could cover 6.6 months of import for goods
and services or 9.4 months of import for goods only. The average
exchange rate of the naira per US dollar at the NFEM depreciated
by 9.3 per cent to ₦843.14/US$, compared with ₦764.82/US$ in
Q32023.
2.4.1 Current and Capital Account
The current account recorded to a deficit position from a
surplus in the preceding quarter. The current account posted a
deficit of US$3.48 billion or 4.3 per cent of GDP in Q42023,
compared with a surplus of US$1.55 billion or 1.9 per cent of GDP in
Q32023. This was due to the deficit in the goods account and the
higher deficit in the services and primary income accounts.


53 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

Figure 39: Current Account Balance

Source: Central Bank of Nigeria

Earnings from merchandise export increased on account of
higher commodity prices and increased in domestic crude oil
production. Aggregate export earnings increased by 8.9 per cent to
US$14.92 billion, from US$13.70 billion in Q32023. A breakdown
showed that oil receipts rose to US$13.41 billion, from US$12.64
billion in Q32023, largely, due to increase in domestic production of
crude oil to 1.31mbd. Similarly, non-oil export receipts, grew to
US$1.51 billion, from US$1.06 billion in the preceding quarter,
following the increase in electricity, re-exports and other non-oil
exports. In terms of share, crude oil and gas export constituted 89.9
per cent of total export, while non-oil export accounted for the
remaining 10.1 per cent.
Merchandise import bills increased, on account of higher
importation of non-oil products. Merchandise import rose
significantly by 54.2 per cent to US$17.38 billion, from US$11.27
billion in Q32023. Importation of oil products declined to US$3.73
billion, from US$4.25 billion in Q32023, while non-oil products
imports, increased significantly by 94.4 per cent to US$13.65 billion,
relative to the preceding quarter. Analysis by share showed that nonoil import remained dominant, accounting for 78.5 per cent of the

Q42022
Q12023
Q22023
Q32023
Q42023
US$ Billion
Export
Performance
Merchandise
Import

54 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

total, while petroleum products constituted the balance of 21.5 per
cent.
A breakdown of import by sector revealed that raw materials and
machinery accounted for the largest share of 62.8 per cent. Other
sectoral import shares were manufactured products (12.9 %); food
products (10.4%), petroleum products (5.8%), transport (3.9%),
agricultural products (2.2%), and minerals (2.0%).

Figure 40: Import by Sector in Per cent

Source: Central Bank of Nigeria

The deficit in the services account widened by 5.7 per cent to
US$3.53 billion, compared with US$3.34 billion in Q32023, driven,
largely,
by
higher
payments
for
financial
services,
and
telecommunications, computer & information services.
Further analysis revealed that the total payments increased to
US$4.66 billion, from US$4.48 billion in the preceding quarter.
Payments for financial services and telecommunications, computer
& information services rose by 21.4 and 87.5 per cent, to US$0.17
billion
and
US$0.15
billion,
respectively.
Payments
for
transportation, travel, insurance and pension services, other
Raw Materials 62.8
Manufactured
Products
12.9
Food Products
10.4
Petroleum Products
5.8
Minerals
2.0
Transport
3.9
Agricultural Products
2.2
Services

55 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

business services, personal, cultural & recreation services and
government goods & services, however, decreased by 9.9, 4.1, 5.2,
10.2, 66.7 and 16.7 per cent to US$1.54 billion, US$ 1.16 billion,
US$0.15 billion, US$0.88 billion, US$0.05 billion and US$0.10
billion, respectively.
In terms of share, transportation was the largest at 33.1 per cent,
while travels recorded 24.8 per cent. Other business services
(18.9%),
construction
(8.6%),
financial
services
(3.7%),
telecommunications (3.2%), and insurance & pension (3.1%) were
notable contributors. Government services, and other categories of
services accounted for the balance.

Figure 41: Share of Service Out-Payments in Per cent

Source: Central Bank of Nigeria.

At US$1.11 billion, receipts from services decreased by 1.8 per cent,
driven mainly by transport and travel services. Transport services
decreased by 3.5 per cent to US$0.47 billion, while travel services
declined by 7.6 per cent to US$0.12 billion, due to lower personal
travel services, compared with the level in the preceding quarter.
Telecommunication services also decreased by 52.4 per cent to
US$0.03 billion, relative to the level in Q32023. Receipts from
financial and government services, however, increased by 8.2 per

Transportation
Travels
Construction
Insurance
Communications
Government
Other business
Financial
Others

56 | P a g e Central Bank of Nigeria Economic Report
Q42023
ECONOMIC REPORT, FOURTH QUARTER 2023

cent and 2.0 per cent to US$0.33 billion and US$0.12 billion,
respectively, compared with US$0.31 billion and US$0.12 billion in
the preceding quarter.
In terms of share, receipts from transportation services was 42.2 per
cent; financial services, 29.8 per cent; government goods and
services,
11.1
per
cent;
travels,
10.9
per
cent;
and
telecommunication services, 2.3 per cent. Others accounted for the
balance.
Figure 42: Share of Services Receipts in Per cent
Source: Central Bank of Nigeria.

The deficit in the primary income account widened, due to
higher payments of equity and investment fund shares. Primary
income account widened by 13.3 per cent expansion of deficit to
US$3.23 billion in Q32023 from US$2.85 billion in Q32023, due to
higher equity and investment fund shares. A disaggregation showed
that the investment income sub-account recorded a higher deficit
position of US$3.71 billion compared with US$3,61 billion in Q32023,
on account of increased payment of direct investment income,
particularly income on equity and investment fund shares.
The compensation of employees account maintained a surplus
position of US$0.05 billion, lower by 19.2 per cent, when compared
with the level in the preceding quarter.

Transportation
Travels
Financial
Communications
Government
Others
Primary Income

57 | P a g e Central Bank of Nigeria Economic Report
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Figure 43: Primary Income Balance (US$ Billion)
Source: Central Bank of Nigeria.

The secondary income account maintained a surplus position,
driven majorly, by workers’ remittances. The secondary income
account surplus increased by 8.1 per cent to US$5.84 billion, from
US$5.40 billion in Q32023. The development was attributed to
higher inflow of private sector transfers, particularly, workers’
remittances, which increased by 6.9 per cent to US$4.90 billion from
US$4.58 billion in Q32023. Similarly, general government transfers
increased by 14.8 per cent to US$0.93 billion from US$0.81 billion in
the preceding quarter.
Figure 44: Secondary Income Balance and Remittances Inflow

Source: Central Bank of Nigeria.

Q3 2022
Q4 2022
Q1 2 0 2 3
Q2 2023
Q3 2023
Q4 2023

Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
US$ Billion
Secondary Income Balance
Remittances
Government Transfers
Secondary
Income

58 | P a g e Central Bank of Nigeria Economic Report
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ECONOMIC REPORT, FOURTH QUARTER 2023

2.4.2 Financial Account
The financial account recorded a lower net incurrence of
financial liabilities, driven by decreased in inflow of direct and
portfolio investments. The financial account recorded a lower net
incurrence of liabilities of US$7.44 billion (9.3 % of GDP), compared
with US$8.13 billion (10.0 % of GDP) in Q32023.
A higher inflow of US$8.38 billion was recorded in Q42023,
compared with US$3.12 billion in the preceding quarter. The
development was due to an increase in the inflow of other investment
loans. Foreign Portfolio Investment (FPI) inflow decreased by 5.3 per
cent to US$2.73 billion, relative to US$2.88 billion in Q32023, due to
dampened investor confidence from exchange rate volatility. Direct
investment inflow declined by 18.3 per cent to US$0.71 billion,
following lower investment in equity and investment fund shares,
compared to the preceding quarter. Inflow in Other investment
increased significantly to US$4.92 billion, against a divestment of
US$0.48 billion in Q32023, attributed, largely, to increased
incurrence of loans.
A net acquisition of US$0.94 billion in financial assets was recorded,
an improvement, when compared to disposal of assets totalling
US$5.01 billion in Q32023. The development reflected an acquisition
of other investment valued at US$0.22 billion, against a disposal of
US$4.39 billion in the preceding quarter, due majorly to the
acquisition of foreign currency and deposits by residents. Portfolio
investments recorded a higher net acquisition of US$0.21 billion,
compared with US$0.05 billion in Q32023. Direct investments also
recorded a higher net acquisition of US$0.19 billion, compared with
US$0.04 billion, following reduced divestment in equity and
investment fund shares.

Net Acquisition
of Asset
Net Incurrence
of Liability
Financial
Account
Developments

59 | P a g e Central Bank of Nigeria Economic Report
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2.4.3 External Debt
Nigeria’s public sector external debt stock at end-December 2023
stood at US$42.50 billion (13.2 per cent of GDP). A breakdown
showed that the multilateral loans, from the World Bank,
International Monetary Fund, and African Development Bank
Groups, amounted to US$21.15 billion, accounting for 49.8 per cent
of the total. A total of US$15.12 billion or 35.6 per cent of the total
was borrowed from commercial sources in the form of Euro Bonds.
Loans from bilateral sources was US$5.96 billion, or 14.0 per cent of
the total, syndicated loan (arranged by African Finance Corporation)
stood at US$0.27 billion or 0.6 per cent of the total debt stock.
The external debt service payment stood at US$0.94 billion at endDecember 2023, relative to US$1.39 billion in the preceding quarter.
A breakdown showed that interest payment totalled US$0.21 billion,
accounting for 21.8 per cent of the entire debt service payment.
Principal repayment totalled US$0.72 billion, or 75.9 per cent of the
total, while other payments made up the balance. An analysis of
interest payments showed that interest payment on commercial
borrowings accounted for 78.0 per cent of the total at US$0.16 billion,
while interest on multilateral loans amounted to US$0.04 billion or
20.0 per cent of the total. Interest payments to bilateral institutions
accounted for the balance.

2.4.4 International Investment Position (IIP)
Nigeria's International Investment Position posted a lower net
financial liability of US$82.58 billion. The stock of financial assets
rose to US$104.54 billion at Q42023, compared with US$101.45
billion in the preceding quarter, due, largely, to the 5.3 per cent
increase in the stock of ‘other investment assets’ to US$49.21 billion
compared with US$46.72 billion in the preceding quarter. The stock
Public Sector
External Debt
International
Investment
Position

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ECONOMIC REPORT, FOURTH QUARTER 2023

of direct investment assets declined marginally by 0.2 per cent to
US$17.66 billion, from US$17.70 billion at Q32023, owing to lower
investments in equity and debt instruments. The stock of portfolio
investment increased by 5.1 per cent to US$4.31 billion, relative to
the preceding quarter.
The stock of financial liabilities increased by 1.2 per cent to
US$187.12 billion, from US$184.84 billion at Q32023. The increase
was attributed, mainly, to the growth in the stock of other investment
liabilities by 4.8 per cent to US$81.91 billion, from its level in Q32023.
The stock of direct investment and portfolio investment liabilities
were US$73.37 billion and US$31.59 billion, compared with
US$75.03 billion and US$31.41 billion in Q32023, respectively.

2.4.5. External Reserves
The external reserves remained above the benchmark of 3.0
months of import cover. The external reserves stood at US$33.22
billion at end-December 2023, relative to US$32.79 billion at endSeptember 2023, and could cover 6.6 months of import for goods
and services or 9.4 months of import for goods only.
Figure 45: External Reserves and Months of Import Cover
External
Reserves

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ECONOMIC REPORT, FOURTH QUARTER 2023


Source: Central Bank of Nigeria

A breakdown of the external reserves showed that the share of CBN
was US$28.71 billion; Federal Government, US$4.51 billion, while
the Federation accounted for the balance of US$0.67 million. In
terms of currency composition, the US dollar was US$25.18 billion
(75.8%); Special Drawing Rights, US$4.39 billion (13.2%); Chinese
Yuan, US$3.27 billion (9.8%); British Pounds, US$0.23 billion
(0.7%); Euro, US$0.15 billion (0.5%); while other currencies
accounted for the balance.
2.4.6 Foreign Exchange Flows through the Economy
Net foreign exchange inflow to the economy stood at US$9.30
billion in the review period. Foreign exchange inflow into the
economy increased by 0.4 per cent to US$16.06 billion from
US$15.99 billion in the Q32023. Foreign exchange inflow through
the Bank decreased to US$5.01 billion from US$6.37 billion in the
preceding quarter. However, foreign exchange inflow through
autonomous sources increased to US$11.05 billion from US$9.62
billion in the preceding quarter.

q1 2022
q2 2022
q3 2022
q4 2022
q1 2023
q2 2023
q3 2023
q4 2023
US$ Billion
External Reserves - LHS
Months of Import (Goods only)
Months of Import (Goods and Services)
Foreign
Exchange Flows

62 | P a g e Central Bank of Nigeria Economic Report
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ECONOMIC REPORT, FOURTH QUARTER 2023

In contrast, foreign exchange outflow through the economy fell by
17.1 per cent to US$6.77 billion, relative to US$8.16 billion in the
Q32023. Outflow through the Bank decreased by 31.2 per cent to
US$4.95 billion from US$7.20 billion in the preceding quarter.
However, autonomous outflow rose by 88.4 per cent to US$1.82
billion from US$0.96 billion in the preceding quarter.
Consequently, net foreign exchange inflow through the economy
increased by 18.7 per cent to US$9.30 billion from US$7.83 billion in
preceding quarter. Net inflow through autonomous sources rose to
US$9.23 billion from US$8.65 billion in the preceding quarter, while
net inflow of US$0.06 billion was recorded through the Bank,
compared to a net outflow of US$0.82 billion in the preceding
quarter.
Figure 46: Foreign Exchange Transactions through the
Economy (US$ Billion)

Source: Central Bank of Nigeria
The average turnover at the Nigerian Foreign Exchange Market
(NFEM) increased by 26.1 per cent to US$0.12 billion, relative to
US$0.97 billion in Q32023, reflecting increased trading activities in
the market.
Figure 47: Turnover in the I&E Foreign Exchange Market
Q4 2022
Q3 2023
Q4 2023
Inflow
14.62
15.99
16.06
Outflow
8.85
8.16
6.77
Netflow

Inflow
Outflow
Netflow

63 | P a g e Central Bank of Nigeria Economic Report
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ECONOMIC REPORT, FOURTH QUARTER 2023


Source: Central Bank of Nigeria.

2.4.7 Exchange Rate Movement
The average exchange rate of the naira per US dollar at the NFEM
depreciated by 9.3 per cent to ₦843.14/US$, compared with
₦764.82US$ in Q42023.
The performance of selected emerging market currencies against
the US dollar was mixed during the review period. The Russian ruble
and Chinese RMB appreciated by 1.6 per cent and 0.6 per cent,
respectively, relative to the levels in the preceding quarter. While the
appreciation of the Russian ruble was due to elevated domestic
interest rate and tighter capital controls that of the Chinese RMB was
attributed to the weakening of US dollar. Conversely, the South
African rand depreciated by 0.4 per cent due to falling commodities
exports and global slowdown.

Figure 48: EMEs Currency Values to the US dollar

Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Per cent
US $Million
Average Turnover(LHS)
Rate of Turnover(RHS)
Average
Exchange Rate
Emerging Market
Currencies

64 | P a g e Central Bank of Nigeria Economic Report
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ECONOMIC REPORT, FOURTH QUARTER 2023


Sources: Central Bank Nigeria & Reuters

Table 11: EMEs Currency Rates to the US dollar
Sources: Central Bank of Nigeria & Reuters

3.0
Global Outlook
Global economic growth is expected to moderate to 3.0 per
cent, from 3.5 per cent in 20223. The slowdown is primarily
attributed to uneven recovery across economies from the aftermath
of the COVID-19 pandemic, the impact of the Russian-Ukraine war,
and the consequences of increasing geoeconomic fragmentation,
coupled with monetary policy tightening.

3 IMF WEO (October 2023)

Chinese RMB
Nigerian Naira
South African Rand
Russian Ruble
Depreciation/Appreciation
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2024
Period
Chinese
RMB
Nigerian
Naira
South
African
Rand
Russian
Ruble
Q4 2022

Q3 2023

Q4 2023


65 | P a g e Central Bank of Nigeria Economic Report
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Among Advance Economies (AEs,) growth is projected to slow to
1.5 per cent, from 2.6 per cent in 2022, reflecting labour shortages,
weakened manufacturing activities, and restrictive monetary policy.
For Emerging Markets and Developing Economies (EMDEs), growth
is expected to experience a modest decline to 4.0 from 4.1 per cent
in 2022, with variations across regions. While emerging and
developing Asia are expected to see a rise in growth in 2023 due to
increased demand, economic activities in sub-Saharan Africa are
projected to contract due to adverse weather conditions, global
economic slowdown, and supply chain constraints.
Global headline inflation is forecasted to decrease from its peak
of 8.7 per cent in 2022 to 6.9 per cent in 2023. Advanced
Economies are anticipated to experience significant disinflation,
attributed to monetary policy tightening and lower vulnerability to
shocks stemming from higher commodity prices and exchange rates.
3.1
Domestic Outlook
Nigeria's near-term economic growth outlook remains positive,
despite headwinds. The positive outlook is anchored on the
expected favourable trajectory of crude oil prices and an
improvement in domestic crude oil production. The removal of PMS
subsidy is anticipated to expand the fiscal space, providing an
additional impetus for growth. Nevertheless, global economic
uncertainties, domestic security, hawkish monetary policy stance,
and heightened debt service obligations could constitute downside
risks to the growth outlook.
Inflationary pressures remain in 2023 but are expected to
moderate in the short-term. Tight monetary policy measures,
tapering base effect, and the waning impact of the hike in PMS price
are expected to dampen inflationary pressure in 2024. The impact of

66 | P a g e Central Bank of Nigeria Economic Report
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climate change on agricultural output and heightening insecurity,
however, remain considerable risks to inflation.
The external position of Nigeria is expected to remain
optimistic, driven by expected upswing in domestic crude oil
production and favourable crude oil prices. The gains from
capital flows and remittances, on the back of continued
implementation of policy reforms in the sector would support the
positive outlook for external reserves. Nonetheless, the risk of capital
reversals could be heightened by a sustained high interest rate
environment in advanced economies and escalating geopolitical
tension.