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CENTRAL BANK OF NIGERIA
ECONOMIC REPORT


Third Quarter

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ABOUT THE REPORT

The Central Bank of Nigeria (CBN) Economic Report presents
economic developments in Nigeria, 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;
monetary & financial; and the external sectors of the Nigerian
economy, as well as, on global issues 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
the private sectors, and the public. Free download of the Report,
including current and past issues is available on 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.


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Contents


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Tables
Table 2: Indices of Average World Prices of Nigeria’s Major Agricultural Export
Commodities in US$ for Third Quarter 2023, Jan.
Table 4: Composite, Industry, Services and Agriculture Purchasing Managers’ Index..17
Table 5: Federally Collected Revenue and Distribution to the Three-Tiers of

Figures
Figure 33: Volume and Value of Traded Securities on the Nigerian Exchange Limited .46


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Figure 41: Foreign Exchange Transactions through the Economy (US$ Million) in the
Figure 42: Turnover in the Nigerian Autonomous Foreign Exchange Market


1 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
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EXECUTIVE SUMMARY
The Global economic activities lost steam in Q32023, compared with
the momentum in the preceding quarter. This was echoed in the JP
Morgan Global Composite Purchasing Managers’ Index (PMI), which
slowed to 50.9 index points, compared with the 53.8 index points in
the preceding quarter. Interest rate hikes and higher input costs
constrained economic activities in Advanced Economies (AEs). For
Emerging Market and Developing Economies (EMDEs), subdued
demand, partly, accounted for lower output. Consumer prices in most
AEs moderated due to a combination of tight policy stance and
decreasing energy costs, while the trend was mixed in the EMDEs.
The global bond market rebounded with higher yields, following
central banks' rate hikes. Global crude oil spot prices increased,
stemming from the extension of the voluntary cuts in crude oil
production by Saudi Arabia and Russia. The average spot price of
Nigeria’s reference crude oil, Bonny Light (34.9° API), increased by
12.7 per cent to US$89.90 per barrel (pb), compared with the
US$79.78 pb in the preceding quarter. Similar trends were also
observed in the prices of Brent (US$87.13 pb), Forcados (US$90.08
pb), WTI (US$83.61 pb), and the OPEC Reference Basket
(US$87.64 pb).
Economic activities in the domestic economy decelerated, majorly,
driven by higher energy costs and other input costs as the impacts
of on going reforms bitten. Consequently the PMI contracted to 45.5
index points from 50.4 index points in Q22023. Headline inflation
rose to 26.72 per cent, from 22.79 per cent in Q22023, due to shocks
from global and domestic sources. Core inflation (headline less farmproduce and energy) and food inflation trended in the same direction,
rising to 21.84 and 30.64 per cent, from 20.27 and 29.34 per cent,
respectively. Domestic crude oil production increased by 5.23 per
cent, reaching 1.21 million barrels per day (mbpd), compared with
the 1.15 mbpd in the preceding quarter. The upturn was attributed to
the resumption of loadings from the Forcados export terminal, and
the enhanced surveillance of oil infrastructure in the producing
regions.
The fiscal operations of the Federal Government of Nigeria (FGN)
resulted in a contraction of the overall deficit. Provisional data
indicated that fiscal deficit of the FGN, at N2,347.16 billion, narrowed
by 11.9 and 12.9 per cent in Q32023, relative to the level in Q22023
and the programme target, respectively. Gross Federation earnings
increased, driven, primarily, by more revenue from non-oil sources,
surpassing Q22023 levels by 50.1 per cent, but below the budget
benchmark by 9.5 per cent. The enhanced position in non-oil
earnings was attributed to higher receipts from Company Income

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Tax (CIT), Customs & Excise Duties, Value-Added Tax (VAT),
Production Sharing Contract (PSC), and the 2023 interim dividend
declaration by the Nigerian National Petroleum Company Limited
(NNPCL). The provisional expenditure of the FGN declined by 26.0
per cent due primarily to reduced debt service.
The Banking system remained safe, and sound, as shown by the
various financial soundness indicators. Broad money supply (M3)
expanded by 28.76 per cent (annualized at 38.35%), owing in part to
the Bank’s efforts at boosting lending to the private sector. Lending
rates increased marginally, and liquidity moderated in the short end
of the market, relative to the preceding quarter. The Nigerian
Exchange (NGX) Limited experience was bullish, fuelled by positive
sentiments stemming from favourable corporate earnings and an
uptick in new listings.

Foreign capital inflow expanded, driven by direct equities investment,
and upsurge in the demand for Federal Government bonds. The
external reserves, at US$32.79 billion covers 6.3 months of imports
for goods and services or 8.7 months for goods only, well above the
3-months standard benchmark for import cover. The average
exchange rate of the naira against the US dollar at the Nigerian
Autonomous Foreign Exchange Market (NAFEM) was ₦764.82/US$,
compared with ₦511.23/US$ in Q22023.


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1.0
GLOBAL ECONOMIC DEVELOPMENTS
The global economic activities slowed in Q32023, as indicated in
composite global PMI. The manufacturing sector constituted the
main drag on the global economy. Tight monetary policy stance,
amid inflationary pressures, constrained the pace of economic
activities in Advanced Economies (AEs), while sluggish demand
affected the performance in the Emerging Market and Developing
Economies (EMDEs). The moderation in consumer prices across
most AEs continued, occasioned by the tight monetary policy stance,
and declining energy prices. Trends in inflationary pressures were
mixed in EMDEs as inflation moderated in some countries, while
others experienced heightened inflation. Higher interest rates drove
government bond yields and weakened the performance of global
stock markets. With respect to policy stance, most AEs increased
policy rates in order to rein-in inflation, while some EMDEs took
actions to boost economic growth.
1.1
Global Economic Activity
Global economic activities slowed in the third quarter of 2023,
attributed, partly, to the lull in manufacturing. The average global
composite Purchasing Managers’ Index (PMI) fell to 50.90 index
points from 53.77 index points in Q22023, due to constrained
business optimism and higher input costs. Manufacturing production
remained the main drag on economic activity, further contracting to
48.90 index points from 49.53 index points, due to deteriorations in
the intermediate and investment goods industries. The services
sector also slowed to 51.53 index points from 54.97 index points, due
to weaker performance of business and consumer services. All
seven sub-indices comprising the services PMI (new business, new
export business, future activity, employment, outstanding business,
input prices, and prices charged) declined in the quarter.


Summary
Global
Economic
Activity

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Table 1: Global Purchasing Managers’ Index (PMI)
Source:JP Morgan
Tight monetary policy stance amid inflationary pressures,
constrained the pace of economic activities in most Advanced
Economies. Majority of the AEs experience declines in output levels
in Q32023. In the US, PMI declined to 50.80 index points, from 53.63
index points in the preceding quarter, due to high interest rates. The
decline occurred in both the services and manufacturing sectors. In
Canada, economic activities also contracted on account of higher
interest rates, and uncertain business climate., In addition to higher
interest rates in Europe, increased input costs and lower consumer
demand also contributed to the downticks in output during the
quarter. Consequently, the PMI contracted to 45.47, 46.50, 48.77
and 49.30 index points in France, Germany, Italy, and UK,
respectively. In Japan, PMI declined to 52.30 index points, majorly,
driven by the deterioration in the manufacturing sector.


Q12023
Q22023
Q32023
Composite
51.73
53.77
50.90
Employment Level
51.30
52.07
51.00
New Business Orders
51.23
53.10
50.03
New Export Business Orders
48.37
48.80
47.93
Future Output
64.33
64.17
61.93
Input Prices
59.80
57.40
57.03
Output Prices
55.07
54.27
53.57


Manufacturing
49.53
49.53
48.90
Services (Business Activity)
52.33
54.97
51.53
New Business
52.13
54.67
50.73
New Export Business
50.20
52.77
50.73
Future Activity
65.00
65.27
62.50
Employment
51.57
52.77
51.30
Outstanding Business
50.33
50.57
48.47
Input Prices
61.40
60.07
59.23
Prices Charged
55.37
55.73
54.63
Economic
activity in
Advanced
Economies

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Figure 1: PMIs of Selected Advanced Economies

Source: Trading Economics/Various countries’ websites


Economic activities in most Emerging Market and Developing
Economies were hindered by sluggish demand. In China, PMI
declined to 51.47 index points compared with the 53.20 index points
in the preceding quarter, due to weak demand (domestic and export),
and decline in the real estate sector activities. Output contracted in
Turkey because of the slowdown in new orders and rising input
costs. The PMI contracted to 49.50 index points in Q32023,
compared with the 51.50 index points in the preceding quarter.
Similarly, PMI in Brazil contracted to 49.73 index points from 51.87
index points in the preceding quarter. The contraction was attributed,
mainly, to dwindling demand that led to a decline in new orders in
both the manufacturing and services sectors. In Russia, economic
activities slowed to 54.63 index points, as against the 55.1 index
points in Q22023, on account of heightened price pressures amid
softer upturns in the manufacturing and service sectors. Conversely,
rising demand and lower input costs spurred economic activities in
India, Indonesia, Mexico, and South Africa.


UNITED
STATES
UNITED
KINGDOM
GERMANY
ITALY
JAPAN
CANADA
SPAIN
FRANCE
Q12023
Q22023
Q32023
50-point Threshold

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Figure 2: PMI in Selected EMDEs

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

1.2 Global Inflation
The moderation in consumer prices across most AEs was
continued in Q32023, occasioned by the tight monetary policy
stance and declining energy prices. The combined effects of
sustained monetary policy tightening, and lower energy costs,
moderated global inflation in Q32023. In the US, inflation declined
to 3.53 per cent in Q32023 from 3.97 per cent in the preceding
quarter. Inflation also moderated in the euro area, as inflation in
Spain, France, Germany, and Italy fell to 2.80, 4.70, 5.60 and 5.57
per cent, respectively, from 3.07, 4.70, 6.57 and 7.40 per cent in
Q22023, largely, due to slowdown in both energy and food prices.
Consumer prices also receded in the United Kingdom (UK) to 6.73
per cent, from 8.43 per cent in Q22023, due to a fall in energy and
accommodation costs. In Japan, falling prices of fuel, electricity, and
water moderated inflationary pressures. Conversely, higher transport
costs (as gasoline prices increased) in Canada, pushed the inflation
to 3.70 per cent, from 3.53 per cent in the preceding quarter.


Q12023
Q22023
Q32023
50-point Threshold
Advanced
Economies

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Figure 3: Inflation in Selected Advanced Economies,
Average in Per cent

Source: Trading Economics
Inflationary pressures in EMDEs were mixed in the review
period Consumer prices in Indonesia declined to 2.88 per cent (the
lowest since Q12022), from 3.95 per cent in the preceding quarter.
The rate hikes by the Bank of Mexico helped reduce inflation to 4.63
per cent (the lowest level since Q12021), from 5.72 per cent in
Q22023. In South Africa, the inflation declined to 4.97 per cent from
6.17 per cent in Q22023, attributed, mainly, to lower transport and
food prices. Deflationary pressures in China, persisted as the
inflation stood at -0.07 per cent at end-September 2023, in contrast
to the 0.10 per cent in Q22023.
In India, El Nino adversely impacted agricultural production causing
food prices to rise. Consequently, inflation rose to 6.43 per cent,
from 4.59 per cent in Q22023. Increase in tax rates, rising food prices
and the depreciation of lira heightened inflationary pressures in
Turkey, as consumer prices rose to 56.08 per cent from 40.50 per
cent in the preceding quarter.

United
States
United
Kingdom
Japan
Canada
Germany
France
Italy
Spain
Q12023
Q22023
Q32023

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Figure 4: Inflation in Selected EMDEs in Per cent
Source: Organisation for Economic Co-operation and Development (OECD), Trading Economics


1.3
Global Financial Markets
1.3.1 Global Financial Conditions
Tight financial conditions increased bond yields, and weakened
global equity markets. In the equities market, the value of shares
declined in both advanced and emerging market economies. The US
NASDAQ, Dow Jones, and S&P fell by 3.30, 2.90, and 2.10 per cent,
respectively, from the levels in the preceding quarter. The rising
policy rates, high crude oil prices, and the fear of potential
government shutdown in the US, created negative sentiments in the
capital market that led to the decline in stock values. The losses in
technology and base metal stocks contributed, majorly, to the decline
of the Canada TSX by 3.03 per cent. Most European markets also
recorded declines as the EURO STOXX decreased by 5.01 per cent,
due, mainly, to the tight monetary stance by the ECB. In Japan, stock
market performance was mixed, as the NIKKEI 225 declined by 4.01
per cent, while the TOPIX increased by 1.52 per cent.
The UK equities rose in the third quarter of 2023, driven, by the
performance of energy and basic materials, which benefited from a
weak sterling relative to the US dollar. The increasing consumer
confidence and relatively stable interest rates also contributed to the

China
India
Turkey
South
Africa
Indonesia
Mexico
Brazil
Russia
Q12023
Q22023
Q32023

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performance of UK stocks. Consequently, the FTSE 100 rose by 1.02
per cent compared with the level in the preceding quarter.
The performance of emerging markets’ equities in Q32023 was
mixed. Concerns about the sustained high interest rates in the US,
and weakness in the real estate sector in China, weighed negatively
on investor confidence. Despite the various policy stimuli in China,
economic recovery remained fragile. Consequently, the Shanghai
SE fell by 2.86 per cent in Q32023. Losses in base metal stocks led
the decline in the South African JALSH, which fell by 4.79 per cent.
The BOVA11 in Brazil fell by 1.47 per cent, while the Turkish XU100
fell by 0.66 per cent. The depreciation of the lira was a major reason
behind the underperformance of the Turkish equities in the quarter.
On the flip side, equities in Russia, India, and Indonesia posted
positive returns. The Russian MOEX RX rose by 12.08 per cent,
driven, by energy and metal segments. Positive macroeconomic
data drove the Indian BSE and the Indonesian JCI as they increased
by 1.71 and 1.37 per cent, respectively.
Figure 5: Change in Key Global Stock Indices in Per cent

Source: Reuters Refinitiv Eikon & Trading Economics

Activities in the global bonds market increased, as most central
banks hike policy rates. The 10-year Government bond yields in
the US increased to 4.57 per cent compared with the level in the

US - S&P 500
US - Dow Jones
US - Nasdaq-100
UK - FTSE100
Japan - NIKKEI 225
Japan - TOPIX
Canada - TSX
Euro Area - EUROSTOCKS 50
Germany - DAX
France - CAC 40
Italy - FTSEMIB Index
Spain - IBEX Index
Brazil - BOVA11 BZ Equity
Russia - MOEX RX
India - BSE IN
China - shangai se
South Africa - JALSH
Mexico - MEXBOL Index
Indonesia - JCI Index
Turkey - XU100
Per cent (%)
Percent change (Q2 2023)
Percent change (Q3 2023)

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preceding quarter. The higher yield was driven, by policy rate hikes
by the Fed, and the expectations about increased deficit spending.
As expected, movements in US bond yields had spillover effects in
the global bond market.
Consequently, government bond yields in selected AEs also
increased in the review quarter, with yields in Italy, Spain, France,
and Germany rising to 4.80, 3.95, 3.44, and 2.85 per cent,
respectively. On average, the euro area bond yields rose to 2.84 per
cent, induced partly by ECB rate hikes and the spillover effect from
US Fed policy.
Government bond yields in most EMDEs also rose in the review
quarter. Government bond yields in Brazil increased to 11.77 per
cent, as the central bank raised its policy rate by 300 basis points in
Q32023, to tame rising inflation. Hawkish monetary policy stance
also contributed to rising bond yields in Turkey, Russia, South Africa,
Mexico, India, and Indonesia to 15.47, 12.93, 10.81, 9.92, 7.21, and
6.91 per cent, respectively. Similarly, China bond yields rose to 2.71
per cent as the country’s economic recovery boosted inflation
expectations.
Figure 6: 10-year Government Bond Yields for Selected Countries in
Per cent

Source: Reuters Refinitiv Eikon

Brazil
Russia
India
China
South
Africa
Mexico Indonesia Turkey
United
States
United
Kingdom
Japan
Canada
Euro
Area
Germany France
Italy
Spain
Emerging and Developing Economies
Advanced Economies
Jul-23
Aug-23
Sep-23

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Most emerging market currencies depreciated against the US
dollar during the review quarter. The Russian ruble and Chinese
RMB depreciated by 11.7 and 5.0 per cent, respectively, relative to
the levels in the preceding quarter. The depreciation of the Russian
ruble was due to increased net outflow of foreign currencies, while
the depreciation in the Chinese RMB was a deliberate strategy by
the People’s Bank of China to boost competitiveness and exports.
The South African rand, however, appreciated marginally by 0.3 per
cent due to expectations of interest rate cut by the monetary
authority.
1.4
Global Commodity Market Developments
Total world crude oil supply decreased marginally in Q32023, as
the Saudi Arabia and Russia, extended their voluntary
production cuts.
World crude oil supply decreased by 0.1 per cent to 101.18 million
barrels per day (mbpd) in Q32023, compared with 101.31 mbpd in
the preceding quarter. The decline was, largely, due to a decrease
in OPEC crude oil supply. OPEC’s supply fell by 2.85 per cent to
32.73 mbpd from 33.69 mbpd in the preceding quarter, driven, by the
extension of Saudi Arabia’s voluntary production cut of 1.00 mbpd
until Q42023. In addition, Russia extended voluntarily cuts by an
additional 300,000 bpd in August 2023 until the end of this year. NonOPEC supply rose slightly by 1.21 per cent to 68.44 mbpd in
Q32023, compared with the 67.62mbpd in the preceding quarter,
due to increased supply of about 200,000 bpd from Venezuela.
The total world demand, however, rose slightly by 0.7 per cent to
101.44 mbpd in Q32023, compared with the 100.77 mbpd in the
preceding quarter. The marginal increase was attributed to the
gradual rebound in economic activities, especially, in OECD
countries and Japan.
World Crude Supply
and Demand

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Global crude oil spot prices rose in the review quarter as
demand increased, amid fall in supply. The average spot price of
Nigeria’s reference crude oil, the Bonny Light (34.9° API), rose by
12.7 per cent to US$89.90 per barrel (pb) in Q32023, from US$79.78
pb in the preceding quarter. The prices of Brent (US$87.13 pb),
Forcados (US$90.08 pb), WTI (US$83.61 pb) and OPEC Reference
Basket (US$87.64 pb), all exhibited similar trends as the Bonny
Light. The increase in crude oil prices was, largely, due to increased
demand, particularly, in OECD countries and Japan, in the face of
voluntary production cuts.
Figure 7: Quarterly Crude Oil Prices (US$ per barrel)


Source: Refinitiv Eikon (Reuters)
The all-commodity price index increased on account of
improved demand, amid supply constraints. The average price
index for all monitored commodities increased by 1.2 per cent to
127.2 index points in Q32023, from 125.6 index points in the
preceding quarter. Adverse weather and logistic hiccups led to lower
supply of cocoa, groundnut, cotton, soya beans and coffee, resulting
in their price increase by 15.9, 12.1, 1.9, 1.9, and 1.5 per cent,
respectively. The prices of wheat, palm oil, and rubber, however, fell
by 10.6, 6.8, and 0.4 per cent, respectively, arising from ample supply
in key producing regions.

Q1 2022
Q2 2022
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Bonny Light
Brent
Forcados
WTI
Opec Basket
Agricultural
Commodity Prices
Crude Oil
Prices

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Table 2: Indices of Average World Prices of Nigeria’s Major Agricultural
Export Commodities in US$ for Third Quarter 2023,
Jan. 2010=100
COMMODITY
Q32022/1
Q22023/1
Q32023/2
% Change
(1) & (3)
(2) & (3)

All Commodities

Cocoa

Cotton

Coffee

Wheat

Rubber

Groundnut

Palm Oil

Soya Beans

Sources: World Bank Pink Sheet and Staff Estimates; /1 and /2 denote
actual and provisional, respectively.


Average spot prices of gold, silver, platinum and palladium
dropped as demand for the precious metals fell, due to a
stronger US dollar and higher bond yields. The average spot
prices of gold and silver fell by 2.6 per cent apiece, to sell at
US$1,926.31 per ounce and US$23.56 per ounce from US$1,976.75
per ounce and US$24.19 per ounce, respectively, in the preceding
quarter. The prices of platinum and palladium, also declined by 9.3
and 13.2 per cent, to sell at US$927.49 per ounce and US$1,249.71
per ounce from US$1,022.71 per ounce and US$1,439.98 per ounce
in the preceding quarter.


Other Mineral
Commodity
Prices

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Figure 8: Price Changes in Selected Metals in Per cent for
Q32023

Source: Refinitiv Eikon (Reuters)

1.5 Monetary Policy Stance
Central banks around the world took different monetary policy
stance, with a noticeable split in approach between advanced
and
emerging
economies.
While
advanced
economies,
particularly the United States and the euro area, raised policy
rates to combat rising inflation, major emerging economies like
China and Brazil were more concerned with boosting economic
growth. In the US, the Fed raised the policy rate from 5.25 per cent
at end-June 2023 to 5.50 per cent at end-September 2023. Similarly,
the ECB raised its policy rate to 4.50 per cent, from 4.00 in the same
periods. The UK raised its bank rate to 5.25 per cent at endSeptember 2023, while the Bank of Japan (BOJ) retained its policy
rate at -0.10 per cent in the bid to reflate the economy.
Emerging market economies displayed mixed reactions in their
policy rates. China cut its rates from 3.55 per cent to 3.45 per cent at
end-September 2023 to boost credit supply and stimulate economic
growth. Similarly, Brazil reduced its rate to 12.75 per cent from 13.75
per cent at end-September 2023, following the reductions in
consumer inflation. Meanwhile, the Bank of Mexico and the Reserve

Gold
Silver
Platinum
Palladium
With corresponding quarter
With preceding quarter

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Bank of India held policy rates at 11.25 and 6.50 per cent,
respectively. Similarly, South Africa’s Reserve Bank held rates at
8.25 per cent in the continuation to anchor expectations. Indonesia
raised rates to 6.00 per cent from 5.75 per cent to shore-up the
rupiah. The Central Bank of Turkey increased its engagement
against inflation, raising the policy rate to 30.00 per cent at endSeptember 2023, from 15.00 and the end of the second quarter.
Table 3: Central Bank Policy Rates in Per cent
Country
End-March
End-June
End-September
United States
4.75-5.0
5.0-5.25
5.25-5.50
Canada
4.50
4.75
5.0
Euro Area
3.50
4.0
4.50
United Kingdom
4.25
4.50
5.25
Japan
-0.10
-0.10
-0.10
Brazil
13.75
13.75
12.75
Russia
7.50
7.50
13.0
India
6.50
6.50
6.50
China
3.65
3.55
3.45
South Africa
8.25
8.25
8.25
Mexico
11.25
11.25
11.25
Indonesia
5.75
5.75
6.0
Turkey
8.50

Kenya
9.50
10.5
10.5
Ghana
29.50
29.50
30.0
Source: Various Central Banks’ websites, Trading Economics.


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2.0 DOMESTIC ECONOMIC DEVELOPMENTS
2.1 Real Sector Developments
Broad-based decline in business activities was observed as the
Purchasing Managers Index contracted to 45.5 index points in the
third quarter of 2023, from 50.4 index points in Q22023, owing to
higher costs pressures, and weak demand, amidst soaring energy
and other input costs. Headline inflation remained, largely, elevated,
rising to 26.72 per cent in Q32023, from 22.79 per cent in Q22023.
Higher inflation was on account of persisting cost push factors that
accompanied higher energy and food prices, lingering security
challenges and infrastructural deficits, as well as expectations of
further rise in prices.

2.1.1 Business Activities
Business activities contracted in Q32023, amid growing
investors’ pessimism. Business activities slowed, as Composite
PMI contracted to 45.5 index points in Q32023, as against the 50.4
index points in Q22023, mainly, on account of weaker performance
of manufacturing sector in the quarter. Further analysis from the
sectors revealed that the services sector PMI contracted to 46.7
index points in September 2023, from 49.0 index points in June 2023.
This was reflected in sub-sectors such as Arts, Entertainment &
Recreation; Health care & social assistance; Information &
communication; Real estate rental & leasing, amongst others.
Similarly, the industry sector PMI narrowed to 42.8 index points,
compared with 50.3 index points in the preceding quarter, following
the fall in new orders and employment level that resulted in lower
production. The agriculture PMI also point to the decline in activities
following rising cost of farm inputs and decreased farming activities,
due to security challenges. The sector’s PMI contracted to 45.1 index
points, from 52.9 index points in June 2023.


Summary
Business Activities

17 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Figure 9: Composite and Sectors PMI

Source: Central Bank of Nigeria

Table 4: Composite, Industry, Services and Agriculture Purchasing
Managers' Index
Components
June - 23
September-23
Composite PMI
50.4
45.5
Industry Sector PMI
50.3
42.8
Production Level
51.2
44.1
New Orders
48.1
38.1
Supplier Delivery Time
52.9
44.8
Employment Level
49.9
46.8
Raw Material Inventory
52.3
42.5
Services Sector PMI
49.0
46.7
Business Activity
49.1
43.0
New Orders
47.1
44.1
Employment Level
50.2
50.1
Inventory
49.7
49.6
Agricultural Sector PMI
52.9
45.1
Farm Yield/Output
53.8
41.9
New Orders
51.1
41.9
Employment Level
47.7
43.8
Inventories
52.5
50.7
General Farming Activities
59.4
47.1
Source: Central Bank of Nigeria
Following the slowdown in business activities within Q32023, firms
expressed deeper pessimism in the overall macroeconomy with the
business confidence index of -24.5 index points in September 2023,

Composite PMI
Services Sector
Industry Sector
Agriculture Sector
June- 23 index
Sept - 23 index
Threshold

18 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
compared with -1.8 index point in June 2023. This reflected low
business confidence in the overall economy, driven, majorly by
opinions from Agriculture and Service sectors, following rising cost
pressures. Persisting security, inadequate power supply, and high
interest rate challenges dominated concerns expressed by
businesses during the quarter.
Figure 10: Business Confidence Index

Source: Central Bank of Nigeria

2.1.2 Consumer Prices
Headline inflation increased in Q32023, due to persisting
shocks from global and domestic sources. The price pressure
from the global economy was amplified by the Russia- Ukraine war,
which led to the rise in energy and food prices. Higher import prices,
arising from elevated global inflation, and exchange rate
passthrough also impacted domestic prices. The domestic factors
were mainly cost-push, driven by the effect of the reforms in the
downstream sector of the petroleum industry, which led to a 226.8
per cent increase in the average pump price of PMS to ₦626.21 per
litre in September 2023, from ₦191.65 per litre, in the corresponding


Overall Business
Confidence Index (CI)
Services Sector CI
Manufacturing Sector
CI
Agriculture Sector CI
June- 23 index
Sept - 23 index
Threshold
Headline
Inflation

19 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
period of 2022. The transition to a market-determined exchange rate
also introduced some shocks to domestic prices. In addition, other
factors such as security challenges, and protracted infrastructural
deficits, as well as expectations of further rise in prices, contributed
to inflationary pressures. Consequently, headline inflation (year-onyear) rose to 26.72 per cent in Q32023 from 22.79 per cent in
Q22023.
Figure 11: Headline, Food and Core Inflation (year-on-year)
in Per cent

Source: National Bureau of Statistics
A deep dive into inflation pervasiveness, suggest that although , inflation
was broad-based across different components. Recent evidence showed
that inflation was less pervasive in September 2023, as 71.6 per cent of the
items in the CPI basket were above the historical average of 13.10 per cent
(1996-2023), compared with the 73.13 per cent in August 2023, and 91.04
per cent at end-December 2022.


Percent (%)
Headline
Core
Food
COVID-19
Russia-Ukraine
War
PMS subsidy
removal,
Rate
unification
Inflation
Pervasiveness

20 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Figure 12: Inflation Pervasiveness1

Source: National Bureau of Statistics & Central Bank of Nigeria
Core inflation, on a year-on-year basis rose to 21.84 per cent in
Q22023, from 20.27 per cent in the preceding quarter, due, to higher
import costs, and other structural factors such as insecurity and
infrastructural deficit. Expectations of a further rise in prices also
contributed to the uptick in core inflation.
Figure 13: Component Drivers of Core Inflation

Source: National Bureau of Statistics

1 Pervasiveness is measured by the number of headline CPI items that are within specific inflation range. It reflects the extent
to which rising prices are affecting the cost of living. Historically, inflation in Nigeria has been high, with average inflation of
13.10 per cent from 1996–2023. Inflation is said to be more pervasive if there is a higher number of items registering inflation
above the historical average. The CPI items are therfore categorised into four groups namely; percentage of items registering
inflation of less than 4.99 per cent, between 5 per cent and 9.99 per cent, between 10 per cent and 13.10 per cent, and also
inflation above 13.10 per cent.

Per cent
< 4.99%
5-9.99%
10-13.10%
> 13.10%
Historical Average (1996-2023): 13.10
Annual
Monthly

2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
2022Q2
2022Q3
2022Q4
2023Q1
2023Q2
2023Q3
Percentage points
Processed Food
Non-Alcoholic Beverages
Alcoholic Bev. Tobacco & Kola
Clothing & footwear
Housing,Water, Elect.Gas & Other Fuel
Furnishings, Household Equip &HH Maint.
Health
Transport
Communication
Recreation & culture
Education
Restaurant & Hotels
Miscellaneous Goods & Services
Core Inflation
Core
Inflation

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ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Further analysis of the drivers of core inflation revealed that
Processed food contribute 10.52 percentage points, Housing, Water,
Elect. Gas & Other Fuel (3.64 percentage points), Clothing &
footwear (2.05 percentage points), Transport (1.63 percentage
points) and Education (1.27 percentage points) accounted for the
uptick in core inflation in Q32023, compared with 8.85, 3.73, 2.03,
1.68 and 1.29 percentage points, respectively, in Q22023.
Figure 14: Measures of Underlying Inflation2

Source: National Bureau of Statistics & Central Bank of Nigeria

The trimmed mean and trimmed median slightly moderated, relative
to the core inflation in Q32023, indicating slower pace in underlying
inflation.
Food inflation (year-on-year), increased to 30.64 per cent in Q32023,
from 29.34 per cent in the preceding quarter, largely on account of
the ripple effects of PMS subsidy removal, which increased
transportation, logistics and other input costs. The average transport
fare for bus journeys, between cities increased by 130.74 per cent to

2 Core inflation: defined as headline less farm produce less energy prices.
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.

Core inflation
Trimmed Median
Trimmed Mean
Food
Inflation

22 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
₦2,643 in September 2023, compared with ₦1,141.43 in the
corresponding period of 2022.
Figure 15: Contribution of Processed food and farm produce to food
Inflation
Source: National Bureau of Statistics
The processed food component remained the major driver of food
inflation. This was due to the persisting high energy cost, driven by
the PMS subsidy removal, and elevated retail price of diesel at
₦890.80 per litre in September 2023 from ₦789.90 per litre in the
corresponding period of 2022.
Figure 16: Component Drivers of Food Inflation

Source: National Bureau of Statistics

2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 2023Q1 2023Q2 2023Q3
Percentage points
Processed food
Farm produce
Food Inflation rate

2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 2022Q1 2022Q2 2022Q3
Per cent
Percentage points
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
Rice (Local & Imported)
Sorghum (Guinea Corn) White or Brown,Sold Loose
Food Inflation

23 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Analysis of food inflation by components showed that in Q32023,
Garri accounted for 6.92 percentage points (pp); Meat, Fish & Egg
(5.45 pp); Yam, Potatoes & other Tubers (3.91 pp); Fruits &
Vegetables (2.74 pp); Rice (2.12 pp); and Oil & Fats (2.04 pp),
compared with Q22023 which had Meat, fish & egg at (4.56 pp); Yam,
Potatoes & other Tubers (3.03 pp); Garri (2.85 pp); Fruits &
Vegetables (2.67 pp); Rice (2.42 pp); and Oil & Fats (1.75 pp).


Box 1: Prices of Selected Domestic Agricultural Commodities (N)
The average prices of all the monitored farm produce increased in Q32023, relative
to their levels in the preceding quarter. The increase ranged from 8.4 per cent for
beans (brown, black eye) to 66.1 per cent for maize (white). This development was
driven, largely, by structural factors such as the fuel subsidy removal, insecurity, and
the activities of middlemen, as well as the effect of climate change which resulted
in late rainfall.


Q32022*
Q22023*
Q32023**
% 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 Estimates,
* and ** denote actual and provisional, respectively.


24 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
2.1.3 Energy
2.1.3.1 Electricity
The estimated average electricity generation in Q32023 at 3,895.76
MW/h, decreased by 4.1 per cent from 4,058.93 MW/h in the
preceding quarter. The average estimated electricity consumption
at 3,689.7 MW/h, increased by 2.5 per cent in Q32023, relative to
3,601.4 MW/h in the preceding quarter. The increase was attributed
to improvement in transmission and distribution infrastructures.
2.1.3.2 Crude Oil
Domestic crude oil production rose following the resumption of
loadings from the Forcados export terminal, and improved
surveillance of oil infrastructure in the oil producing regions.
Nigeria’s average crude oil production rose by 5.23 per cent to 1.21
mbpd from 1.15 mbpd in the preceding quarter. The rise was due,
mainly, to the improved surveillance of oil infrastructure helped to
increase production from Bonny, Erha, Okoro, Otakpipo, Yoho, Sea
Eagle and Nembe streams. Nigeria’s production level, however, was
lower than its OPEC quota of 1.742 mbpd, by 532,000 bpd in
Q32023.
2.1.4 Socio Economic Developments
To enhance connectivity, foster economic development and reduce
travel time between the Southern and Northern parts of the country,
the Federal Government approved a 470-kilometre Abuja-Lagos
Greenfield superhighway, to be built by a private sector consortium
at no cost to the Government. The consortium would operate the
facility on a build, operate and transfer basis. The considered travel
time upon completion of the road for vehicles plying the route at 100
kilometres per hour would be 4 hours, 30 minutes from Lagos to
Abuja.
The Federal Government opened discussions with Hitech
Construction Company Ltd on the proposed Lagos-Calabar Coastal

Electricity
Generation and
Consumption
Crude Oil Production
and Export
Transportation

25 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Highway. The project which is a Public Private Partnership and to be
tolled upon completion, would boost interconnectivity to link the
entire nation. The highway would link the Lagos-Badagry Express
Superhighway, connect the proposed Fourth Mainland Bridge to
Lekki Deep Sea Port and link Ogoja-Ikom to connect five points in
Northern Nigeria.
In an effort to cushion the effects of the removal of subsidy on PMS,
the Infrastructure Bank of Nigeria set aside ₦13.00 billion for road
infrastructure development and the conversion of vehicles to
Compressed Natural Gas (CNG) in collaboration with the Federal
Government.
In the telecommunications sector, the Nigerian Communications
Commission (NCC) approved the establishment of a Centre of
Excellence at Ahmadu Bello University, Zaria to strengthen capacity
building in the sector. The Centre would provide locally made
equipment and materials, thereby, providing training, upskilling, and
reskilling opportunities for students and staff of the academic
community.
The Federal Government, through the National Salaries, Wages and
Income Commission, approved the increment in salaries for
academic and non-academic staff of all its tertiary institutions. The
increment for junior staff of tertiary institutions was by 25.0 per cent,
while chief lecturers and professors would earn a 35.0 per cent
increment.
The National Talent Export Programme was launched to shore up
Nigeria’s foreign exchange earnings and create one million indemand jobs nationwide for five years. The initiative would position
Nigeria as an export hub for talent outsourcing in Africa, enhance
competitiveness, foster innovation, and drive sustainable growth
through trade in services.
Telecommunication
Social
Intervention
Education
Empowerment

26 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
2.2
Fiscal Sector Developments
The Federal Government fiscal space improved following a
contraction in the overall deficit, due to improved revenue
outturns and lower expenditure. Federally collected revenue in
Q32023, fell by 8.4 per cent, relative to the level in the preceding
quarter and was lower than the budget benchmark by 39.7 per
cent. Though, FGN retained revenue improved by 8.2 per cent,
compared with Q12023, it was below the quarterly target by 45.3
per cent. Provisional FGN expenditure dropped by 26.6 per cent,
relative to the level in Q12023, and fell short of the target by 23.5
per cent. Consequently, overall deficit contracted by 37.9 per
cent, relative to the preceding quarter.
2.2.1 Federation Account Operations
Federally collected revenue improved by 50.1 per cent relative to the
level in the preceding quarter, on account of higher non-oil receipts.
It was, however, below the target by 9.5 per cent. FGN retained
revenue also improved by 12.1 per cent, but was below the target by
38.7 per cent. Provisional FGN expenditure dropped by 3.2 per cent,
compared with the level in Q22023, and fell short of the target by
26.0 per cent. Consequently, the overall deficit contracted by 11.9
and 12.9 per cent, relative to Q22023 and the programme target,
respectively. At N87,379.40 billion, total public debt outstanding, at
end-June 2023, was 42.3 per cent of the GDP.
Gross Federation Account earnings improved, majorly on account of
increased earnings from non-oil sources. At N4,791.39 billion,
Federation Account receipt exceeded the level in Q22023 by 50.1
per cent but was below the benchmark by 9.5 per cent. The improved
performance reflected higher receipts from Company Income Tax
(CIT), Customs & Excise Duties and Value-Added Tax (VAT),
Production Sharing Contract (PSC), and the 2023 interim dividend
declaration by the Nigerian National Petroleum Company Limited
(NNPCL) (others1). Non-oil revenue continued to dominate
federation revenue, accounting for 83.0 per cent, while oil revenue
made up the balance of 17.0 per cent.
Driven by receipts from production sharing contract (PSC) and
dividends from NNPCL, oil revenue, at N814.23 billion, rose by 0.6
per cent above the level in the preceding quarter, but was below the
target of N2,410.89 billion by 66.2 per cent.
Summary
Drivers of Federation
Revenue

27 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Non-oil revenue, at N3,977.16 billion, was 66.9 per cent above the
level in the preceding quarter and exceeded the target by 38.0 per
cent, reflecting higher collections of CIT, Custom & Excise Duties,
and VAT. The increase in receipts were driven by improved economic
activities, seasonality in tax returns, particularly CIT; and improved
efficiency in tax administration.
Figure 17: Gross Revenue Outturn and Benchmark (N Billion)

Source: Central Bank of Nigeria Staff Estimates and Office of the Accountant General of the
Federation (OAGF)

Table 5: Federally Collected Revenue and Distribution to the
Three-Tiers of Government (N Billion)

Q32022
Q22023
Q32023
Budget*
Federation Revenue (Gross)

Oil

Crude Oil & Gas Exports

PPT & Royalties

Domestic Crude Oil/Gas Sales

Others 1

Non-oil

Corporate Tax

Customs & Excise Duties

Value-Added Tax (VAT)

Independent Revenue of Fed. Govt.

Others**

Total Deductions/Transfers***

Federally Collected Revenue
Less Deductions & Transfers***

plus:


Additional Revenue

Balance in Special Account from 2019

Excess Crude Revenue

Non-oil Excess Revenue

Exchange Gain

Total Distributed Balance

Q22023
Q32023
Budget
Oil
Non-Oil
Total Gross Revenue

28 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Federal Government

Statutory

VAT

State Government

Statutory

VAT

13% Derivation

Local Government

Statutory

VAT

Source: Office of the Accountant General of the Federation and CBN Staff Estimates

Note: 1/ includes non-regular oil receipts, including oil/gas dividends and profit, signature bonus, oil-related
recoveries *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 NonFederation revenue.

A net balance of N2,796.17 billion was distributed among the three
tiers of government, of which Federal, States and Local governments
received N1,058.00 billion, N920.49 billion and N677.53 billion,
respectively. The balance of N140.15 billion was transferred to the
13% Derivation Fund and allocated to oil-producing states. The
disbursement was 27.9 per cent above the level in Q22023 but was
14.5 per cent short of the target.
2.2.2 Fiscal Operations of the Federal Government
Provisional FGN retained revenue improved, largely, on
account of higher receipts from VAT Pool Account and
Exchange gain. At N1,693.02 billion, FGN retained revenue was
above collections in the preceding quarter by 12.1 per cent, but fell
short of the target of N2,761.28 by 38.7 per cent.


Federal
Government
Retained Revenue

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ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Table 6: FGN Retained Revenue (N Billion)


Q32022
Q22023
Q32023 Budget*
FGN Retained
Revenue
1,837.52 1,510.09 1,693.02 2,761.28
Federation Account
889.64
678.26
510.30 1,070.84
VAT Pool Account

FGN Independent
Revenue


Excess Oil Revenue

Excess Non-Oil

Exchange Gain

Others**


Source: Office of the Accountant General of the Federation
Note: ** Others include revenue from Special Accounts and Special
Levies.
* Based on 2023 Appropriation Act.
The figures are provisional


Provisional aggregate expenditure of the FGN declined, mainly,
due to lower debt service. At N4,040.18 billion, spending was
N135.17 billion or 3.2 per cent, below the level in the preceding
quarter and N1,416.6 billion or 26.0 per cent short of the target.
Recurrent expenditure, at 69.1 per cent continued to dominate FGN
spending, compared with the 25.8 and 5.1 per cent in capital outlay,
and transfers, respectively.


Federal
Government
Expenditure

30 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Figure 18: Federal Government Expenditure (N Billion)

Source: CBN Staff Estimates and OAGF
The fiscal operations of the FGN in Q32023 resulted in a
reduction of the overall deficit. Provisional fiscal deficit of the
FGN, at N2,347.16 billion, narrowed by 11.9 and 12.9 per cent,
relative to the level in Q22023 and the target, respectively. The
decline in the deficit was a result of a disproportionate fall in FGN
expenditure in the review quarter.
Table 7: Fiscal Balance (N Billion)

Q32022
Q22023
Q32023
Budget
Retained revenue

Aggregate
expenditure

Recurrent

Non-debt

Debt Service

Capital

Transfers

Primary balance

Overall balance

Source: Compiled from OAGF figures and CBN Staff Estimates
Note: The figures are provisional.


Q32022
Q22023
Q32023
Budget
Aggregate Expenditure
Recurrent
Capital
Transfers
Overall Fiscal
Balance

31 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
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Government borrowing in the review quarter remained
anchored on the Medium-Term Debt Strategy 2020-2023 (MTDS
2020- 2023). Total public debt outstanding stood at N87,379.40
billion or 38.7 per cent of GDP, at end-June 2023, and was 75.3 and
103.9 per cent , higher than the levels at end-March 2023, and at
end-June 2022 respectively. The increase was, largely, driven by the
exchange rate revaluation and FGN securitisation of Ways and
Means Advances. A breakdown of the consolidated public debt
showed that, domestic debt accounted for 61.9 per cent, while
external debt obligations constituted 38.1 per cent (The domesticexternal debt mix stipulated in the MTDS 2020-2023 is 70:30). Of the
consolidated public debt stock, FGN owed N81,563.72 billion
(93.3%3), while the State governments made up the balance of
N5,815.68 billion (6.7%).
A disaggregation of the total FGN debt obligations, shows that
domestic debt was N48,314.74 billion (59.2%), while external debt
accounted for N33,248.98 billion (40.8%). Further analysis revealed
that, FGN bonds, maintained dominance, accounting for 86.9 per
cent of the total domestic debt stock, followed by Treasury bills
(9.8%), Promissory notes (1.6%), and FGN Sukuk (1.5%), while
others4 (0.2%) constituted the balance. Of the total external debt
stock, Multilateral, Commercial and Bilateral loans accounted for
48.2, 36.2 and 12.8 per cent, respectively, while ‘other’ loans
constituted 2.8 per cent.
Debt service obligations in Q22023 declined by 39.8 per cent to
N748.69 billion, from N1,243.04 billion in Q12023. The decrease was
attributed to the redemption of maturing FGN bonds. Further
disaggregation indicated that domestic debt service accounted for

3 Includes the external debt of State governments, which are contingent liabilities of the Federal government.
4 Includes Treasury bonds (0.11 %), Green bond (0.03 %) and Special FGN Savings bond (0.06 %).

32 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
N565.88 billion (75.6%), while external debt service constituted
N182.80 billion (24.4%).
Figure 19: FGN External and Domestic Debt Composition (N Billion)

Source: Debt Management Office (DMO)


Figure 20: Composition of Domestic Debt Stock by Instrument in
Per cent

Source: Debt Management Office


Q32021 Q42021 Q12022 Q22022 Q32022 Q42022 Q12023 Q22023
External Debt
Domestic Debt
Total Debt
FGN Bonds
86.9%
Treasury Bills
9.8%
Promisory Notes
1.6%
FGN Sukuk
1.5%
Others
0.2%
FGN Bonds
Treasury Bills
Promisory Notes
FGN Sukuk
Others

33 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption


Figure 21: Composition of External Debt Stock by Instrument in
Per cent

Source: Debt Management Office


Multilateral
48.2%
Commercial
36.2%
Bilateral
12.8%
Others
2.8%
Multilateral
Commercial
Bilateral
Others

34 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
2.3 Monetary and Financial Developments
The Bank continued to supervise and implement prudential
guidelines to ensure the stability, and resilience of the financial
sector. Key monetary aggregates grew, driven by increased
credit expansion to key sectors of the economy. Trend in key
short-term interest rates were mixed, following fluctuations in
the banking system liquidity in the quarter. The bid-cover ratio
indicates that NTBs and FGN Bonds remained attractive. Key
capital market indicators show that transactions at the Nigerian
Exchange (NGX) Limited, were bullish, driven by positive
sentiments arising from the declaration of favourable corporate
earnings, and the uptick in new listings.

2.3.1 Monetary Developments
Increase in liabilities to other depository corporations (ODCs)
accounted for the growth in reserve money in Q32023. Relative
to end-December 2022, reserve money expanded by 21.7 per cent
to N19,506.56 billion, solely, driven by 28.6 per cent growth in
liabilities to ODCs. The rise in liabilities to ODCs was due to the 33.9
per cent increase in the amount of required reserve during the
quarter. Growth in reserve money was, however, moderated by
currency-in-circulation (CIC), which fell by 8.3 per cent to N2,761.29
billion. The stock of reserve money was 2.2 per cent below the
benchmark.

Figure 22: Reserve Money (N Billion) and Money Multiplier

Source: Central Bank of Nigeria


Dec. 22
Mar-23
Jun-23
Sep-23
Per cent
N Billions
Reserve Money
Currency-in-Circulation
Liabilities to ODCs
2023 Benchmark
Summary
Reserve Money

35 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Figure 23: Growth in Reserve Money over Preceding December
in Per cent

Source: Central Bank of Nigeria
As a component of CIC, the value of Nigeria’s central bank digital
currency expanded to N10.26 billion in Q32023 from N2.55 billion at
end-December 2022. This represents an increase of 302.4 per cent
which underscores the increased adoption of electronic payment
channels, especially, the eNaira. Physical notes and coins, however,
fell to N2,751.03 billion in Q32023 from N3,009.51 billion at endDecember 2022.

Figure 24: Composition of Currency-in-Circulation (N Billion)

Source: Central Bank of Nigeria

Per cent (%)
Reserve Money
CIC
Liabilities to ODCs


Sep 2022
Dec-22
Mar-23
Jun-23
Sep-23
N Billion
N Billion
Notes & Coins (RHS)
eNaira (LHS)

36 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
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Efficiencies in financial intermediation led to an increase in broad
money multiplier to 3.4 from 3.3 in December 2022. Consequently,
the broad money supply (M3) rose by 28.8 per cent to N67,184.68
billion, compared with its level at end-December 2022. On
annualised basis, M3 grew by 38.4 per cent or 10.2 percentage
points above the programme target, partly on account of the Bank’s
effort to encourage lending to the private sector.
On the asset side, domestic claims, which grew by 40.2 per cent,
was the sole driver of the growth in M3 contributing 51.0 percentage
points to that growth. Domestic claims grew on account of the 44.1
and 38.1 per cent increases in net claims on central government and
claims on other sectors, respectively. Net claims on central
government rose due to increased holdings of government securities
and loans granted by depository corporations. The growth in claims
on other sectors was driven by a 62.0, 41.3, 31.6 and 9.0 per cent
increases in claims on public non-financial corporations, claims on
private sector, claims on other financial corporations, and claims on
state and local government, respectively. Overall, net domestic asset
(NDA) grew by 37.8 per cent and contributed 35.0 percentage points
to the growth of M3, while net foreign assets (NFA) fell by 84.6 per
cent, moderating the growth by negative 6.2 percentage points.


Money Supply

37 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Table 8: Money and Credit Growth over preceding December in Per
cent

Sep-22
Dec-22
Mar-23
Jun-

Sep-

Contribution
to M3
growth (Sep23)
Annualise
d Growth
(Sep-23)

Benchmark
Net Foreign
Assets

Claims on Nonresidents


Liabilities to Nonresidents


Net Domestic
Assets

Domestic Claims

Net Claims on
Central
Government

Claims on Central
Government


Liabilities to Central
Government


Claims on Other
Sectors

Claims on Other
Financial
Corporations


Claims on State and
Local Government


Claims on Public
Nonfinancial
Corporations


Claims on Private
Sector


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)

Source: Central Bank of Nigeria

38 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
From the liability side, the growth in M3 was, majorly, driven by a
32.3 per cent rise in other deposits, which accounted for 19.2
percentage points. Transferable deposits, which recorded a growth
of 26.6 per cent, contributed 9.3 percentage points to the growth in
broad money supply. Securities other than shares grew by 30.2 per
cent, and contributed 0.7 percentage point to the growth in M3.
Currency outside depository corporations (CODCs), expectedly,
sustained its downward trajectory, declining by 8.5 per cent in the
review quarter, with greater adoption of electronic payment channels
as the cashless policy of the Bank continued to take root. Growth in
narrow money supply (M1), at 22.3 per cent (29.7% annualised),
remained within the programme target.
2.3.2 Sectoral Credit Utilisation
Total credit extended to key sectors of the economy by ODCs
increased by 4.3 per cent to N39,106.01 billion in Q32023, compared
with the N37,479.37 billion in the preceding quarter, reflecting efforts
to boost economic growth and create jobs. The growth was driven,
primarily, by the increased credit to the services and industry sectors
which expanded by 5.9 and 3.0 per cent, respectively. Credit to the
agricultural sector, however, declined marginally by 0.4 per cent. In
terms of share in total credit extended to key sectors during the
quarter, the services sector remained the dominant recipient,
accounting for 52.3 per cent. The industry sector followed closely
with 43.0 per cent, while agriculture accounted for the remaining 4.7
per cent.


Sectoral
Credit
Utilisation

39 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Table 9: Sectoral Credit Allocation
Source: Central Bank of Nigeria

Consumer credit outstanding increased, attributable to the need to
cope with relative increase in the cost of living. Thus, consumer credit
grew by 15.5 per cent to N3,046.38 billion, compared with
theN2,637.32 billion at the end of the preceding quarter. Analysis of
consumer credit by components revealed that personal loans
increased by 18.6 per cent to N2,279.41 billion, as against the
N1,922.18 billion in the preceding quarter, while retail loans, at
N766.97 billion, grew by 7.3 per cent. In terms of composition,
personal loans continued to account for the larger share (74.8%),
while retail loans accounted for the balance (25.2%). As a share of
total sectoral credit from the ODCs, consumer credit rose to 7.8 per
cent, from 7.0 per cent in the preceding quarter.


SECTORS
Allocation (₦ Billion)
Share in Total (%)
Growth
(%)
Sep-22
(1)
Jun-23
(2)
Sep-23
(3)
Sep-22
(4)
Jun-23
(5)
Sep-23
(6)
(3) &
(2)
[a] Agriculture

[b] Industry

of which Manufacturing

[c] Services

of which:
Finance, Insurance &
Capital Market

Trade/General Commerce

TOTAL

Consumer
Credit

40 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Figure 25: Consumer Credit Outstanding

Source: Central Bank of Nigeria

Figure 26: 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 preceding
quarter. Average net industry liquidity declined by 6.7 per cent to
N358.91 billion, from N384.54 billion in the preceding quarter. Total
fiscal injections increased by 263.8 per cent to N2,796.17 billion,
from N768.67 billion in Q22023. OMO issues amounted to N150.00

Sep. 22
Dec-22
Mar-23
Jun-23
Sep-23
Per cent (%)
N Billion
Personal loan
Retail loan
Total
Total (% of total credit by the ODCs)

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

41 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
billion, while maturities worth N55.00 billion were repaid during the
quarter under review, resulting in a net withdrawal of N95.00 billion.
Following the relative decline in liquidity, standing lending facility
(SLF) rose to N5,825.75 billion, with average daily request of
N126.65 billion, compared with the standing lending facility of
N4,773.92 billion, and average daily request of N97.43 billion, in the
preceding quarter. Placements at the standing deposit facility (SDF)
increased to N2,442.89 billion, with a daily average of N38.17 billion,
compared with the placements of N1,296.40 billion, and a daily
average of N23.15 billion, in the preceding quarter. The coexistence
of increase in both SLF and SDF reflects the uneven distribution of
liquidity among banks.


42 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Figure 27: Transactions at the Standing Facility Window (N’ Billion)

Source: Central Bank of Nigeria
Patronage of NTBs and FGN bond increased due to higher yields in
the period. NTBs worth ₦1,407.36 billion, ₦5,775.89 billion, and
₦1,407.36 billion were offered, subscribed to, and allotted, respectively, in
the review quarter, relative to ₦1,010.04 billion, ₦4,601.50 billion, and
₦1,010.04 billion in the preceding quarter. The rise in subscription,
particularly, for the longer-term securities at ₦5,603.44 billion, which
accounted for 95.0 per cent of total subscription (bid rate of 11.3±7.8 %),
could be attributed to higher investor-confidence about the ability of the
Bank to rein-in inflation in the long-term.

Figure 28: Primary Market NTBs (N’ Billion)
Source: Central Bank of Nigeria

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

Q3 2022 (N'B)
Q2 2023 (N'B)
Q3 2023 (N'B)
Offer
1369.37
1010.04
1407.36
Subscrption
1494.33
4601.50
5775.89
Allotment
1133.49
1010.04
1407.36
Primary Market

43 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption

Transactions at the FGN bond segment also exhibited upward trend
with amount offered, subscribed to, and allotted at N1,080.00 billion,
N1,548.69 billion and N1,135.99 billion in Q32023, compared with
N675.00 billion, N865.53 billion and N533.60 billion, respectively, in
the preceding quarter. The bid and marginal rates stood at 13.5
(±4.5) per cent and 14.4 (±1.9) per cent in Q32023, compared with
12.4 (±4.2) per cent and 12.8 (±1.8) per cent, respectively, in the
preceding quarter.
Figure 29: Primary Market Auctions of FGN Bond (N’ Billion)

Source: Central Bank of Nigeria


Movements in key money market rates were mixed in the review
quarter. Notably, the inter-bank call and the Nigeria Interbank
Offered (NIBOR) call rates were consistent with the movement
in liquidity. Average interbank call rate increased to 12.7 per cent,
from 11.7 per cent in the preceding quarter, while NIBOR call
increased to 11.4 per cent from 10.0 per cent. The Open Buy Back
(OBB) rate, however, trended downwards to 9.1 per cent in Q32023,
compared with the 11.4 per cent in the preceding quarter. Similarly,
the NIBOR 30-day declined to 10.0 per cent, from 11.5 per cent in
Q22023.

Q3 2022 (N'B)
Q2 2023 (N'B)
Q3 2023 (N'B)
Offer

675.00

Subscrption
1558.07
865.53
1548.69
Allotment
1163.98
533.60
1135.99
Interest Rate
Developments

44 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Figure 30: Developments in Short-term Interest Rates in Per cent

Source: Central Bank of Nigeria

Average prime and maximum lending rates rose marginally by 0.2
and 1.2 percentage points to 14.1 and 28.6 per cent in Q32023, as
against 13.9 and 27.4 per cent, respectively, in the preceding
quarter. On the contrary, the weighted average term deposit
(WAVTD) rate fell marginally by 0.2 percentage point to 6.7 per cent,
from 6.9 per cent in the preceding quarter. Thus, the spread between
the weighted average term deposit and maximum lending rates
narrowed to 20.7 percentage points, from 21.8 percentage points in
the preceding quarter.
Figure 31: Trend in Average Term Deposit and Lending Rates in
Per cent

Source: Central Bank of Nigeria.
-5

Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23
Jul-23
Aug-23 Sep-23
Per cent (%)
Interbank call rates
OBB
NIBOR
NIBOR 30
MPR

Sep 2022
Dec-22
Mar-23
Jun-23
Sep-23
Percentage Point
Percent (%)
PRL
MXLR
WAVTD
SPRD (RHS)

45 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Note: PLR= Prime lending rate; MLR= Maximum lending rate; WAVTD= Weighted Average
term deposit rate; and SPRD= Spread.

2.3.3.2 Capital Market Developments
Activities on the Nigerian Exchange (NGX) Limited were bullish,
driven by favourable half-year corporate earnings, new listings,
and take-up of right issues on the exchange. Aggregate market
capitalisation increased by 5.5 per cent to N63,222.53 billion from
₦59,916.22 billion in the preceding quarter. A disaggregation of the
components of the aggregate market capitalisation showed that, the
equities, debt, and Exchange Traded Funds (ETF) rose by 9.4, 0.6
and 28.2 per cent, to close at N36,337.04 billion, N26,872.31 billion
and N13.20 billion, respectively. The equities, debt, and ETF
components constituted 57.3, 42.5 and 0.2 per cent, respectively, of
total market capitalization.
The All-Share Index (ASI) rose by 8.9 per cent to 66,382.14 index
points, relative to 60,968.27 index points in the preceding quarter.
The performance of the ASI was, mainly, driven by the favourable
half-year corporate earnings. The indices in all the segments tracked
were bullish except for the NGX-ASeM which trended downward,
relative to the levels in the preceding quarter.
Figure 32: Aggregate Market Capitalisation and All-Share Index

Source: Nigerian Exchange (NGX) Limited


2022Q3
2022Q4
2023Q1
2023Q2
2023Q3
Index Points
N' Billion
Aggregate Market Cap (N'Billion)
All Share Index (Index Points)
Market
Capitalisation
NGX All- Share
Index

46 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption

Table 10: Nigerian Exchange (NGX) Limited Sectoral Indices
Sectoral Indices
Q22023
Q32023
Change (%)
NGX-Insurance
277.07

2.1
NGX-Oil/Gas
775.85
914.02
17.8
NGX- AFR Bank Value
1,570.77
1,648.45
4.9
NGX- MERI Growth
3,396.92
4,269.37
25.7
NGX- MERI Value
3,543.64
3,938.19
11.1
NGX-Bank
645.42
666.22
3.2
NGX- AFR Div Yield
5,064.38
6,571.72
29.8
NGX-Pension
2,581.82
2,848.38
10.3
NGX-CG
1,788.36
1,863.18
4.2
NGX-Consumer Goods
894.76
1,132.38
26.6
NGX-Premium
6,256.51
6,775.03
8.3
NGX-Lotus II
4,039.16
4,323.21
7.0
NGX-30
2,201.23
2,442.11
10.9
NGX-Mainboard
2,675.20
2,951.55
10.3
NGX-Industrial Goods
2,491.31
2,662.86
6.9
NGX-AseM
659.42
658.99
-0.1
NGX-Sovereign Bond
762.86
769.82
0.9
NGX-Growth
2,493.13
2771.87
11.2
NGX-Pension Board
1,052.79
1,160.90
10.3
Source: Nigerian Exchange (NGX) Limited

The value of traded securities on the Exchange increased by 31.0
per cent to N603.64 billion, while the volume of traded securities
declined by 10.6 per cent to 43.30 billion shares in 519,699 deals,
relative to N460.77 billion, and 48.41 billion shares, in 398,744 deals
recorded in the preceding quarter
Figure 33: Volume and Value of Traded Securities on the
Nigerian Exchange Limited

Source: Nigerian Exchange (NGX) Limited.

2022Q3
2022Q4
2023Q1
2023Q2
2023Q3
Billions of Shares
N' Billion
Value of Traded Securities
Volume of Traded Securities

47 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
There were twenty-two (22) new listings, one (1) delisting, and
thirteen (13) supplementary listings on the Exchange, compared with
three (3) new listings and two (2) de-listings in the previous quarter.
The new listings in the review quarter comprised two (2) savings
bonds and one (1) rights issue.
Table 11: Listings on the Nigerian Exchange Limited
Company/Security
Shares Units/Price
Remarks
Listing
Sovereign Trust
Insurance Plc
2,841,116,504 Units at 50
kobo each
Rights Issue
New
15.64% FGN DEC 2032
130,000,000 units at N1000
each
Sukuk Bond
New
McNichols Consolidated
Plc
531,242,609 units at 50 kobo
each
Rights Issue
New
Fidelity Bank Plc
3,037,414,308 units at 50 kobo
each
Rights Issue
Supplementary
9.070% FGNSB
JULY 2025
284,156 units at N1000 each
Savings Bonds
New
10.070% FGNSB JULY

755,551 units N1000 each
Savings Bonds
New
Ardova Petroleum Plc
Entire Issued Shares
Delisting

Delisting

Flour Mills of Nigeria Plc./
14.50% FMN MAY 2026
46,000,000 units at N1,000
each.
Unsecured Bond
New
MTN Nigeria
Communication Plc
641,047,053 Units at 2 kobo
each
Scrip Dividend
Election Scheme
New
Sovereign Trust
Insurance Plc
2,841,116,504 units at 50 kobo
each
Rights Issue
New
9.634% FGNSB AUG

421,763 units at N1000 each
Savings Bonds
New
10.634% FGNSB AUG

1,057,470 units at N1000 each
Savings Bonds
New
Nigerian Exchange Group
Plc/ NGX30H4
N2,616.75
Futures Contract
New
Nigerian Exchange Group
Plc/ NGXPENSIONH4
N3,022.25
Futures Contract
New
FCMB Group Plc/ 16%
FCMG FEB 2028
20,686,000 units at N1000
each
Unsecured Bond
New
Wema Bank Plc
8,572,022,765 units at 50 kobo
each
Rights Issue
New
14.70% FGN JUN

18,570,000 units at N1000
each
Savings Bond
New
15.45% FGN
JUN 2038
100,643,000 units at N1000
each
Savings Bond
New
15.70% FGN JUN 2053
221,562,000 units at N1000
Savings Bond
New
Chapel Hill Denham
Management Limited/
Nigeria Infrastructure
Debt Fund
853,694,759 units at N108.39
each
Debt Fund
New
VFD Group Plc
190,027,365 at N244.88 each
Initial Offer
New
Jaiz Bank Plc
5,408,356,536 at 50 kobo
each
Rights Issue
New
FBN Holdings Plc
8,973,823,198 units at N15.50
each
Rights Issue
New
VFD Group Plc
63,342,455 units at N197.33
each
Rights Issue
New
13.98% FGN
FEB 2028
539,364,000 units
Savings Bond
Supplementary
12.50% FGN
APR 2032
149,379,000 units
Savings Bond
Supplementary
14.80% FGN
APR 2049
788,556,000 units
Savings Bond
Supplementary

48 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
Company/Security
Shares Units/Price
Remarks
Listing
13.00% FGN
JAN 2042
148,899,000 units
Savings Bond
Supplementary
12.98% FGN
MAR 2050
509,898,000 units
Savings Bond
Supplementary
14.55% FGN
APR 2029
193,077,000 units
Savings Bond
Supplementary
14.70% FGN
JUN 2033
72,950,000 units
Savings Bond
Supplementary
15.45% FGN
JUN 2038
298,346,000 units
Savings Bond
Supplementary
15.70% FGN
JUN 2053
998,774,000 units
Savings Bond
Supplementary
14.70% FGN
JUN 2033
72,950,000 units
Savings Bond
Supplementary
15.45% FGN
JUN 2038
298,346,000 units
Savings Bond
Supplementary
15.70% FGN
JUN 2053
998,774,000 units
Savings Bond
Supplementary
Source: Nigerian Exchange Limited (NGX).
Notes: FGN=Federal Government of Nigeria; Plc=Public Limited Liability Company


2.3.3.3 Financial Soundness Indicators
The soundness of the banking industry was sustained in the
review quarter as relevant indicators remained within regulatory
thresholds.
The banking system Capital Adequacy Ratio (CAR) rose marginally
by 0.8 percentage point to 12.0 per cent, relative to the 11.2 per cent
in the preceding quarter. The development reflected a rise in the
banks’ total qualifying capital relative to the increase in risk weighted
assets, due to half-year retained earnings. The ratio remained above
the 10.0 per cent benchmark for banks with National authorisation,
but below the 15 per cent threshold for banks with international
authorisation.
Banks’ asset quality measured by the ratio of non-performing loans
(NPL) to total loans and advances at 4.2 per cent, was better than
the prudential benchmark of 5.0 per cent, but 0.1 percentage point
above the level in the preceding quarter. The industry Liquidity Ratio
(LR) was 53.7 per cent, above the minimum regulatory benchmark
of 30.0 per cent. It was, however, below the 62.2 per cent in the
preceding quarter.


49 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
This document is for CBN internal consumption
2.4
EXTERNAL SECTOR DEVELOPMENTS
Despite the pressure on the external sector, the current account
posted a higher surplus than the level in the preceding quarter.
The surplus in the current account improved on account of a
favourable trade balance arising from higher export receipts
and lower import bills. The financial account recorded a higher
net incurrence of financial liabilities, driven by inflow of direct
investment equities and higher purchase of fixed income
securities. The external reserves stood at US$32.79 billion at
end-September 2023, compared with the US$33.75 billion at
end-June 2023. The level of external reserves could cover 6.3
months of import for goods and services or 8.7 months of
import for goods only. The average exchange rate of the naira
per US dollar at the Nigerian Autonomous Foreign Exchange
Market (NAFEM) was ₦764.82/US$, compared with the
₦511.23/US$ in Q22023. The international Investment Position
recorded a higher net financial liability of US$54.29 billion.
2.4.1 Current and Capital Account
The current account surplus was sustained in the review
quarter. A current account surplus of US$3.28 billion or 4.0 per cent
of GDP was recorded in Q32023, attributable to a favourable trade
balance following the significant surplus in the goods account. The
trade balance was higher than the US$0.81 billion or 0.8 per cent of
GDP recorded in the preceding quarter, mainly, due to increased
export earnings, and lower import bills.
Figure 34: Current Account Balance (US$ Billion)

Source: Central Bank of Nigeria

Q22022
Q32022
Q42022
Q12023
Q22023
Q32023
US$ Billion
Summary

50 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
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Merchandise export earnings rose on account of higher oil
receipts. Aggregate export earnings increased by 7.0 per cent to
US$13.70 billion, from US$12.80 billion in Q22023. A breakdown
showed that oil receipts rose by 13.7 per cent to US$12.64 billion,
from US$11.12 billion in Q22023, due to increase in the price and
production of crude oil, to $89.91 per barrel from $80.15 per barrel
and to 1.20mbpd from 1.14mbpd in Q22023, respectively. The rise
in crude oil prices was attributed to the agreement between Saudi
Arabia and Russia to extend their production cuts till the end of 2023.
On the other hand, non-oil export receipts declined by 37.1 per cent
to US$1.06 billion, from US$1.68 billion in the preceding quarter,
following the decline in the receipts from electricity and other non-oil
export. In terms of share, crude oil and gas export constituted 92.3
per cent of total export, while non-oil export accounted for the
remaining 7.7 per cent.
Merchandise import bills decreased, following reduced
importation of oil and non-oil products. Merchandise import fell
by 16.7 per cent to US$10.53 billion, from US$12.65 billion in
Q22023, due to lower importation of oil and non-oil products.
Importation of oil products fell by 22.5 per cent to US$3.51 billion,
from US$4.54 billion in the preceding quarter. Similarly, the
importation of non-oil products fell by 13.5 per cent to US$7.02
billion, from US$8.11 billion in the preceding quarter. Analysis by
share showed that non-oil import remained dominant, accounting for
64.1 per cent of the total, while petroleum products constituted the
balance of 35.9 per cent.
A breakdown of import by sector revealed that raw materials and
machinery accounted for the largest share of 63.6 per cent. Other
sectoral import shares were manufactured products, 12.0 per cent;
food products (10.0%), petroleum products (6.2%), transport (3.8%),
agricultural products (2.2%), and minerals (2.1%).
Export
Performance
Merchandise
Import

51 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
ECONOMIC REPORT, THIRD QUARTER 2023
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Figure 35: Import by sector in Per cent

Source: Central Bank of Nigeria

The deficit in the services account, widened, due to higher
payments for travel and financial services. It rose by 3.5 per cent
to US$3.31 billion, from US$3.20 billion in Q22023, driven, largely,
by higher payments for other related travels.
An analysis of services revealed that the total payments rose to
US$4.46 billion, from US$4.30 billion in the preceding quarter.
Payments for travel, financial, and government goods and services,
rose by 52.2, 89.9 and 62.2 per cent, to US$1.21 billion, US$0.14
billion, and US$0.14 billion, respectively. On the other hand,
payments for transportation, insurance and pension services,
telecommunications, other business services, personal, cultural &
recreation services decreased by 7.5, 9.8, 54.2, 12.0 and 17.8 per
cent to US$1.68 billion, US$0.15 billion, US$0.08 billion, US$0.98
billion, and US$0.03 billion, respectively.
In terms of share, transportation services was the largest at 37.7 per
cent, while travels was 27.3 per cent. Other business services,
insurance, and pension, financial, government services and
Raw Materials
Manufactured
Products
12.0%
Food Products
10.0%
Petroleum Products
Minerals
2.1%
Transport
3.8%
Agricultural Products
2.2%
Services

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telecommunications, accounted for 21.9, 3.3, 3.1, 3.0 and 1.7 per
cent, respectively. Other categories of services accounted for the
balance of 2.0 per cent.
Figure 36: Share of Service Out-Payments in Per cent


Source: Central Bank of Nigeria.

Source: Central Bank of Nigeria.

At US$1.14 billion, receipts from services increased by 3.6 per cent,
driven, mainly by transport and financial services. Transport services
rose by 4.2 per cent to US$0.49 billion, due to higher freight costs in
sea transportation services, while financial services increased by
39.9 per cent to US$0.31 billion, compared with its level in the
preceding quarter.
Government goods and services also increased by 8.1 per cent to
US$0.12 billion, relative to the level in the preceding quarter.
Receipts from travel services, however, decreased by 32.0 per cent
to US$0.13 billion, compared with US$0.19 billion in the preceding
quarter.
Transportation
Travels
27.3%
Insurance
3.3%
Communications
Government
3.0%
Other business
21.9%
Financial
3.1%
Others
2.0%

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In terms of share, receipt from transportation services was 42.9 per
cent; financial services, 27.0 per cent; travels, 11.6 per cent;
government
goods
and
services,
10.7
per
cent;
and
telecommunication services, 4.7 per cent. Others accounted for the
balance of 3.1 per cent.

Figure 37: Share of Services Receipts in Per cent


Source: Central Bank of Nigeria.

The deficit in the primary income account widened, due to
higher investment income payments by non – residents. The
deficit in the primary income account increased by 9.3 per cent to
US$1.88 billion from US$1.72 billion in Q22023. This increase was
primarily driven by 18.2 per cent increase in investment income
payments, which amounted to US$2.59 billion, compared with
US$2.19 billion in the preceding quarter. Equity and investment
payment increased by 21.0 per cent to US$1.51 billion, from
US$1.25 billion in the preceding quarter. Similarly, interest payments
on loans increased to US$0.70 billion, from US$0.65 billion in the
second quarter. In contrast, dividend payments declined by 8.1 per
cent to US$1.83 billion, from US$1.99 billion in the second quarter.
Transportation
42.9%
Travels
11.6%
Financial
27.0%
Communications
4.7%
Government
10.7%
Others
3.1%
Primary Income

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The compensation of employees account maintained a surplus
position of US$0.07 billion, higher by 18.6 per cent, compared with
the level in the preceding quarter.

Figure 38: Primary Income Balance (US$ Billion)

Source: Central Bank of Nigeria.

The secondary income account maintained a surplus position, albeit,
lower than in the preceding quarter. The secondary income account
surplus decreased by 4.8 per cent to US$5.31 billion, from US$5.58 billion
in Q22023. The development was attributed to lower inflow of personal
transfers, which declined by 7.4 per cent to US$4.59 billion on account of
weaker economic performance, particularly, in advanced economies.
General government transfers, on the other hand increased by 13.4 per
cent to US$0.81 billion from US$0.71 billion in the preceding quarter, as
grants increased.


Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
US$ BILLION
Secondary Income

55 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
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This document is for CBN internal consumption
Figure 39: Secondary Income Balance and Remittances Inflow
(US$ Billion)


Source: Central Bank of Nigeria.

2.4.2 Financial Account
The financial account recorded a higher net incurrence of
financial liabilities, driven by portfolio investment debt
securities. The financial account recorded a higher net incurrence
of liabilities of US$3.74 billion or 4.6 per cent of GDP, compared with
US$1.25 billion or 1.2 per cent of GDP in Q22023.
There was an inflow of US$2.86 billion, compared with US$2.23
billion in the preceding quarter. The development was a result of
increased portfolio investment, occasioned by higher investments in
debt instruments by non-residents. FDI recorded a divestment of
US$0.20 billion, relative to US$0.07 billion in Q22023, due to
divestment in direct investment equities. ‘Other investment’ also
recorded a divestment of US$0.31 billion, in contrast to an inflow of
US$0.02 billion in the preceding quarter.

Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
US$ Billion
Secondary Income Balance
Remittances
Government Transfers
Financial Account
Developments
Net Incurrence
of Liability

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There was a disposal of US$0.87 billion in aggregate financial
assets, compared with an acquisition of US$0.98 billion in Q22023.
The development reflected the disposal of direct and other
investments, particularly, equity and investment fund shares and
reduction in the holdings of foreign currency and deposits by
residents. In contrast, portfolio investments recorded a higher net
acquisition of US$0.07 billion, compared with US$0.05 billion in
Q22023.

2.4.3 External Debt
Nigeria’s public sector external debt stock and external debt service
payment at end-June 2023 stood at US$43.16 billion or 10.4 per cent
of GDP and US$0.37 billion, respectively. A breakdown showed that
the multilateral loans, from the World Bank, International Monetary
Fund, and African Development Bank Groups, amounted to
US$20.79 billion, accounting for 48.2 per cent of the total. A total of
US$15.62 billion or 36.2 per cent of the total was borrowed from
commercial sources in the form of Euro Bonds. Loans from bilateral
sources was US$5.52 billion, or 12.8 per cent of the total, promissory
notes were US$0.93 billion, or 2.2 per cent of the total, while
syndicated loan (arranged by African Finance Corporation) stood at
US$0.30 billion or 0.7 per cent of the total debt stock.
The external debt service payment stood at US$0.37 billion at endJune 2023, relative to US$0.80 billion in the preceding quarter. A
breakdown showed that interest payment totalled US$0.21 billion,
accounting for 56.8 per cent of the entire debt service payment.
Principal repayment totalled US$0.13 billion, or 35.1 per cent of the
total, while other payments made up the balance. An analysis of
interest payments showed that interest payment on commercial
borrowings accounted for 76.2 per cent of the total at US$0.21 billion,
Public Sector
External Debt
Net Acquisition
of Asset

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while interest on multilateral loans amounted to US$0.04 billion or
19.1 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 was a higher net
financial liability of US$67.21 billion. The stock of financial assets
decreased to US$107.78 billion at Q32023, compared with
US$109.59 billion in the preceding quarter, due, largely to the 2.7
per cent fall in ‘reserve asset’. The direct investment assets also
declined by 1.5 per cent to US$13.45 billion, from the level at
Q22023, owing to lower investments in equities. The stock of
portfolio investments, however, increased by 1.2 per cent to US$4.10
billion, relative to the preceding quarter.
The stock of financial liabilities increased by 1.9 per cent to
US$174.99 billion, from US$171.79 billion at Q22023. The increase
was attributed, mainly, to the growth in the stock of portfolio
investment liabilities, which rose by 12.1 per cent to US$31.91 billion,
from its Q22023 level. The stock of direct investment and other
investment liabilities were US$73.51 billion and US$66.47 billion,
compared with US$72.08 billion and US$67.87 billion, respectively.

2.4.5. External Reserves
The external reserves remained well above the international
benchmark for import cover. The external reserves stood at
US$32.79 billion at Q32023, relative to US$33.75 billion in Q22023.
The level of external reserves could cover 6.3 months of import for
goods and services or 8.7 months of import for goods only.


International
Investment
Position
International
Reserves

58 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
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This document is for CBN internal consumption
Figure 40: External Reserves in US$ Billion and Months of Import
Cover


Source: Central Bank of Nigeria

A disaggregation of the external reserves showed that holdings by
the CBN was US$28.84 billion; Federal Government, US$3.95
billion; while the Federation held the balance of US$0.66 million. In
terms of currency composition, the US dollar was US$24.81 billion,
(75.7%); Special Drawing Rights US$4.42 billion (13.5%); Chinese
Yuan US$3.17 billion (9.7%); British Pounds US$0.21 billion (0.6%);
Euro US$0.17 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$8.22
billion in the review quarter. Foreign exchange inflow to the
economy increased by 1.6 per cent to US$16.34 billion from
US$16.09 billion in Q22023. Foreign exchange inflow through the
Bank increased to US$6.37 billion from US$5.41 billion in the
preceding quarter. Inflow through autonomous sources, however,
decreased to US$9.97 billion, from US$10.68 billion in the preceding
quarter.

Sep-22 Oct-22 Nov-22 Dec-22
Jan-23
Feb-23 Mar-23 Apr-23 May-23 Jun-23
Jul-23
Aug-23 Sep-23
US$ Billion
External Reserves - LHS
Months of Import (Goods only)
Months of Import (Goods and Services)
Foreign Exchange
Flows through the
Economy

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Foreign exchange outflow through the economy rose by 9.7 per cent
to US$8.12 billion, relative to US$7.40 billion in the Q22023. Outflow
through the Bank increased by 13.1 per cent to US$7.20 billion from
US$6.37 billion in the preceding quarter. Autonomous outflow,
however, fell by 11.0 per cent to US$0.92 billion as against the
US$1.04 billion in the preceding quarter.
Consequently, net foreign exchange inflow to the economy
decreased by 5.4 per cent to US$8.22 billion as against the US$8.69
billion in the preceding quarter. Net inflow through autonomous
sources, also fell to US$9.04 billion from US$9.64 billion in the
preceding quarter. Net outflow of US$0.82 billion was, however,
recorded through the Bank, compared with the net outflow of
US$0.96 billion in the preceding quarter.
Figure 41: Foreign Exchange Transactions through the Economy
(US$ Million) in the Third Quarter of 2023

Source: Central Bank of Nigeria
The average turnover at the Nigerian Autonomous Foreign
Exchange Market (NAFEM) declined by 23.5 per cent to US$0.97
billion relative to the US$0.13 billion in Q22023.


Net foreign
exchange inflow
through the
economy

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Figure 42: Turnover in the Nigerian Autonomous Foreign Exchange
Market (NAFEM)

Source: Central Bank of Nigeria.


2.4.7 Exchange Rate Movement
The average exchange rate of the naira per US dollar at the NAFEM
was ₦764.82/US$, compared with the ₦511.23/US$ in Q22023.

Most emerging market currencies depreciated against the US
dollar during the review quarter. The Russian ruble and Chinese
RMB depreciated by 14.0 and 3.1 per cent, respectively, relative to
the levels in the preceding quarter. The depreciation of the Russian
ruble was due to the ongoing war in Ukraine, Western sanctions, and

Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
PERCENT
US $ (M)
Average Turnover(LHS)
Rate of Turnover(RHS)
Average
Exchange Rate
Box 2: Other Developments in the Exchange Rate Market
To enhance transparency and accountability in the foreign exchange market, the
Bank announced the commencement of the price verification system portal (PVS)
as a requisite for form M application. The Bank also announced the operational
mechanism for the Bureau De Change (BDC) segment of the market that the
spread on buying and selling by BDC Operators shall be within an allowable limit
of -2.5% to +2.5% of the NAFEM weighted average rate of the previous day.
Mandatory rendition by BDC operators of the statutory periodic reports (daily,
weekly, monthly, quarterly, and yearly). Where Operators do not have any
transactions within the period, they are expected to render nil returns.
Naira against
Emerging Market
Currencies Selected
International
Currencies

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rising inflation, while the depreciation of the Chinese RMB was
attributed to weakening domestic economy, a divergence in
monetary policy between China and the United States, and a
strengthening US dollar. Conversely, the South African rand
appreciated by 0.3 per cent due to improved investor sentiment,
stronger economic growth, higher commodity prices, lower inflation,
and central bank intervention.

Figure 43: EMEs Currency Values to the US dollar

Sources: Central Bank Nigeria & Reuters

Table 12: EMEs Currency Rates to the US dollar
Sources: Central Bank of Nigeria & Reuters

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

Q2 2023

Q3 2023


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3.0 Economic Outlook
Global economic growth is expected to moderate to 3.0 per cent in
2023, from 3.5 per cent in 20225. The projected slowdown in
economic growth is, largely, attributed to slow and uneven recovery
from the consequences of the COVID-19 pandemic, the RussianUkraine war, and the effects of increasing geoeconomic
fragmentation, and monetary policy tightening. Divergence in growth
is expected across economies. In AEs, growth is expected to slow to
1.5 per cent, from 2.6 per cent in 2022, on account of labour
shortages, weaker manufacturing activities, and the tight monetary
policy stances. For EMDEs, growth is expected to decline modestly
to 4.0 per cent, from 4.1 per cent in 2022, albeit at varying levels
across different regions within the EMDEs. While growth in emerging
and developing Asia is expected to rise in 2023 on account of
expectations of higher demand, economic activities in sub-Saharan
Africa are projected to decline, due to worsening weather conditions,
global economic slowdown and supply chain constraints.
Global headline inflation is projected to decline from its peak of 8.7
per cent in 2022 to 6.9 per cent in 2023, with AEs experiencing the
most significant disinflation due to monetary tightening and lower
exposure to shocks from commodity prices and exchange rates.
The near-term outlook for Nigeria's economic growth remains
positive, despite some headwinds. The optimistic outlook is
underpinned by anticipated favourable trend in crude oil prices and
higher level of output. The strategic decision to phase out PMS
subsidy is expected to increase the fiscal space, offering an added
stimulus for growth. The growth prospect, however, is subject to
some downside risks including global economic uncertainties,
domestic security challenges, and higher debt service obligations.
Inflationary pressure may persist in the short-term, partly, on account
of higher domestic price of PMS and import costs. Other factors that
could add pressures to consumer prices include the impact of climate
change on agricultural output, and higher spending associated with
end-of the year festivities and off-cycle elections. The sustained tight

5 IMF WEO (October 2023)
Global Economic
Outlook
Domestic Economic
Outlook

63 | P a g e Central Bank of Nigeria Economic Report Third Quarter 2023
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This document is for CBN internal consumption
monetary policy stance and improvement in global supply chain,
however, are expected to moderate inflationary pressures.
The outlook for the external position of Nigeria remains optimistic,
driven by sustained crude oil price rallies and increased domestic oil
production. Specifically, sustained production cuts by OPEC+
through Q42023 leading to higher crude oil prices and earnings, and
gains from capital flows and remittances would support the external
reserves outlook. The risks of capital reversals is, however,
heightened by sustained monetary tightening in advanced
economies.