ECONOMIC REPORT
THIRD QUARTER 2014


CENTRAL BANK OF NIGERIA


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

The Central Bank of Nigeria Quarterly Economic Report is designed for the dissemination
of financial and economic information on the Nigerian economy on current basis. The
Report analyses developments in the financial, fiscal, real and external sectors of the
economy, as well as international economic issues of interest. The Report is directed at
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Economic Report Third Quarter

Contents


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Text Tables


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Appendix Tables
Figures


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1.0 Summary
Provisional data indicated that growth in key monetary aggregate
was moderate in the third quarter of 2014. Over the level at the end
of the preceding quarter, broad money supply, (M2), grew by 4.0 per
cent, compared with 1.5 per cent at the end of the preceding
quarter. The development relative to the preceding quarter
reflected, largely, the growth of 7.2 per cent in domestic credit (net)
which more than offset the effects of the 1.1 and 5.3 per cent
decline in foreign assets net and other assets net of the banking
system , respectively, during the review quarter.
Available data indicated that banks’ deposit and lending rates
trended downward in the third quarter. The spread between the
weighted average term deposit and maximum lending rates
widened by 0.26 percentage point to 17.44 per cent in the review
quarter. The margin between the average savings deposit and the
maximum lending rates, however, narowed by 0.12 percentage
point to 22.28 per cent. The weighted average inter-bank call rate
rose by 0.53 percentage point to 11.12 per cent in the third quarter
of 2014, reflecting the liquidity condition in the inter-bank funds
market.
Provisional data indicated that the value of money market assets
outstanding at the end of the third quarter of 2014 increased by 2.9
per cent to N7,406.32 billion, compared with the increase of 4.2 per
cent at the end of the preceding quarter. The development was
attributed, laregely, to the 5.3 and 4.4 per cent increase in FGN
Bonds
and
Banker’s
Acceptance
outstanding,
respectively.
Available data indicated that developments in the Nigerian Stock
Exchange (NSE) were mixed during the third quarter of 2014.
Total federally-collected revenue
stood at
N2,685.08 billion,
representing an increase of 2.7 per cent above the receipts in the
second quarter of 2014, but was a decline of 1.2 per cent below the
proportionate quarterly budgeted estimate. At N1,723.11 billion, oil
receipts, which constituted 64.2 per cent of the total, fell below the
proportionate budget estimate and the level in the preceding
quarter by 3.8 and 4.0 per cent, respectively. The fall in oil receipts
was attributed, largely, to a decrease in crude oil and gas exports
during the review quarter.
Non-oil receipts, at N961.98 billion, was higher than the budget
estimate and the receipts in the preceding quarter by 3.7 and 17.6
per cent, respectively. Federal Government retained revenue was
N924.67 billion, while total expenditure was N971.07 billion. Thus, the


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fiscal operations of the Federal Government resulted in an estimated
deficit of N46.40 billion in the third quarter of 2014, compared with
the quarterly budget and the preceding quarter’s deficit of N241.1
billion and N122.41 billion, respectively.
Activities in the agricultural sector were boosted by widespread
rainfall in the third quarter. Nigeria’s crude oil production, including
condensates and natural gas liquids, averaged at 1.98 million barrels
per day (mbd) or 182.16 million barrels for the quarter. Crude oil
export stood at 1.53 mbd or 140.76 million barrels for the quarter,
while deliveries to the refineries for domestic consumption remained
at 0.45 mbd or 41.4 million barrels. The average price of Nigeria’s
reference crude, the Bonny Light (370 API), declined by 8.2 per cent
below the level in the preceding quarter.
The end-period headline inflation rate (year-on-year) was 8.3 per
cent, compared with the 8.2 and 8.0 per cent recorded at the end
of the preceding quarter and the corresponding quarter of 2013,
respectively. Inflation rate on a twelve-month moving average basis
was 8.0 per cent, the same level as the preceding quarter.
Provisional data indicated that foreign exchange inflow and outflow
through the Central Bank of Nigeria (CBN) amounted to US$13.09
billion and US$11.80 billion, respectively, resulting in a net inflow of
US$1.29 billion during the review quarter. Foreign exchange sales by
the CBN to the authorized dealers amounted to US$10.20 billion,
compared with US$10.79 billion in the preceding quarter. The
average exchange rate of the naira vis-à-vis the US dollar at the
rDAS window remained unchanged at N157.29 per US dollar same
level as in the preceding quarter. Relative to their respective levels in
the preceding quarter, the naira depreciated by 0.5 and 0.1 per
cent at both the bureau-de-change and inter-bank segments of the
market.
Available data from the latest World Economic Outlook (WEO)
indicated that projection for global growth in 2014 was revised
downward to 3.3 per cent, a 0.4 percentage point below the
estimated growth in the second quarter. The development was
attributed to increased downward risk, including
worsening
geopolitical tensions and reversal of recent risk spread, as well as
volatility compression in financial makets.
World crude oil demand in the third quarter increased by 2.1 per
cent above the level recorded in the second quarter. Similarly, world
crude oil output also increased by 0.9 per cent over the level
recorded in the preceding quarter. The OPEC reference basket
price of eleven selected crude streams fell by 4.6 and 5.7 per cent


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Economic Report Third Quarter

below its levels in the preceding quarter and the corresponding
quarter of 2013, respectively. The prices of the UK Brent, the WTI and
the Forcados exhibited similar trend.
Other major international economic developments and meetings of
importance to the domestic economy during the review quarter
included: the 2014 Mid-year statutory meetings of the West African
Monetary Zone (WAMZ) held in Abuja, Nigeria from July 14 – 17, 2014;
the 29th meeting of Board of Governors of the West African Institute
for Financial and Economic Management (WAIFEM) held on July 16,
2014; and the First United States – Africa Leaders’ Summit held in
Washington D.C., USA from August 4 – 6, 2014.


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2.0 Financial Sector Developments
2.1 Monetary and Credit Developments
Provisional data indicated that growth in the key monetary
aggregate was moderate at the end of the third quarter of 2014.
Developments in banks’ deposit and lending rates were mixed
during the review quarter. The value of money market assets
outstanding increased, due largely, to the rise in FGN Bonds.
Developments in the Nigerian Stock Exchange (NSE) were mixed.
Provisional data indicated that growth in the key monetary
aggregate was moderate at the end of the third quarter of
2014. Relative to the level at the end of the second quarter of
2014, broad money supply, (M2), grew by 4.0 per cent to
N16,570.2 billion, compared with the growth of 1.5 per cent at
the end of the preceding quarter, but contrasted with the 7.9
per cent decline at the end of the corresponding quarter of
2013. The development relative to the preceding quarter
reflected, largely, the growth of 7.2 per cent in domestic
credit (net), which more than offset the effects of the 1.1 and
5.3 per cent decline in foreign assets net and other assets net
of the banking system , respectively.
Narrow money supply (M1), at N6,616.4 billion, grew by 0.4 per
cent, at the end of the review quarter, in constrast with the
decline of 4.4 and 9.3 per cent at the end of the preceding
quarter and corresponding quarter of 2013, respectively. The
development, relative to the
preceding quarter, was
attributed to the growth of 6.9 per cent in currency outside
banks components.
Quasi-money fell by 6.6 per cent to N9,953.8 billion at the end
of the third quarter 2014, compared with the decline of 6.1 per
cent at end of the preceding quarter. The development was
attributed to the decline in time and savings deposits with
banks (Fig. 1, Table 1).
Growth in key
monetary
aggregate was
moderate during
Q3 2014.


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Figure 1: Growth Rate of Narrow Money (M1) and Broad Money (M2)1
-15
-10
-5

-10
-5

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Quarterly (%)
Cumulative (%)
QM1 (RHS)
QM2 (RHS)
CM1 (LHS)
CM2 (LHS)

At N16,265.2 billion, aggregate banking system’s credit (net)
to the domestic economy grew by 7.2 per cent at the end of
the third quarter of 2014, in contrast to the decline of 1.1 and
0.5 per cent at the end of the preceding quarter and the
corresponding period of 2013, respectively. The development
relative to the level at the end of the second quarter of 2014
reflected the growth of 22.2 and 4.1 per cent in net claims on
Federal Government and private sector, respectively.
Banking system’s credit (net) to the Federal Government, at
the end of the review quarter, rose by 22.2 per cent to
negative N1,393.5 billion, in constrast to the decline of 24.8
and and 25.5 per cent at the end of the preceding quarter
and the corresponding period of 2013, respectively. The
development relative to the level at the end of the preceding
quarter was attributed to the increase in banking system’s
holding of Federal Government treasury securities, particularly
the treasury bills.
At the end of the third quarter of 2014, banking system’s credit
to the private sector rose by 4.1 per cent to N17,658.8 billion,
compared with the 1.1 and 3.7 per cent increase in the

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

Banking system
credit to the
Federal
Government grew
by 22.2 per cent at
the end of the
third quarter of
2014.


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preceding quarter and the corresponding quarter of 2013,
respectively. The development relative to the preceding
quarter reflected the growth of 7.7 per cent in claims on the
core private sector (Fig. 2, Table 1).
Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy2
-30
-20
-10


Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Quarterly (%)
Cumulative (%)
QCP (RHS)
QCG (RHS)
QAC (RHS)
CCP (LHS)
CCG (LHS)
CAC (LHS)

At N7,607.6 billion, foreign assets (net) of the banking system
fell by 1.1 per cent at the end of the third quarter of 2014, in
constrast to the growth of 1.1 per cent at the end of the
preceding
quarter.
The
development
relative
to
the
preceding quarter was attributed, largely, to the 11.9 per cent
fall in CBN holdings of foreign assets.
Other assets (net) of the banking system fell by 5.3 per cent to
negative N7,302.6 billion at the end of the review quarter,
compared with the decline of 13.8 per cent at the end of the
corresponding quarter of 2013. This, however, constrasted with
the increase of 4.5 per cent at the end of the preceding
quarter of 2014.


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


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Economic Report Third Quarter

Table 1: Growth in Monetary and Credit Aggregates (Per cent) Over
Preceding Quarter
Mar-13
Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Foreign Assets (Net)

Other Assets (Net)

Broad Money Supply (M2)

Quasi-Money

Narrow Money Supply (M1)

Memorandum Items:
Reserve Money (RM)


2.2
Currency-in-circulation (CIC) and Deposits at
the CBN
At N1,548.3 billion, currency-in-circulation rose by 3.4 per cent
at the end of the third quarter, compared with the increase
of 3.4 per cent at the end of the corresponding quarter of
2013. This, however, contrasted with the 4.9 per cent decline
at the end of the preceding quarter of 2014. The
development
relative
to
the
preceding
quarter
was
attributed, largely, to the 6.9 per cent rise in currency outside
banks.

Total deposits at the CBN declined by 2.9 per cent to N6,683.2
billion, in contrast to the increase of 1.0 per cent at the end of
the second quarter of 2014. The development reflected,
largely, the 9.6 per cent fall in Federal Government deposits,
which more than offset the 3.4 and 4.4 per cent increase in
the deposits of banks and “Others”, respectively. Of the total
deposits, the shares of the Federal Government, banks and
‘’Others’’ were N3,047.3 billion (45.6 per cent), N3,334.4 billion
(49.9 per cent) and N301.5 billion (4.5 per cent), respectively.
Reserve money (RM), at N4,882.7 billion, rose by 3.4 per cent,
in contrast to the 6.2 per cent decline recorded at the end of
the preceding quarter. The development, relative to the level
at the end of the preceding quarter, was attributed to the
increase of 3.4 apiece in its currency and demand deposit
components.
Reserve money
(RM) fell at the
end of the second
quarter of 2014.


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2.3
Money Market Developments
Periodic injection of funds from Statutory Revenue Allocation
(SRA), Value Added Tax (VAT), Non-oil Revenue and Subsidy
Reinvestment & Empowerment Program (Sure-P), as well as
payments of Joint Venture Cash (JVC) call to oil partners, net
inflows through Cash Reserve Requirements (CRR) and
repayment of matured federal government securities were
the source of liquidity flows during the review quarter. Open
Market Operations (OMO) was deployed to moderate the
level of liquidity in the system. Patronage of the Federal
Government securities was quite remarkable during the
quarter. Money market rates reflected the liquidity condition in
the system. Inter-bank call and Open Buy Back (OBB) rates
were low and stable for most of the period except for slight
changes in the movement of rates triggered by liquidity
shortages in the period when NNPC withdrawals impacted the
system.
Provisional data indicated that the total value of money
market assets outstanding at the end of the third quarter of
2014 stood at N7,406.32 billion, showing an increase of 2.9 per
cent, compared with the increase of 4.2 per cent at the end
of the preceding quarter. The development was attributed
largely, to the 5.3 and 4.4 per cent increase in the FGN Bonds
and Bankers’ Acceptance (BA), respectively.

2.3.1
Interest Rate Developments
Available data indicated that banks’ deposit and lending
rates trended downward during the third quarter of 2014. All
rates on deposits of various maturities fell from a range of 3.42
– 10.06 per cent in the second quarter of 2014 to a range of
3.36 – 9.57 per cent in the third quarter. Similarly, at 8.20 per
cent, the average term deposit rate declined by 0.44
percentage point below its level in the preceding quarter.
The maximum and prime lending rates also fell by 0.18 and
0.08 percentage point below their levels in the preceding
quarter to 25.64 and 16.49 per cent, respectively.
Consequently, the spread between the weighted average
term deposit and maximum lending rates widened by 0.26
percentage point to 17.44 per cent from 17.18 per cent in the
preceding quarter. The margin between the average savings
Money market
rates were
relatively stable
during the review
period.
The spread
between the
weighted – average
term deposit and
maximum lending
rates widened
during the review
period.


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deposit and the maximum lending rates, however, narrowed
by 0.12 percentage point to 22.28 per cent from 22.40 per
cent in the preceeding quarter. With the headline inflation
rate at 8.3 per cent at end-September 2014, most deposit and
lending rates were positive in real terms.
At the interbank funds segment, the weighted average interbank call rate, which stood at 10.59 per cent at the end of the
preceding quarter, rose by 0.53 percentage point to 11.12 per
cent in the third quarter of 2014, reflecting the liquidity
condition in the banking system. Similarly, the weighted
average rate at the Open-Buy-Back (OBB) segment rose by
0.53 percentage point to 11.06 per cent in the review quarter,
from 10.53 per cent in the preceding quarter. The Nigeria
Inter-bank Offered Rate (NIBOR) for the 7-day tenor fell to
10.63 per cent from 10.91 per cent in the previous quarter.
However, the 30-day tenor rose from 11.94 per cent in the
previous quarater to 12.58 per cent in the third quarter of 2014
(Fig. 3, Table 2).
Figure 3: Selected DMBs Interest Rates (Average)

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Percent per Annum
Percent per Annum
Prime
Interbank
Maximum
Average Term Deposits (RHS)

Table 2: Selected Interest Rates (Percent, Averages)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Average Term Deposits

Prime Lending

Interbank

Maximum Lending


Interbank call rate
rose in Q3 2014.


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2.3.2
Commercial Paper (CP)
Commercial Paper (CP) outstanding held by DMBs rose by 0.4
per cent to N10.67 billion at the end of the third quarter of
2014, compared with the value of N10.63 billion at the end of
the preceding quarter. This development was due to the
increase in investment in CP by the commercial banks during
the quarter under review. Thus, CP constituted 0.14 per cent of
the total value of money market assets outstanding, during
the review period, compared with 0.15 per cent at the end of
the preceding quarter.
2.3.3
Bankers’ Acceptances (BAs)

At the end of the review quarter, BAs increased by 4.4 per
cent to N29.38 billion, compared with N28.15 billion at the end
of the preceding quarter. The development was attributed to
the increase in investment in BAs by the DMBs during the
quarter. Consequently, BAs accounted for 0.4 per cent of the
total value of money market assets outstanding, at the end of
the third quarter of 2014, compared with 0.4 per cent at the
end of the preceding quarter.
2.3.4 Open Market Operations
Open Market Operations (OMO) bills with maturities ranging
from 125 -154 days were used for liquidity management in the
third quarter of 2014. Total sales was N2,455.03 billion and
subscription was N2,564.32 billion. The bid rates ranged from
10.55 – 11.25 per cent, while the stop rates were between
10.55- 10.80 per cent. Matured bills amounting to N2,042.92
billion were repaid, translating to a net withdrawal of N412.11
billion in the review period.
2.3.5
Primary Market
At the primary market segment, NTBs of 91-, 182- and 364-day
tenors were offered in the third quarter with total amount
offered and allotted at N852.08 billion apiece while
subscription amounted to N1,375.52 billion. At the 91-day
segment, total subscription and allotment were N292.14 billion
and N223.53 billion, respectively, with bid rates ranging from
8.00 to 15.00 per cent while, the stop rates were from 9.58 –
10.00 per cent. For the 182-day, total subscription and
allotment
were
N447.03
billion
and
N292.46
billion,
respectively. The bid rates ranged from 9.00 –12.62 per cent
Investment in
CP by banks
rose in the third
quarter of 2014.
Banks’ holdings
of BAs increased
during Q3 of
2014.


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while the stop rates were 10.10 – 10.24 per cent. At the 364day segment, total subscription and allotment were N636.34
billion and N336.08 billion, respectively, with bid rates ranging
from 9.80 – 12.72 per cent, while stop rates ranged from 10.14
– 10.35 per cent. Allotment to non – competitive bidders in the
third quarter of 2014 was N464.84 billion, while repayment
stood at N852.08 billion.
2.3.6
Bonds Market
FGN Bonds of 3-, 10- and 20-year tranches were reopened
during the review period. The 20-year FGN Bond was issued in
July 2014 and total amount offered, subscribed to and
allotted were N300 billion, N613.91 billion and N300.00 billion,
respectively. In addition, N16.18 billion of the 10- year bond
was allotted on non-competitive basis. The marginal rates for
the bonds ranged from 11.0000-12.9990 per cent, compared
to 11.3599 -13.1490 per cent in the preceding quarter. The
lower yield in the review period could be attributed to the
liquidity surfeit in the system. Moreover, 9.25% FGN SEP 2014
valued N100.00 billion matured towards the end of the quarter
and was repaid. Cumulatively, total allotment was N316.18
billion and repayment was N100.00 billion, translating to a net
withdrawal of N216.18 billion.
2.3.7
CBN Standing Facilities
Total request for the standing lending facility (SLF) granted
during the review period was N327.38 billion with total interest
earned amounting to N175.31 million, compared with the
total request of N198.19 billion and total interest of N93.89
million in the preceding quarter.
Total standing deposit facility (SDF) granted during the review
period was N17, 960.61billion, while the cost incurred stood at
N7.35 billion compared with the request of N22,293.91 billion
and total interest of N9.32 billion in the preceding quarter.
2.4
Deposit Money Banks’ Activities
Available data indicated that the total assets and liabilities of
the commercial banks stood at N25,946.9 billion at the end of
the third quarter of 2014, representing an increase of 3.4 per
cent over the level at the end of the preceding quarter. Funds
were sourced largely from increased mobilization of time,
savings and foreign currency deposits; foreign liabilities; and
Subscription for FGN
Bonds of various
maturities increased
during the third
quarter of 2014.


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demand deposits were used mainly, for the extension of
credit to the private sector, central government and
acquisition of foreign assets.
At N13,876.9 billion, banks’ credit to the domestic economy,
rose by 5.0 per cent compared with the level in the preceding
quarter. The development was attributed to the 6.2 and 3.6
per cent increase in claims on the private sector and Federal
Government, respectively, in the review period.
Central Bank’s credit to the banks fell by 9.2 per cent to
N243.4 billion at the end of the review quarter, reflecting the
decrease in CBN loans and advances to banks. Total
specified liquid assets of the banks stood at N6,542.6 billion,
representing 37.8 per cent of their total current liabilities. At
that level, the liquidity ratio rose by 4.5 percentage point
above the level in the preceding quarter, and was 16.5
percentage points above the stipulated minimum ratio of 30.0
per cent. The loans-to-deposit ratio, at 59.9 per cent, was 3.1
percentage point above the level at the end of the
preceding quarter, but was 20.1 percentage points below the
prescribed maximum ratio of 80.0 per cent.
2.5
Discount Houses’ Activities
Total assets/liabilities of the discount houses stood at N155.3
billion at the end of the third quarter of 2014, indicating a
decline of 10.3 per cent below the level in the preceding
quarter but showed an increase of 16.1 per cent above the
level at the end of the corresponding quarter of 2013. The
decline in assets relative to the preceding quarter was
accounted for largely, by the fall in claims on others and cash
and balances with banks, which more than offset the effect of
the increase in claims on other assets and claims on state
governments. Correspondingly, the decline in total liabilities
was attributed to the fall in all the components of total
liabilities, except money at call which increased by 19.3 per
cent above the level in the preceding quarter .
Discount houses’ investment in Federal Government securities
of less than 91-day maturity fell by 17.6 per cent to N52.6 billion
and represented 44.8 per cent of their total deposit liabilities.
At
this
level,
discount
houses’
investment
was
15.2
percentage points below the prescribed minimum level of
At 42.0 per cent,
liquidity ratio in Q2
2014 was 12.0
percentage points
above the stipulated
minimum ratio, while
the Loan-to-deposit
ratio fell below the
prescribed maximum
of 80 per cent.


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Economic Report Third Quarter

60.0 per cent for fiscal year 2014. Total borrowing by the
discount houses was N45.8 billion, while their capital and
reserves stood at N29.9 billion. This resulted in a gearing ratio of
1.5:1, compared with the stipulated maximum of 50:1 for the
fiscal year.
2.6
Capital Market Developments
2.6.1
Secondary Market
Available data indicated that developments in the Nigerian
Stock Exchange (NSE) were mixed during the third quarter of
2014. Total volume of traded securities rose by 11.4 per cent to
26.8 billion shares, while the value of traded securities rose by
48.0 per cent to N441.25 billion in 312,482 deals in the review
period, compared with 24.0 billion shares, valued at N298.19
billion in 298,869 deals in the preceding quarter. The Financial
Services Industry (measured by volume) led the activity chart
with 20.6 billion shares valued at N203.6 billion, traded in
149,030 deals. Thus, contributing 77.0 and 46.2 per cent to the
total equity turnover volume and value, respectively,
compared with 15.5 billion shares, valued at N149.6 billion in
148,745 deals recorded in the preceeding quarter. The
Banking subsector of the Financial Services sector was the
most active subsector during the review quarter.
Figure 4: Volume and Value of Traded Securities

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Value (N billion)
Volume (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)


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Table 3: Traded Securities on the Nigerian Stock Exchange (NSE)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Volume (Billion)

Value (N Billion)


2.6.3
New Issues Market
There were three (3) supplementary listings in the review
quarter (see table 4 below).
Table 4: New and Supplementary Listings on the Nigeria Stock Exchange
S/N Company
Additional Shares (Units)
Reasons
Listing

Associated Bus Tranpsort Plc
150,700,000 ordinary shares
Bonus Issue
Supplementary

Flour Mills Nigeria Plc
238,567,017 ordinary shares
Bonus Issue
Supplementary

Roads Nigeria Plc
5,000,000 Ordinary share
Bonus Issue
Supplementary

2.6.4
Market Capitalization
Aggregate market capitalization for all listed securities
(Equities and Bonds) stood at N18.9 trillion at the end of the
quarter under review, indicating a decline of 0.7 per cent
below the level in the preceding quarter. Similarly, market
capitalization for the listed equities fell by 3.0 per cent below
the level in the preceding quarter to close at N13.6 trillion at
the end of the review quarter. Listed equities accounted for
71.8 per cent of the aggregate market capitalization.

2.6.5 NSE All-Share Index
The All-Share Index, which opened at 42,482.48 at the
beginning of the quarter, closed at 41,210.1, representing a
decline of 3.0 per cent below the level at the end of the
preceding quarter. At end-September 2014, the NSE AseM,
NSE In surance, and the NSE Industrial indices rosebby 0.02, 1.6
and 3.3cent respectively, above their levels in the preceding
quarter to 951.09,149.19 and 2,754.67 while the other four
sectoral indices; NSE Oil & Gas, NSE Banking, NSE Consumer
goods, and NSE Lotus Islamic indices dropped below their
levels in the preceding quarter by 1.6,1.8, 2.4 and 5.2 per cent,
to close at 460.84, 425.15, 1032.43 and 2,725.87, respectively,
at the end of the review period .
Total market
capitalization and
All-Share Index
declined during Q3
2014.


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

Economic Report Third Quarter

Figure 5: Market Capitalization and All-Share Index


Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Index
N billion
Market Capitalization (LHS)
All-Share Index (RHS)


Table 5: Market Capitalization and All Share Index (NSE)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Market Capitalization (N trillion)

All-Share Index (Equities)
26,022.60

28,078.80

33,536.25

36,164.31

36,585.08

41,329.19

38,748.01

42,482.48

41,210.10


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

Economic Report Third Quarter

3.0
Fiscal Operations
3.1
Federation Account Operations
Available data showed that total federally-collected revenue
during the third quarter of 2014 stood at N2,685.08 billion or an
increase of 2.7 per cent, when compared with the level in the
preceding quarter. It, however, declined by 1.2 per cent when
compared with the proportionate quarterly budget estimate.
The development relative to the budget estimate was
attributed to the decline in oil revenue (Fig. 1, Table 6).
Figure 6: Components of Gross Federally Collected Revenue

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Oil Revenue Gross
Non-Oil Revenue

Table 6: Gross Federation Account Revenue (N billion)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Federally-collected revenue (Gross)

Oil Revenue

Non-Oil Revenue


At N1,723.11 billion, gross oil receipts, which constituted 64.2
per cent of the total, fell by 4.0 per cent below the receipts in
the preceding quarter. It also fell below the proportionate
budget estimate by 3.8 per cent. The development relative to
the budget estimate was attributed largely to the fall in crude
oil and gas exports during the review quarter (Fig. 2, Table 7).

Gross federally -
collected
revenue rose by
2.7
per
cent
above the level
in the second
quarter of 2014.


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

Economic Report Third Quarter

Figure 7: Gross Oil Revenue and Its Components
-


Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
N billion
Others
PPT/Royalties
Crude oil/Gas Sales

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


Non-oil receipts (gross), at N961.98 billion (35.8 per cent of the
total), rose above the proportionate budget estimate by 3.7
per cent. It also rose above the level in the second quarter of
2014 by 17.6 per cent. The increase in non-oil revenue relative
to the proportionate budget estimate was due largely to the
the sharp increases in National Information Technology
Development Fund (NITDF) and Education Tax3 (Fig. 3, Table8).

3 Education Tax and NITDF are components of other non-oil revenue
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Oil Revenue

Crude oil/Gas Sales

PPT/Royalties

Others


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

Economic Report Third Quarter

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

1,000
1,200
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
N billion
Others
Customs & Excise Duties
Companies Income Tax & Other Taxes
Value-Added Tax (VAT)

Table 8 Components of Gross Non-Oil Revenue (N billion)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Non-Oil Revenue

Value-Added Tax (VAT)

Companies Income Tax & Other Taxes

Customs & Excise Duties

Others

1/ Include FGN Independent Revenue, Education Tax, NITDF & Customs Federation/Non-Federation
Account Levies (Port, Sugar, ETLS, Steel, CISS & Cement Levies)
Of the gross federally-collected revenue during the review
quarter, the sum of N1,608.84 billion (net deductions and
transfers) was transferred to the Federation Account for
distribution among the three tiers of government and the
13.0% Derivation Fund. The Federal Government received
N765.56 billion, while the state and local governments
received N388.30 billion and N299.36 billion, respectively. The
balance of N155.62 billion went to the 13.0% Derivation Fund
for distribution among the oil-producing states. Also, the
Federal Government received N27.85 billion from the VAT Pool
Account, while the state and local governments received
N92.83 billion and N64.98 billion, respectively.
Furthermore, the sum of N71.05 billion being non-oil Excess
Revenue paid in July 2014 was shared among the three tiers
of governments as follows: Federal Government (N37.43
billion), State
Governments
(N18.98 billion), and local
The
sum
of
N1,608.84 billion
out
of
the
federally collected
revenue
was
distributed among
the three tiers of
government
and
13.0% Derivation
Fund
for
oil
producing states.


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

Economic Report Third Quarter

government (N14.64 billion).
The sum of N106.65 billion was also distributed as Subsidy ReInvestment and Empowerment Programme (SURE-P) among
the three tiers of government and the 13% Derivation Fund as
follows:
Federal
Government
(N48.88
billion),
State
Governments (N24.79 billion), Local Governments (N19.11
billion) and 13% Derivation Fund (N13.86 billion).
Meanwhile, NNPC commenced refunds to the Federal
Government with the first installment of N10.00 billion naira in
September 2014. Thus, the total allocation to the three tiers of
government in the third quarter of 2014 amounted to
N1,982.20 billion, compared with N1,926.53 billion in the
preceding quarter and the proportionate quarterly budget
estimate of N2,095.20 billion.
3.2
The Fiscal Operations of the Three Tiers of
Government

3.2.1
The Federal Government

At N924.68 billion, the Federal Government retained revenue
for the third quarter of 2014 was lower than the provisional
budget estimate by 13.3 per cent, but higher than the receipt
in the preceding quarter by 7.6 per cent. Of this amount, the
Federal Government’s share from the Federation Account,
Sure-P, VAT, FGN Independent Revenue and “Others” were
N765.56 billion, N48.88 billion, N27.85 billion, N34.96 and N47.43
billion, respectively (Fig. 4, Table 9).
Figure 9: Federal Government Retained Revenue
Federation Account (82.8%)
VAT Pool
Account (3.0)
Others(5.1%)
FGN Independent
Revenue (3.8)
Sure-P (5.3%)

Federal government
estimated
retained
revenue was higher
than the receipt in
the
preceding
quarter.


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

Economic Report Third Quarter

Table 9: Federal Government Fiscal Operations (N billion)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Retained Revenue

Expenditure

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


Total estimated expenditure for the third quarter of 2014 stood
at N971.07 billion, indicating decline of 25.8 and 1.1 per cent,
below the quarterly budget estimate and the level in the
preceding quarter, respectively. The development relative to
the proportionate quarterly budget estimate was attributed to
the decline in the capital component during the period. A
breakdown of the total expenditure showed that the recurrent
component accounted for 84.8 per cent, while capital and
statutory transfers segment accounted for 7.2 and 8.1 per
cent, repectively (Fig. 10). A further breakdown of the
recurrent expenditure showed that the non-debt component
accounted for 77.0 per cent, while debt service payments
accounted for the balance of 23.0 per cent.
Thus, the fiscal operations of the Federal Government resulted
in an estimated deficit of N46.40 billion, or 0.2 per cent of the
estimated GDP for the third quarter of 2014, compared with
N122.41 billion in the preceding quarter and proportionate
quarterly budget estimate of N241.05.

Fiscal operations of
the FG resulted in
an estimated deficit
of N46.40 billion in
Q3 2014.


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

Economic Report Third Quarter

Figure10: Federal Government Expenditure
Recurrent
Capital
Transfers
Capital
(7.2%)
Transfers
(8.0%)
Recurrent
(84.8%)

3.2.2
Statutory Allocations to State Governments

Total
allocation
to
state
governments
(including
the
Federation Account, 13.0% Derivation Fund and VAT) stood at
N694.39 billion during the review quarter. This was 0.3 per cent
higher than the level in the preceding quarter, but 4.5 per
cent, lower than the proportionate quarterly budget estimate.
Further breakdown showed that receipts from the Federation
Account was N601.56 billion (86.6 per cent), while VAT
contributed N92.83 billion (13.4 per cent). The share of
Federation Account was 0.4 per cent above the level in the
preceding quarter of 2014, but fell below the proportionate
quarterly budget estimate by 3.9 per cent. Receipts from the
VAT Pool Account fell below the level in the preceding quarter
and the proportionate quarterly budget estimate by 0.4 and
8.5 per cent, respectively.

3.2.3
Statutory Allocations to Local Government Councils

Total receipts by the local governments from the Federation
and VAT Pool Accounts during the third quarter of 2014, stood
at N398.09 billion. This was above the level in the preceding
quarter of 2014 by 2.6 per cent, but fell below the
proportionate quarterly budget estimate by 7.0 per cent. Of
the total amount, allocation from the Federation Account was
N333.10 billion (83.7 per cent), while VAT Pool Account
accounted for the balance of N64.98 billion (16.3 per cent).


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

Economic Report Third Quarter

Domestic Economic Conditions
Agricultural activities witnessed improvement in the third quarter of
2014 as a result of widespread rainfall. Crude oil production was
estimated at 1.98 million barrels per day (mbd) or 182.16 million
barrels for the quarter. The end-period inflation rate for the third
quarter of 2014, on year-on-year basis, was 8.3 per cent, compared
with 8.2 and 8.0 per cent at the end of the preceding quarter and
the corresponding quarter of 2013, respectively. The inflation rate on
a 12-month moving average basis remained at 8.0 per cent,
compared with the preceding quarter, but was 9.5 per cent at the
end of the corresponding quarter of 2013.
4.1
Agricultural Sector
Available data indicated that agricultural activities were
boosted by well distributed rainfall during the third quarter of
2014. However, prospects for increased agricultural activities in
most Northern states remained low due to insecurity that
displaced farmers. In the Northern part of the country,
activities in the sector were dominated by harvesting of
maize, yam and vegetables. The predominant agricultural
activities in the Southern states included harvesting of maize
and yam. In the livestock sub-sector, most poultry farmers
cleared broiler houses and applied disinfectant to the
surroundings to minimize the incidence of diseases associated
with wet season. Also, the sale of fattened rams increased due
to the Eid El-Kabir celebration.
A total of N3,410.0 million was guaranteed to 17,618 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the third quarter of 2014. This amount represented an increase
of 3.0 and 16.6 per cent above the levels in the preceding
quarter and corresponding period of 2013, respectively.
A sub-sectoral analysis showed that food crops obtained the
largest share of N2,369.8 million (77.2 per cent) guaranteed to
13,607 beneficiaries. This was followed by livestock, N429.8
million (8.9 per cent) guaranteed to 1,566 beneficiaries, mixed
crops had N340.6 million (8.2 per cent) guaranteed to 1,450
beneficiaries, while ‘Others’ received N111.0 million (2.8 per
cent) guaranteed to 478 beneficiaries. About N47.4 million (1.5
per cent) was guaranteed to 263 beneficiaries in the Cash
Crop sub-sector, while Fisheries sub-sector received N111.4


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

Economic Report Third Quarter

million (1.4 per cent) guaranteed to 254 beneficiaries.
Analysis by state showed that 34 states including the Federal
Capital Territory benefited from the scheme in the third
quarter of 2014, with the highest and lowest sums of N584.5
million (17.1 per cent) and N4.7 million (0.1 per cent)
guaranteed to Benue and Yobe states, respectively.
At end-September 2014, the total amount released by the
CBN under the Commercial Agriculture Credit Scheme
(CACS) to the participating banks for disbursement stood at
N240.21 billion for 320 (three hundred and twenty) projects
(Table 10). The beneficiaries included thirty state governments.


4.3
Industrial Production


4.2
Industrial Production
Industrial activities rose marginally during the third quarter of
2014 relative to the level in the preceding quarter. At 139.00
(1990=100), the estimated index of industrial production rose
marginally by 0.01 per cent a piece, compared with the levels
in the preceding quarter and the corresponding quarter of
2013, respectively. The development relative to the preceding
quarter was attributed to a marginal rise in the mining sub
sector.
Industrial activities
rose in the review
quarter due to
marginal increase
in the mining sub
sector during Q23
2014.
Table 10: Disbursement of Credit Under the Commercial Agriculture Credit Scheme (CACS)
S/N
Participating Banks
Amt Disbursed (N billion)
Number of Projects/State Governments

United Bank for Africa (UBA) Plc
41.8

Zenith Bank
39.2

First Bank of Nigeria Plc
27.2

Unity Bank Plc
22.4

Union Bank Nigeria PLC
18.2

Stanbic IBTC Bank
14.4

Sterling Bank Plc
13.2

Access Bank Plc
12.6

Fidelity Bank Plc
10.9

Skye Bank Plc
9.6

GTBank Plc
5.8

FCMB Plc.
5.4

ECOBANK
4.5

Heritage Bank Plc
3.2

Diamond Baqnk Plc
3.1

Citibank Plc
3.0

Keystone Bank
2.1

Mainstreet Bank

Wema Bank
1.1

Enterprise Bank
0.5

TOTAL
240.2

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

Economic Report Third Quarter

The estimated index of manufacturing production, at 108.45
(1990=100), fell by 0.01 and 2.19 per cent compared with the
levels in the preceding quarter and the corresponding period
of 2013, respectively. Estimated capacity utilization also fell
marginally by 0.12 percentage point to 59.88 per cent during
the review period. The development was attributed to the
significant
decline
in
power
supply
which
affected
manufacturing activities (Fig.11).
Figure 11: Manufacturing Capacity Utilization Rate

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Percent

At 147.50 (1990=100), the index of mining production rose by
0.04 and 0.34 per cent relative to the levels attained in the
preceding quarter and the corresponding period of 2013,
respectively. The increase in mining production during the
review quarter was accounted for by the increase in crude oil
and gas.
At 2,900 MW/h, estimated average electricity generation fell
by 10.8 per cent, compared with the level attained in the
second quarter of 2014. The development was attributed to
the shutdown of Utorogu and Ugheli East gas plants for
maintenance.
At 2,867 MW/h, estimated average electricity consumption fell
by 5.8 per cent, compared with the level attained in the
second quarter of 2014. The decline in electricity consumption
Actual industrial
capacity utilization
fell marginally by
0.01 percentage
point during the
review quarter.
Average electricity
generation and
consumption both
fell during the
review quarter.


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

Economic Report Third Quarter

was attributed to the fall in power generation, transmission
and distribution (Fig. 12, Table 11).
Figure 12: Index of Industrial Production (1990=100)

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Index
Mining
Electricity
All Sectors
Manufacturing

Table 11: Index of Industrial Production and Manufacturing Capacity Utilization Rate
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
All Sectors (1990=100)

Manufacturing

Mining


Capacity Utilization (%)


4.3
Petroleum Sector
Nigeria’s crude oil production, including condensates and
natural gas liquids, averaged 1.98 mbd or 182.16 million barrels
(mb) in the review quarter. This represented an increase of
0.07 mbd and 3.7 per cent, compared with the 1.91 mbd or
173.8 million barrels produced in the preceding quarter. Crude
oil export was estimated at 1.53 mbd or (140.76 million barrels)
representing an increase of 4.8 per cent compared with 1.46
mbd or 132.86 million barrels (mb) recorded in the preceding
quarter. The development owed to improved surveillance
around oil installations which had curtailed the incessant oil
theft, illegal bunkering and production shut-ins experienced in
recent
months.
Allocation
of
crude
oil
for
domestic
consumption was 0.45 mbd or 41.4 million barrels during the
Crude oil and natural
gas production
increased in the third
quarter 2014.
Crude oil export
rose in Q3 2014.


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

Economic Report Third Quarter

period under review.
At an estimated average of US$103.04 per barrel, the price of
Nigeria’s reference crude, the Bonny Light (37o API), fell by 8.2
per cent below the level in the second quarter of 2014. The
average prices of other competing crudes, namely the U.K
Brent, the West Texas Intermediate and the Forcados also fell
to US$101.77, US$96.38 and US$103.49 per barrel, compared
with
US$110.08,
US$98.74
and
US$113.07
per
barrel,
respectively, in the preceding quarter. At US$100.86 per
barrel, the average price of OPEC’s basket of eleven crude
streams fell by 4.6 and 5.7 per cent, below the average of
US$105.74/b and US$106.92/b recorded in the preceding
quarter and the corresponding period of 2013, respectively.
Saturated industrial stock levels and low refining activities in
the European Union (EU) as well as strong supply growth in
countries outside the OPEC countries (mainly from U.S. shale oil
deposits) accounted for the fall in crude oil prices. Also, weak
economic data from Europe and a strong US dollar further
contributed to the downturn in crude oil prices (Fig. 13, Table
12).
Figure13: Trends in Crude Oil Prices

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
US$ per barrel
Bonny Light
OPEC Basket


Average crude oil
prices, including
Nigeria’s Bony Light
(37o API)fell in the
international crude
oil market in Q3
2014.


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

Economic Report Third Quarter

Table 12: Average Crude Oil Prices in the International Oil Market
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q3-14
Bonny Light

OPEC Basket


4.4
Consumer Prices4
Available
data
showed
that
the
all-items
composite
Consumer Price Index (CPI) at the end of the third quarter of
2014 was 161.3 (November 2009=100), representing an
increase of 1.7 and 8.3 per cent over the levels in the
preceding
and
the
corresponding
quarters
of
2013,
respectively. The development relative to the previous quarter
was driven largely by increased demand for food; nonalcoholic beverages, housing, water, electricity, gas and other
fuel.
The urban all-items CPI at the end of the third quarter of 2014
was 160.3 (November 2009=100), indicating an increase of 1.7
and 8.4 per cent over the levels in the preceding quarter and
the corresponding period of 2013, respectively. Similarly, the
rural all-items CPI, at 162.4 (November 2009=100), representing
an increase of 1.7 and 8.3 per cent over the levels in the
preceding quarter and the corresponding period of 2013,
respectively (Fig. 14, Table 13).

4 New CPI with November 2009 = 100 as base and new weight based on the 2003/2004 Nigeria
Living Standard Survey (NLSS) was released by the National Bureau of Statistics (NBS) ON 18TH
October 2010.
The general price
level rose in Q3
2014 on account
of the increase in
the prices of food
items.


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

Economic Report Third Quarter

Figure14: Consumer Price Index

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Index
Composite
Urban
Rural

Table 13: Consumer Price Index (November 2009=100)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Composite

141.1


Urban


Rural

142.1
145.3
147.9


The inflation rate for the third quarter of 2014, on a year-onyear basis, stood at 8.3 per cent, compared with 8.2 per cent
in the second quarter of 2013. This indicated 0.1 percentage
point increase above the level in the preceding quarter. The
inflation rate on a twelve-month moving average basis
remained at 8.0 per cent, the same as in the second quarter
(Fig. 15, Table 14).
The headline
inflation (y-o-y)
stood at 8.3 per
cent in Q3 2014.


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

Economic Report Third Quarter

Figure 15: Inflation Rate

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Percent
12-Month Average
Year-on-Year


Table 14: Headline Inflation Rate (%)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
12-Month Moving Average

Year-on-Year


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Economic Report Third Quarter

5.0
External Sector Developments
Provisional data indicated that foreign exchange inflow through the
CBN in the third quarter of 2014 rose by 3.4 and 10.4 per cent above
the levels in the preceding quarter and the corresponding quarter of
2013, respectively. Outflow through the Bank, however, declined by
7.8 and 6.8 per cent below the levels in the preceding quarter and
the corresponding quarter of 2013, respectively. Total non-oil export
receipts by banks rose significantly by 69.0 and 62.5 per cent above
the levels in the preceding quarter and the corresponding quarter of
2013, respectively. Relative to the preceding quarter, the average
Naira exchange rate at the rDAS vis-à-vis the US dollar, appreciated
marginally by 0.02 per cent to N157.29 per dollar. At the BDC
segment of the market, the average naira exchange rate, at
N168.90 vis-à-vis the dollar, however, depreciated by 0.5 per cent,
relative to the level in the preceding quarter. Similarly, at the interbank segment, the average naira exchange rate, relative to the
preceding quarter, depreciated to N162.39 per dollar. The gross
external reserves rose by 2.5 per cent to US$38.28 billion, compared
with its level at the end of the preceding quarter.
5.1
Foreign Exchange Flows
Provisional data indicated that foreign exchange inflow
through the CBN in the third quarter of 2014 amounted to
US$13.09 billion, representing an increase of 3.4 and 10.4 per
cent above the levels in the preceding quarter and the
corresponding quarter of 2013, respectively. The development
was due to increase in the non-oil component driven mainly
by increases in swaps transactions and inflows through other
official receipts, respectively. Foreign Exchange Outflow
amounted to US$11.80 billion, showing a decline of 7.8 and 6.8
per cent below the levels in the preceding quarter and the
corresponding quarter of 2013, respectively. The fall in outflow,
relative to the preceding quarter, was attributed to the
decline in rDAS utilization and other official payments. The
development resulted in a net inflow of US$1.29 billion,
compared with US$0.14 billion and $0.81 billion recorded in the
preceding quarter and the corresponding quarter of 2013,
repsetcively (Fig.16, Table 15).


Foreign exchange
inflow through
the CBN rose by
3.4 per cent but
outflow declined
by 7.8 per cent,
resulting in a net
inflow of US$1.29
billion in Q3 of
2014.


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

Economic Report Third Quarter

Figure 16: Foreign Exchange Flows Through the CBN


Table 15: Foreign Exchange Flows Through the CBN (US$ million)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Inflow
13,444.07

11,168.38

10,304.46

9,442.91

11,857.35

9,465.52

10,221.43

12,667.31

13,125.89

Outflow
8,668.74

7,817.12

6,313.04

12,542.53

12,667.33

10,789.61

15,695.66

12,806.25

12,231.88

Netflow
4,775.33

3,351.26

3,991.42

(3,099.62)

(809.98)

(1,324.09)

(5,474.23)

(138.94)

894.01


Provisonal data on aggregate foreign exchange flows
through the economy indicated that total inflow amounted to
US$44.18 billion, representing an increase of 12.4 and 14.6 per
cent above the levels in the preceding quarter and the
corresponding quarter of 2013, respectively. The development
was attributed , largely, to the increase in non-oil receipts
through autonomous sources. Oil sector receipts, which
accounted for 22.5 per cent of the total, stood at US$9.95
billion, compared with the US$11.21 billion and US$9.52 billion
recorded
in
the
second
quarter
of

and
the
corresponding quarter of 2013, respectively.
Non-oil public sector inflow, at US$3.14 billion (7.1 per cent of
the total) rose by 115.1 and 34.2 per cent above the levels in
the preceeding quarter and the corresponding quarter of
2013, respectively. Autonomous inflow, which accounted for
Autonomous inflows
into the economy
rose by 16.9 per cent
in Q3 2014 .
-10,000
-5,000


Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
US$ million
Inflow
Outflow
Netflow


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Economic Report Third Quarter

70.4 per cent of the total, rose by 16.9 per cent above the
level in the second quarter of 2014.
At US$12.33 billion, aggregate foreign exchange outflow from
the economy, declined by 5.7 and 7.7 per cent below the
levels in the preceding quarter and the corresponding quarter
of 2013, respectively. The decline, relative to the preceding
quarter, was accounted for, mainly, by reduction in BDC sales.
Overall, a net inflow of US$31.86 billion was recorded in the
second quarter of 2014, compared with US$26.24 billion and
US$25.21
billion
in
the
preceding
quarter
and
the
corresponding quarter of 2013, respectively.
5.2
Non-Oil Export Earnings by Exporters
Total non-oil export earnings by Nigerian exporters during the
third quarter of 2014 stood at US$4.29 billion, indicating an
increase of 69.0 and 62.5 per cent above the the levels in the
preceding quarter and the corresponding quarter of 2013,
respectively. The development, relative to the preceding
quarter, was attributed the increase in agricultural sector
receipts. A breakdown of the proceeds showed that
manufactured
products,
agricultural
products,
industrial
sector, minerals, and food products earned US$0.50 billion,
US$3.37 billion, US$0.35 billion, US$0.04 billion, and US$0.03
billion, respectively.
The shares of manufactured products, agricultural products,
industrial sector, minerals and food products in non-oil export
proceeds were 11.6, 78.6, 8.2, 1.0 and 0.6 per cent,
respectively.
5.3
Sectoral Utilisation of Foreign Exchange

Available data indicated that the invisible sector accounted
for the bulk (53.6 per cent) of total foreign exchange
disbursed in the third quarter of 2014, followed by mineral and
oil sector (15.7 per cent). Other beneficiary sectors, in a
descending order included: industrial sector (14.3 per cent),
manufactured products (7.5 per cent), food products (6.2 per
cent), transport sector (2.0 per cent) and agricultural products
(0.7 per cent) (Fig.17).
.
The invisible
sector accounted
for the bulk of the
total foreign
exchange
disbursed during
Q3 2014.
Total non-oil
export earnings by
exporters rose
during the third
quarter of 2014.


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Economic Report Third Quarter

Figure17: Sectoral Utilisation of Foreign Exchange


Percent of Total
Q1-14
Q2-14
Q3-14

5.4
Foreign Exchange Market Developments
Foreign exchange demand by the authorized dealers in the
review quarter was estimated at US$11.10 billion, indicating a
decline of 0.8 per cent below the level in the preceding
quarter, but showed an increase of 9.3 per cent above the
level in the corresponding quarter of 2013. The development,
relative to the preceding quarter was due to decline in BDC
demand in the review quarter. The sum of US$10.20 billion was
sold by the CBN during the review quarter, indicating a
decrease of 5.8 and 7.4 per cent below the levels in the
preceding quarter and the corresponding quarter of 2013,
respectively (Fig. 18, Table 16).
Figure 18: Demand for and Supply of Foreign Exchange

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
US$ billion
Forex Sales at rDAS
Forex Demand at rDAS
Supply of Forex to BDC
Total Forex Supply


Demand and supply
of foreign exchange
by authorized dealers
fell during Q3 2014.


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Table 16: Demand for and Supply of Foreign Exchange (US$ billion)
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Forex Sales at RDAS

Forex Demand at RDAS

Supply of Forex to BDC

Total Forex Supply(BDC and RDAS)


Under the rDAS, the average exchange rate of the naira vis-àvis the US dollar remained unchanged at N157.29 per US
dollar, but appreciated marginally by 0.02 per cent above the
level in the corresponding quarter of 2013. At the bureau-dechange segment of the market, the naira traded at an
average of N168.90 per US dollar, indicating a depreciation
0.5 and 3.7 per cent relative to the levels in the preceeding
quarter and the corresponding quarter of 2013, respectively.
Similarly, at the inter-bank segment, the naira exchanged at
an average of N162.39 to the US dollar, indicating a
depreciation of 0.1 and 0.6 per cent against the levels in the
preceding quarter and the corresponding quarter of 2013,
respectively (Fig. 19, Table 17).
The premium between the rDAS and the bureau-de-change
rates widened to 7.4 per cent from 6.9 per cent in the second
quarter of 2014. Simialrly, the premium between the rDAS and
inter-bank remained unchanged at 3.2 per cent in the period
under review (Fig. 20, Table 17).
The average naira
exchange rate visà-vis the US dollar
at the rDAS
remained
unchanged , while
it depreciated at
BDC and the
interbank
segments of the
foreign exchange
market in Q3
2014.
The premium
between the
rDAS and the
BDC rates
widened,while
it remained
unchanged at
the rDAS and
the interbank
rates
narrowed in
the review
quarter.


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Figure 19: Average Exchange Rate Movements

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
N/US $
Average WDAS/RDAS
Average BDC
Average Interbank


Table 17: Exchange Rate Movements and Exchange Rate Premium
Average Exchange Rate (N/US$)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
rDAS

BDC

Interbank

Premium (%)
rDAS/BDC

RDAS/Interbank


Figure 20: Exchange Rate Premium

Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Per cent
WDAS/BDC
WDAS/Interbank


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5.5
Gross External Reserves
Gross external reserves at the end of the third quarter of 2014
stood at US$38.29 billion, indicating an increase of 2.5 per
cent, compared with the level recorded at the end of the
second quarter of 2014. A breakdown of the reserves showed
that CBN reserves stood at US$29.65 billion (77.4 per cent),
Federation reserves, US$4.47 billion (11.7 per cent) and the
Federal Government reserves, US$4.16 billion (10.9 per cent)
(Fig. 21, Table 18).
Figure 21: Gross External Reserves


Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
US$ million


Table 18: Gross External Reserves (US$ million)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
External Reserves
40,636.8

43,830.4

47,884.1

44,957.0

44,108.5

42,847.3

37,376.4

37,330.0

38,288.5


Gross external
reserves rose
during the
second quarter
2014.


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Economic Report Third Quarter

6.0 Global Economic Conditions
6.1 Global Output
The World Economic Outlook (WEO) released by the
International Monetary Fund (IMF) for the period under review,
revised growth in global output forecast for 2014 to 3.3 per
cent from 3.4 per cent and 3.8 per cent for 2015 from 4.0 per
cent. The downward review was attributed to economic
developments in the United States, the euro area, Japan, and
emerging market economies. Growth in United States of
America (US) was estimated at 2.3 per cent from 2.8 per cent
in 2014 and 3.1 per cent for 2015. The upward revision of US
estimates was attributed to second-quarter domestic product
(GDP) growth of 4.0 per cent, which was above the consensus
estimate of 2.9 per cent, largely propelled by relatively strong
gains in key cyclical private sectors, such as goods
(manufacturing) and construction. In the euro area, output
growth was revised downward to 0.8 per cent in 2014 and 1.3
per cent in 2015. Weak economic recovery is expected in the
euro area, supported by a reduction in fiscal drag,
accommodative monetary policy and improving lending
conditions.
In Japan, the growth estimate was also revised downwards to
0.9 per cent and 0.8 per cent in 2014 and 2015, respectively.
The
downward
revision
reflects
larger-than-expected
contraction of GDP in the second quarter, largely influenced
by the April consumption tax hike. Despite the downward
revision in the estimated growth of the euro area and Japan,
growth in advanced economies is expected to be solid. The
growth will be driven by both consumption and business
investments as a result of improving credit and financial
market conditions, and healthy corporate balance sheets.
Growth estimate for emerging markets and developing
economies was also reviewed downwards to 4.4 per cent and
5.0 per cent (which represents -0.1 and -0.2 decline per cent)
in 2014 and 2015, respectively. The downward revision reflects
both a weaker first-half outturn for 2014 and some structural
factors that persist. Growth for Latin America and the
Caribbean is projected to fall to 1.3 per cent in 2014, with a
rebound to 2.2 per cent in 2015. The projection were


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Economic Report Third Quarter

influenced by external factors such as weaker-than expected
export performance amid deteriorating terms of trade, and a
variety of idiosyncratic domestic constraints.
Growth in emerging and developing Europe is projected to
remain stable at 3.0 per cent in 2014 and 2015. The revision
reflects
strengthening
private
consumption
and
robust
domestic demand. Growth in Sub-Saharan Africa was revised
downwards to 5.1 per cent and 5.8 per cent for 2014 and
2015, respectively. This reflects industrial tensions and delays in
fixing infrastructure gaps.
6.2 Global Inflation
Available data from the latest World Economic Outlook
estimates global inflation at 3.4 per cent in the third quarter of
2014, down from the 3.5 per cent estimated in the preceding
quarter. Inflation generally remained below central bank
policy targets in advanced economies, an indication that
many of these economies have substantial output gaps. In
the euro area, inflation fell below expectation, while some
countries with unemployment rate greater than the area-wide
average, experienced mild deflation. However, the United
States continues to move towards recovery as inflation rose
modestly at the end of the third quarter. In Japan, though,
both headline and core inflation rates were estimated to have
remained stable they are largely, below the Bank of Japan’s
inflation target.
6.3 Global Commodity Demand and Prices
World crude oil demand was estimated at 91.96 mbd in the
third quarter of 2014, representing an increase of 2.1 per cent
above the 90.11 per cent recorded in the second quarter of
2014. World crude oil supply was estimated at an average of
92.11 mbd, representing an increase of 0.9 per cent above
the level recorded in the preceding quarter. Of the total
demand, the Organisation for EEconomic Co-opertaion and
Development (OECD) countries accounted for 45.96 mbd,
while non-OECD countries accounted for the balance of 46.00
mbd. Improved economic activities in China, Brazil and Saudi
Arabia also contributed to crude oil demand growth.
The OPEC Reference Basket price of eleven selected crude
streams stood at $100.86 per barrel in the third quarter of 2014,


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Economic Report Third Quarter

compared with $105.74/b and US$106.92/b recorded in the
preceding quarter and the corresponding quarter of 2013,
respectively. Saturated industrial stock levels, low refinining
activities and weak economic data in the European Union
(EU) as well as strong dollar contributed to the downturn in
crude oil prices.
The prices of the UK Brent, the West Texas Intermediate and
the Forcados, also declined to close at US$101.77, US$96.38
and US$103.49 per barrel, respectively.
6.4
International Financial Markets
Developments across global financial markets were mixed
during the third quarter of 2014 as reflected in the major
indices. In North America, the S&P 500 and Mexico Bolsa
indices increased by 0.6 and 5.3 per cent, respectively, while
the S&P/TSX Composite Index declined by 1.2 per cent. In
South America, the Brazilian Bovespa and Argentine Merval
indices increased by 1.8 and 63.4 per cent, respectively, while
the Columbian COLCAP index data declined by 2.4 per cent.
The U.S. stocks modestly rose as a result of improvement in the
strength of the dollar against most currencies.
European stocks declined in the midst of weak economic
growth,
increasing
deflationary
pressures
and
a
fast
depreciating euro. In Europe, the UK’s FTSE 100, France’s CAC
40, Germany’s DAX, and Russia’s MICEX indices declined by
1.8, 0.1, 3.7 and 4.4 per cent, respectively.
In Asia, India’s BSE Sensex, Japan’s Nikkei 225 and China’s
Shanghai Stock Exchange-A indices increased by 6.7, 15.4
and 4.8 per cent, respectively.
In Africa, the Kenyan Nairobi NSE 20 and Egyptian EGX CSE 30
indices increased by 7.6 and 20.2 per cent, respectively, while
the Nigerian All-Share Index, South African JSE AS and
Ghanaian GSE All-Share indices declined by 3.0, 3.2 and 5.6
per cent, respectively. In Nigeria, the decline in share prices
could be attributed to investors’ perception of the economy
and financial markets in the run up to the 2015 elections.
\


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6.5 Other International Economic Developments
and Meetings
Other major international economic developments and
meetings of importance to the domestic economy during the
review quarter included: the 2014 Mid-year statutory meetings
of the West African Monetary Zone (WAMZ) held in Abuja,
Nigeria from July 14 – 17, 2014. The meetings were attended
by Member Central Banks, Ministries, Departments and
Agencies as well as ECOWAS Commission and other regional
institutions. At the end of deliberations, the meeting decided
as follows:

That the level of macroeconomic convergence, legal
and Institutional preparedness for the successful launch
of the monetary union on January 1, 2015 was
inadequate;

Urged member states to work assiduously to meet the
target date of 2020 for a full implementation of the
region’s monetary integration in line with the Decision
of the Authority;

Noted the Decision of the ECOWAS Heads of State and
Government endorsing the single-track approach to
monetary union by 2020,

Directed
the
West
Africa
Monetary
Institute
to
implement
the
revised
ECOWAS
set
of

macroeconomic
convergence
criteria
during
subsequent surveillance missions; whilst taking steps to
bring to the attention of the Authority concerns
regarding the reclassification of the central bank
financing of fiscal deficit criterion;

Encouraged the ECOWAS Commission to fund the
activities under the Roadmap of ECOWAS single
currency programme;
Similarly, the 29th meeting of Board of Governors of the West
African Institute for Financial and Economic Management
(WAIFEM) held on July 16, 2014. The meeting was preceded by
the 32nd Meeting of the Technical Committee which held on
July 13, 2014. The meeting deliberated and approved several
reports based
on recommendations
of the
Technical
Committee.


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Furthermore, the First United States – Africa Leaders’ Summit
was held in Washington D.C., USA from August 4 – 6, 2014. The
theme of the Summit was "Investing in the Next Generation”.
The summit which was an effort to strengthen US ties with
Africa, primarily focused on trade, investment and security of
the continent. The United States President Barack Obama
announced on August 6, 2014 that US companies pledged
$14 billion of investment in Africa in areas such as energy,
infrastructure,
agriculture,
construction,
banking,
and
information technology.


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APPENDIX TABLES


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

Economic Report Third Quarter

Table A1: Money and Credit Aggregates

1/ Quasi money consist of Time, Savings and Foreign Currency Deposit at Deposit Money Banks excluding Taking from Discount Houses.

2/ Demand Deposit consist of State, Local and Parastatals Deposits at CBN, State, Local Government and Private Sector Deposits as well
as Demand Deposits of non-financial Public Enterprises at Deposit Money Banks.


Jun-13
Sep-13
Dec-13
Mar-14
Jun-14
Sep-14
Domestic Credit (Net)

Claims on Federal Government (Net)

Central Bank (Net)

Banks

Claims on Private Sector

Central Bank

Banks

Claims on Other Private Sector

Central Bank

Banks

Claims on State and Local Government

Central Bank

DMBs

Claims on Non-financial Public Enterprises

Central Bank

DMBs and Non Interest Banks

Foreign Assets (Net)

Central Bank

DMBs and Non Interest Banks

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

Banks' Deposit with CBN

N billion


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Table A2: Money and Credit Aggregates (Growth Rates)
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Government

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

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Governments

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

Other Asset (Net)


7.39
Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Percentage Change Over Preceding Quarter
Percentage Change Over Preceding December

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


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Table A3: Federal Government Fiscal Operations (N billion)
Q3-12
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Retained Revenue

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Crude

Others/SURE-P

Expenditure

Recurrent

Capital

Transfers

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


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