CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
`

CBN ECONOMIC REPORT

Half Year


i

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

Central Bank of Nigeria

2021 Half Year Economic Report


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Central
Bank
of
Nigeria
Corporate Head Office

Tafawa
Balewa
Way
Central Business District
P.M.B. 0187
Garki, Abuja
Website: www.cbn.gov.ng

Contact Centre
Tel: +234 (0) 700 225 5226
©2021 Central Bank of Nigeria
ISSN 1597-2976


iii


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
GOVERNANCE FRAMEWORK
Members of the Monetary Policy Committee (MPC) as at 30 June 2021

Godwin I. Emefiele, CON

Governor (Chairman)

Aisha N. Ahmad

Deputy Governor (Financial System Stability)

Edward L. Adamu

Deputy Governor (Corporate Services)

Folashodun A. Shonubi

Deputy Governor (Operations)

Kingsley I. Obiora

Deputy Governor (Economic Policy)

Mike I. Obadan

Member

Adeola F. Adenikinju

Member

Robert C. Asogwa

Member

Aliyu R. Sanusi

Member

Ahmed Aliyu

Member

Hassan Mahmud

Secretary


Members of the Committee of Governors
1 Godwin I. Emefiele, CON
- Governor (Chairman)
2 Aisha N. Ahmad
- Deputy Governor (Financial System Stability)
3 Edward L. Adamu
- Deputy Governor (Corporate Services)
4 Folashodun A. Shonubi
- Deputy Governor (Operations)
5 Kingsley I. Obiora
- Deputy Governor (Economic Policy)

Alice Karau
- Secretary to the Board


iv


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


List of Departmental Directors as at 30 June 2021

Samuel C. Okojere
-
Banking Services

Haruna B. Mustafa
-
Banking Supervision

Aisha B. Abubakar
-
Capacity Development

Alice Karau
-
Corporate Secretariat

Ahmed B. Umar
-
Currency Operations

Philip Y. Yusuf
-
Development Finance

Benjamin A. Fakunle
-
Finance

Angela A. Sere-Ejembi
-
Financial Markets

Kevin N. Amugo
-
Financial Policy and Regulation

Jeremiah Abue
-
Governors

Umma A. Dutse
-
Human Resources

Rakiya S. Mohammed
-
Information Technology

Lydia I. Alfa
-
Internal Audit

Sirajuddin K. Salam-Alada
-
Legal Services

Hassan Mahamud
-
Monetary Policy

Abubakar A. Kure
-
NIRSAL Microfinance Bank

Nkiru E. Asiegbu
-
Other Financial Institutions Supervision

Musa I. Jimoh
-
Payments System Management

Arinze A. Stanley
-
Procurement and Support Services

Michael A. Adebiyi
-
Research

Abba Salihi
-
Reserve Management

Folakemi J. Fatogbe
-
Risk Management

Oluwakemi O. Osa-Odigie
-
Security Services

Mohammed M. Tumala
-
Statistics

Clement O. Buari
-
Strategy Management

Ozoemena S. Nnaji
-
Trade and Exchange

Olorunsola E. Olowofeso
-
West African Monetary Institute


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CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


List of Branch Controllers/Currency Officers as at 30 June 2021

Christopher O. Adayi
-
Abakaliki

Wahab Oseni
-
Abeokuta

Ibeawuchi F. Amagwu
-
Abuja

Wasiu A. Omotoso
-
Ado-Ekiti

Fatai A. Yusuf
-
Akure

Patricia N. Ukwu
-
Asaba

Benedicth I.C. Maduagwu.
-
Awka

Haladu A. Idris
-
Bauchi

Renner D. Jumbo
-
Benin

Mannir D. Abdullahi
-
Birnin-Kebbi

Glory U. Iniunam
-
Calabar

Gana A. Abdulkadir
-
Damaturu

Sa'adatu A. Ibrahim
-
Dutse

Chiedozie E. Okonjo
-
Enugu

Shehu A. Goringo
-
Gombe

Babangida Jino
-
Gusau

Olufolake M. Ogundero
-
Ibadan

Babatunde A. Amao
-
Ilorin

Idirisa D. Maina
-
Jalingo

Yusuf B. Duniya
-
Jos

Ahmed M. Wali
-
Kaduna

Abdulkadir I. Ali
-
Kano

Dahiru. N. Usman
-
Katsina

Samson Isuwa
-
Lafia

Atise J. Ekhator
-
Lagos

Ahmed I. Sule
-
Lokoja

Tijani K. Lawan
-
Maiduguri

John O. Itaha
-
Makurdi

Mas'ud T. Ibrahim
-
Minna

Ajuma D. Madojemu
-
Osogbo

Chuks G. Okeke
-
Owerri

Oyoburuoma B. Oruwari
-
Port Harcourt

Yusuf B. Wali
-
Sokoto

Onyeka M. Ogbu
-
Umuahia

Itohan M. Ogbomon-Paul
-
Uyo

Francis E. Asuquo
-
Yenagoa

Satu J. Jatau
-
Yola


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CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


CONTENTS


GOVERNANCE FRAMEWORK

iii


Members of the Committee of
Governors


iii


Members of the Monetary Policy
Committee (MPC)


iii


List of Departmental Directors

iv


List of Branch
Controllers/Currency Officers

v


EXECUTIVE SUMMARY

viii


SERVING THE NIGERIAN PEOPLE


DELIVERING ON
THE CBN’s
MANDATE

THE GLOBAL
ECONOMY


•
The CBN’s Mandate

•
CBN Strategic
Priorities

Output Growth

Inflation

Financial Markets

Commodity Prices

Central Banks’
Response

Fiscal Measures

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CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


MACRROECONOMIC PERFORMANCE

OUTLOOK

ADDITIONAL
INFORMATION


•
Monetary Policy

•
Global outlook

•
Regional
Meetings
•
Non-Regional
Meetings

•
The Real Economy

•
Domestic
outlook

•
Fiscal Developments

•
Financial Developments

•
Payments System
Management

•
External Sector Development

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CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
EXECUTIVE SUMMARY
The Global Economy: The global economy
recovered modestly in the first half of 2021,
driven, largely, by sustained fiscal stimulus,
supportive monetary policy and a gradual easing
of COVID-19 restrictions, following a progressive
rollout of COVID-19 vaccines. The development
was reflected in the IMF’s output forecasts of 6.0
per cent for the global economy in 2021, as
against the 3.2 per cent contraction recorded in
2020. Purchasing Managers’ Index (PMI) in most
countries was largely above the 50-points
threshold due to increased manufacturing
activities. However, reintroduced restrictions in
some economies amid rising cases of the Delta
variant of the COVID-19, and rising input costs
could hurt the economic recovery. Inflationary
pressures in both advanced and emerging
economies remained elevated due to weak global
supply chains. Despite heightening inflationary
pressures, most central banks and fiscal
authorities maintained an accommodative policy
stance to support the fragile recovery.
The Real Economy: Domestic output rebounded in
the first half of 2021, following the re-start of
business activities in many of our trading partner
economies, the implementation of various
stimulus packages by fiscal and monetary
authorities, and the roll-out of COVID-19 vaccines
that helped to restore confidence and boost
business activities. Domestic growth was driven
by the non-oil sector, even as the oil sector
contracted further relative to end-December
2020. In general, domestic output grew by 2.70
per cent in the first half of 2021, compared with a
2.18 per cent contraction in the corresponding
period of 2020.
Inflationary pressure heightened in the domestic
economy, during the first half of 2021. Headline
inflation rose to 17.75 per cent at the end-June
2021, compared with 12.56 per cent at end-June
2020. The development was attributed mainly to
a disruption in the food supply chain arising from
the security challenges, and an increase in the
cost of transportation/logistics.
Domestic crude oil production declined due to
persisting supply constraints. At an average daily
production of 1.7 million barrels per day (mbpd)
or 262.8 million barrels (mb), Nigeria’s crude oil
output in the first half of 2021 declined by 22.6
per cent, compared with the corresponding half
of 2020. In the first half of 2021, crude oil prices
rose due to the increase in crude oil demand,
occasioned by the gradual normalisation of the
economies in most countries of the world. The
average spot price of Nigeria’s reference crude,
the Bonny Light, was US$64.81 per barrel, (pb),
an increase of 59.6 per cent, compared with
US$40.60 pb in the corresponding period of 2020.
The Bank sustained its development finance
interventions to the real sector to boost economic
recovery, improve access to credit and enhance
job creation. The Bank extended the interest rate
concession and moratorium on all interventions
to February 28, 2022, as part of policy measures
to mitigate the effect of the COVID-19 pandemic
on businesses and households.
Fiscal
Developments:
Federation
revenue
improved moderately due to a rebound in
economic activities. Total Federation revenue in
the first half of 2021 was 8.3 per cent above the
level in the corresponding period of 2020, driven
by enhanced non-oil revenue. However, at
N5,050.10 billion (6.4 per cent of GDP), it was
18.7 per cent below the benchmark, due to lower-


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CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
than-expected receipts of crude oil and gas export
proceeds.
Despite the rise in crude oil prices and sustained
increase in global demand, oil revenue in the first
half of 2021, at N2,100.40 billion (about 2.7 per
cent of GDP), accounted for 42.0 per cent of total
revenue and was below the benchmark by 30.8
per cent due to low crude oil production. Similarly,
non-oil revenue at N2,949.69 billion (3.7 per cent
of GDP) in the first half of 2021 was 5.2 per cent
below the budget benchmark, owing to the
decline in Education Tax and the Independent
Revenue of the Federal Government. The
consolidated
debt
stock
of
the
Federal
Government, at end-June 2021, was N31,342.68
billion. This represents an increase of 16.9 per
cent over the level at end-June 2020. Given the
debt-GDP-ratio thresholds stipulated by the 20202023 MTDS at (40.0 per cent), WB/IMF (55.0 per
cent) and ECOWAS (70.0 per cent), the FGN’s
debt-to-GDP at 19.8 per cent, remained below
adequate
Financial Developments: The financial sector
remained resilient during the first half of 2021, as
the key financial soundness indicators were within
regulatory thresholds. The banking industry
solvency and liquidity positions under mild-tomoderate scenarios of sustained economic
contraction remained robust but, was vulnerable
in a severe scenario of sustained economic
contraction. During the review period, the CBN
continued to ease credit conditions and support
critical sectors of the economy. Growth in
monetary aggregates remained, largely, below
indicative targets for 2021. Broad money supply
(M3) grew by 2.1 per cent to N39,406.65 billion at
end-June 2021, due to an increase in domestic
claims, compared with 2.6 per cent growth at
end-June 2020.
Liquidity levels in the financial sector were
influenced by monetary and fiscal operations,
including the effects of Cash Reserve Requirement
(CRR), foreign exchange settlement interventions,
and CBN Bills maturity. Average interbank money
market rates in the first half of 2021 were higher
than their levels in the corresponding period of
2020, following liquidity constraints in the
banking system.
The Nigerian Stock Exchange (NSE) was
demutualised to the Nigerian Exchange Group
(NGX) to enhance access to capital for strategic
development. Activities on the Nigerian equities
market were bullish in the first half of 2021, as the
NGX All Share Index (ASI) and aggregate market
capitalisation rose relative to their levels at the
end-June 2020. This was due to positive
sentiments by investors, amid increased buyinterest in blue-chip stocks.
During the review period, new initiatives were
introduced to enhance the payments system,
maximise the opportunities created by the
pandemic,
and
support
monetary
policy
transmission through the banking system. These
include issuing the frameworks for Regulatory
Sandbox Operations, as well as Open Banking,
and Quick Response (QR) Code payments.
External Sector Developments: The external
account was fragile in the first half of 2021 with
an overall balance of payments deficit of US$3.49
billion or 1.8 per cent of GDP. This was occasioned
by higher services import bills, rising external
debt, and exchange rate pressure. The current
account deficit narrowed significantly by 68.2 per
cent in the first half of 2021, compared with the


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CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
corresponding period of 2020, driven largely by
lower trade deficit and higher remittances inflow.
The financial account recorded net incurrence of
financial liabilities of US$3.94 billion or 2.0 per
cent of GDP, compared with US$4.63 billion in the
corresponding half of 2020. The development was
due, largely, to improvement in foreign capital
inflow. The International Investment Position (IIP)
recorded a higher net liability due to increased
portfolio accumulation and other investment
liabilities.
Gross external reserves at end-June 2021 stood
at US$32.99 billion, compared with US$35.78
billion at end-June 2020. This could finance about
8 months of import (goods only) or about 6
months of import (goods and services), which
exceeded the international adequacy standard of
3.0 months.
With the adoption of the Nigerian Autonomous
Foreign Exchange (NAFEX) as the official
exchange rate in May 2021, the end-period
exchange rate of the naira to the US dollar at the
interbank, and I&E window were N403.80/US$,
and N411.50/US$, respectively, at the end-June
2021,
compared
with
N361.00/US$
and
N386.50/US$, respectively at end-June 2020.
Outlook: Global economic outlook for the rest of
2021 indicate optimism on account of the
projected increase in the pace of COVID-19
vaccination and the effect of fiscal and monetary
accommodation. Similarly, the economic outlook
for Nigeria remained positive, as growth
momentum
is
expected
to be sustained
throughout 2021, owing to the continued
progress in the containment of the COVID-19
pandemic, improvement in crude oil prices,
sustained
monetary
policy
support,
and
continued fiscal impetus.
With the global crude oil price projected at
around $75pb in the second half of 2021, the
outlook for the external sector continued to
brighten, as both the external reserves and
portfolio investment are expected to improve in
the short-to-medium term. However, the
speculation-induced demand pressure in the
foreign exchange market, rising import bills, and
external debt servicing constitute potential
headwinds to reserves accretion in the near term.
With the stable and sustained recovery in crude
oil prices and continued implementation of FGN’s
Strategic Revenue Growth Initiative (SRGI),
prospects for the fiscal sector is expected to
improve in the rest of the year. However, it could
be dampened by the continued rise in debt service
obligations, and lingering insecurity challenges.
The financial sector is expected to remain resilient
as accommodative monetary policy stance,
regulatory forbearance, and the Global Standing
Instruction (GSI), continue to strengthen risk
management practices and support the financial
sector.


xi

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


•Be the model central bank
delivering price and financial
system stability and promoting
sustainable economic
development.
Vision
Become the model central bank 1
Deliver price stability conducive to
economic growth 2
Achieve safe, stable, and sound financial
system 3
Deliver credible, reliable, and efficient
payments system 4
Promote sustainable finance and inclusive
economic growth 5
• To be proactive in providing a stable
framework
for
the
economic
development of Nigeria, through the
effective, efficient and transparent
implementation
of
monetray
and
exchnage
rate
policies,
and
management of the financial sector.
Mission
Mandate
(CBN Act 2007)
• Ensure monetary and price stability
• Issue legal tender currency in Nigeria
• Maintain external reserves to safeguard
the international value of the legal
tender currency
• Promote a sound financial system in
Nigeria
• Act as Banker and provide economic and
financial advice to the Federal
Government.
Established by the CBN Act 1958
(as amended)
Commenced operation 1 July 1959
THE CENTRAL
BANK OF
NIGEIRIA

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


CBN Strategic Priorities (2019 – 2024): 5-Point Agenda
Foster the Development of a Robust
Payments System
Conserve the utilization of reserves
for critical raw materials and imports
that are not produced locally
Improve consumer spending and
investment by MSMEs through
affordable and adequate credit
Grow our External Reserves
Improve Access to Credit
Promote inclusive growth and
private sector investment by
leveraging on monetary tools to
maintain a low inflation environment
while trying to seek exchange rate
stability
Preserving macroeconomic and
financial stability
Drive the cashless initiative across
the country to enhance efficiency
and propel the financial inclusion
drive
Diversify the Economy through
intervention programmes
Boost productivity growth in both
the agricultural and manufacturing
sectors through end-to-end value
chain credit intervention
programmes

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Section Two


Global economic dynamics and the evolution of events shaped
domestic economies around the world.
❖ Global Output Growth
❖ Global Inflation
❖ Global Financial Markets
❖ Central Banks’ Responses
❖ Fiscal Measures

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

2.1 GLOBAL OUTPUT GROWTH
The global economy rebounded in the first half of
2021, driven largely, by sustained fiscal injections,
accommodative monetary policies, and the
gradual
easing
of
COVID-19
restrictions,
following a progressive rollout of vaccines.
Notable progress in vaccination and the resultant
easing of lockdown measures across the globe,
coupled with several fiscal and monetary
interventions,
spurred
economic
activities.
However, growth was largely divergent across
countries and regions, due to unequal access to
vaccines, the volume of interventions, and preexisting structural rigidities. The optimism
around global recovery in 2021 was reflected in
the IMF’s output and trade volume forecasts of
6.0 per cent and 9.7 per cent, respectively,
against contractions of 3.2 per cent and 8.3 per
cent in 2020.


Table 1: Growth and Inflation in Selected Countries
Country
Growth

Inflation

2021f
2022f

Jan

Feb

Mar

Apr

May

Jun

Global
-3.2
6.0
4.9


Advanced
Economies
-4.6
5.6
4.4


United States
-3.5
-7.0
4.9


United Kingdom
-9.8
7.0
4.8


Japan
-4.7
2.8
3.0


Germany
-4.8
3.6
4.1


Italy
-8.9
4.9
4.2


Emerging
Market &
Developing
Economies
-2.1
6.3
5.2


Russia
-3.0
4.4
3.1


China
2.3
8.1
5.7


India
-7.3
9.5
8.5


Sub-Saharan
Africa
-1.8
3.4
4.1


South Africa
-7.0
4.0
2.2


Nigeria
1.8
2.5
2.6


Source: IMF WEO, July 2021 and Trading Economics, ‘f’ indicates projections.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

Advanced Economies (AEs)
Growth in advanced economies was robust due,
largely, to significant improvement in consumer
demand and sustained policy interventions.
Output in AEs was projected to expand by 5.6 per
cent in 2021, against a contraction of 4.6 per cent
in 2020. The growth projections for the region
are further reflected in their impressive PMI
numbers year-to-date. The PMI numbers were
largely above the 50 index-points threshold in
most countries as manufacturing activities
increased. Specifically, the US, Italy, and Germany
led the group with PMIs of 60 and above. The
significant boost to the PMIs reflected the surge
in consumer and business confidence, following
the
fiscal
stimulus
and
monetary
accommodation, paired with the faster pace of
COVID-19 vaccination in the region.
Table 2: Selected Countries' PMIs

2020 H1
2020 H2
2021 H1
United States
46.0
54.0
60.3
United Kingdom
45.5
55.2
59.8
China
48.8
53.4
51.4
India
44.5
54.4
54.2
Germany
42.4
55.7
63.3
Italy
43.7
52.7
60.0
Japan
43.2
47.9
52.2
South Africa
48.0
56.2
51.0
Source: IHS Markit
Emerging Market and Developing Economies
(EMDEs)
Economic growth among EMDEs showed a
gradual recovery, driven by improved commodity
prices and sustained fiscal and monetary policy
support. The economic recovery was uneven
within the region due to a resurgence of the
pandemic, particularly in emerging Asia. The
growth forecasts for Latin America and the
Caribbean and the Middle East and Central Asia
were revised upward, to 5.8 per cent and 4.0 per
cent, respectively, reflecting improved trade and
financial conditions. However, growth forecasts
for China and India were downgraded on account
of a renewed pandemic wave. Accordingly, the
PMIs of China and India fell by 3. 7 per cent and
0.4 per cent, respectively, in the same period.
Likewise, in sub-Saharan Africa, South African
PMI decreased by 9.3 per cent, while in Nigeria, it
contracted by 3.1 per cent.

2.2 GLOBAL INFLATION
Inflationary pressures remained elevated in both
advanced and emerging economies. Despite the
reopening of most economies, weak global
supply chains, alongside rising demand, following
various fiscal and monetary injections, fueled
increases in food, energy, and input prices across
the globe. Consequently, the inflation rate in the
USA rose to 5.4 per cent in June 2021, above the
1.4 per cent in January 2021. Similar trajectories
were observed in the UK, Germany, Italy, Russia,
India, and South Africa. Although most monetary
authorities held off policy tightening, as they
viewed hikes in inflation as transitory, the
resurgence in the rate of COVID-19 infections
poses further upside risks to global inflation.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Figure 1: Inflation Rates in Selected Countries (per cent)

Source: Trading Economics Website


2.3 GLOBAL FINANCIAL MARKETS
Global Financial Conditions
The global financial conditions remained resilient
as both equity and bond markets recorded high
performance. Major equity indices were bullish in
the first half of 2021, reflecting improved
economic conditions, optimism around vaccine
rollouts, accommodative monetary policy, and
fiscal stimulus measures, which combined to lift
investors’ sentiments. Investors’ concern over
cost-push inflationary pressures was evident in
increased
volatility
in
all
the
markets.
Nonetheless, most segments of the market,
maintained momentum and generally closed
higher than the corresponding period.
Yields on government bonds witnessed record
highs in the review period. However, bond rates
have been trading in a narrow zone due to the
uncertainties
surrounding
inflation
and
subsequent monetary policy reactions. Inflation
expectations had risen, leading to a fall in actual
yields.
Figure 2: Key Global Stock Indices

Source: Bloomberg

Figure 3: Ten-year Government Bond Yields for Selected
Countries
Source: Bloomberg


United
States
United
Kingdom
Japan Germany
Italy
Russia
China
India
South
Africa
Nigeria
Mar-21
Jun-21


Apr-20
Apr-20
Apr-20
May-20
May-20
Jun-20
Jun-20
Jun-20
Jul-20
Jul-20
Aug-20
Aug-20
Aug-20
Sep-20
Sep-20
Oct-20
Oct-20
Nov-20
Nov-20
Nov-20
Dec-20
Dec-20
Jan-21
Jan-21
Jan-21
Feb-21
Feb-21
Mar-21
Mar-21
Apr-21
Apr-21
Apr-21
May-21
May-21
Jun-21
Jun-21
Jun-21
2020H1
2020 H2
2021 H1
S&P500
FTSE100
Nasdaq-100
Dow Jones
EURO STOXX50
NIKKEI 225
TOPIX
EGX100
DAX
NGSEINDX

Oct-20
Oct-20
Oct-20
Oct-20
Nov-20
Nov-20
Nov-20
Dec-20
Dec-20
Dec-20
Jan-21
Jan-21
Jan-21
Feb-21
Feb-21
Feb-21
Mar-21
Mar-21
Mar-21
Apr-21
Apr-21
Apr-21
May-21
May-21
May-21
Jun-21
Jun-21
Jun-21
2020Q4
2021Q1
2021Q2
Per cent (%)
US
CANADA
GERMANY
EURO AREA
UK
FRANCE
JAPAN

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

2.4 GLOBAL COMMODITY PRICES
The average prices of most commodities
monitored at the international market rose due to
supply cuts, arising from inclement weather
conditions in the producing regions. The index of
the commodities monitored (cocoa, cotton,
coffee, wheat, rubber, groundnut, oil palm, and
soybeans) rose to 79.3 index points in the first
half of 2021. This was 23.3 per cent higher than
the 64.3 index points recorded in the
corresponding period of 2020. However, the
prices of cocoa and groundnut fell by 0.5 per cent
and 14.8 per cent, respectively, during the review
period.
An analysis of commodity prices indicates that
the average price of wheat rose by 43.6 per cent
to 81.7 index points, compared with the average
of 56.9 index points in the corresponding period
of 2020. The increase in the price of wheat
resulted from the substitution effect, as
consumers switched to wheat from the more
expensive maize at the international market.
The price indices for soybean and oil palm
increased, averaging 109.9 index points and 85.5
index points, during the review period, compared
with 67.8 index points and 54.5 index points,
respectively, in the corresponding period of
2020. The increase in the price of soybean was
due largely, to sustained demand from China.
Similarly, the price of oil palm rose following low
production in Southeast Asian countries, arising
from pandemic-induced labour shortages.


Figure 4: Average Index of Selected Export Commodities

Source: Staff Computation based on data from Index Mundi
Expectations of low supply from producing
regions, coupled with disruptions in trade flows,
triggered increases in the price of coffee. The
average price index rose by 19.5 per cent to 70.0
index points, from 58.6 index points in the
corresponding period of 2020.
Rubber and cotton also recorded price increases
at 47.7 index points and 54.4 index points,
respectively, compared with 31.1 index points
and 41.7 index points for the same period in
2020. The recovery of the global auto sector and
the relaxation of the COVID-19 containment
measures improved the demand for rubber. The
increase in the price of cotton was influenced
majorly by lower supplies following reduced
acreage in the USA, India, and Pakistan.
The international price of cocoa and groundnut,
especially in North America and Southeast Asia,
declined in the first half of 2021, due to a glut
from the producing regions. The price of cocoa
fell by 0.5 per cent to 78.5 index points, from the
78.8 index points in the first half of 2020, driven
by lower demand for chocolates and related
treats. Similarly, the price of groundnut declined
by 14.8 per cent to 106.6 index points, from the
125.1 index points in the same period of 2020,

Cocoa
Cotton
Coffee
Wheat
Rubber Groundnut Palm oil
Soya
beans
Average Index
1st half 2020
1st half 2021

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

due to increased supply from the USA, Brazil, and
China.
Crude Oil Prices
Crude oil prices rose in the first half of 2021, on
the back of the rebound in global crude oil
demand. The rebound in demand was due to the
gradual return of the global economy to normalcy
amid the easing of the COVID-19 lockdown
measures. In addition, the mass rollout of
vaccines
boosted
business
and
investor
confidence, thus contributing to the price rally.
Consequently, the average spot price of Nigeria’s
reference crude, the Bonny Light, increased by
59.6 per cent to US$64.81 per barrel (pb),
compared with US$40.60 pb in the first half of
2020.
Figure 5: Average Price of Bonny Light (US$ per barrel)
Source: Refinitiv Eikon (Thomson Reuters)
The prices of other monitored crude streams,
such as Brent, Forcados, the West Texas
Intermediate (WTI), and the OPEC Reference
Basket also rose by 63.0 per cent, 59.1 per cent,
71.0 per cent and 62.6 per cent to US$65.14pb,
US$64.97pb, US$62.79pb and US$63.74pb,
respectively, relative to their levels in the first half
of 2020.


Figure 6: Average Monthly Crude Oil Prices, 2020-2021
(US$ per barrel)

Source: Refinitiv Eikon (Thomson Reuters)

Global Crude Oil Supply and Demand
Crude oil supply was lower than its demand due
to supply cuts in compliance with the OPEC+
agreement. Total world crude oil supply averaged
93.76 mbpd, a decline of 2.87 per cent, relative
to the level in the first half of 2020. The decline
reflected the decrease in aggregate OPEC supply.
Aggregate crude oil supply, including natural gas
liquids (NGLs) and condensates by OPEC,
averaged 30.57 mbpd in the first half of 2021.
This represents a decline of 4.82 per cent, relative
to the level in the first half of 2020. The fall in
aggregate OPEC supply was driven, mainly, by the
6.22 per cent decrease in its crude oil portion to
25.29 mbpd, in compliance with the OPEC+
production cut agreement. The remaining
portion of OPEC supply, NGLs, and condensates,
was 5.26 mbpd.
On the other hand, world crude oil demand
averaged 95.67 mbpd, compared with 85.83
mbpd in the first half of 2020, indicating an
increase of 11.7 per cent. Organisation for
Economic
Co-operation
and
Development
(OECD) countries’ demand was 43.08 mbpd (41.2
per cent of the total world demand), while nonOECD countries accounted for the balance. The
increase in world crude oil demand was driven by
continued re-opening of economies across the

Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
US$/bbl
BONNY LIGHT
UK BRENT
FORCADOS
WTI-M*
OPEC-Basket

2020H1
2020H2
2021H1

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

world, improving market sentiment on economic
recovery in the US and Europe, and growing
optimism of stronger oil demand by the US,
China, and western Europe. Nonetheless, the
demand was moderated by the deteriorating
COVID-19 situation in some Asian countries,
including India.
2.5 CENTRAL BANKS’ RESPONSE
Most
central
banks
maintained
an
accommodative monetary policy stance despite
heightened
inflationary
pressures.

The
extraordinary policy measures adopted by most
monetary authorities to contain the adverse
impact of the pandemic in 2020 were sustained
to enhance the supply of credit to households
and businesses and spur economic recovery. The
accommodative stance generally contributed to
inflationary pressures, which the monetary
authorities considered transitory. Consequently,
the central banks of most advanced economies
sustained a near-zero interest rate policy,
although rates generally remained unchanged in
most central banks in the EMDEs.
Table 3: Monetary Policy Rates of Selected Central Banks
Country
2020Q1
2020Q2
2021Q1
2021Q2
United States

United
Kingdom

Japan

Canada

Euro Area

China

India

Mexico

Turkey

South Africa

Nigeria

Source: Various Central Bank Websites


2.6 FISCAL MEASURES
Fiscal policy remained largely expansionary as
governments continued to support fragile
recoveries. Several governments in advanced
economies sustained well-targeted fiscal support
to vulnerable households and firms since the
onset of the pandemic. These include fiscal reliefs
to households and firms through transfers, wage
subsidies, and liquidity support. During the
review period, the USA government sought
legislative approval for a US$1.9 trillion
coronavirus
relief
package
to
support
households, unemployed, children, veterans, and
small businesses, among others, to enhance
living standards and position its economy on the
path of sustainable growth.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Section Three


.


Enabled by policy support, the domestic economy benefitted from
global economic recovery in the first half of 2021.
❖ Monetary Policy
❖ Real Economy
❖ Fiscal Policy
❖ Financial Sector Developments
❖ Payments System Management
❖ External Sector Developments

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
3.1 MONETARY POLICY
Major Economic
Development


Persistence of COVID-19
risk and weak global
supply chains

Heightened currency
speculation

Elevated global inflation

Insecurity-induced
inflationary pressure
Priorities of Monetary Policy


Ensure price stability

Strengthen financial
market fundamentals

Encourage credit flow to
the real sector


Implications


Persistence of
macroeconomic risk

Pressure on the exchange
rate

Declining but double-digit
inflation figure

Heightened investors’
sentiment


Monetary Policy Environment
Liquidity Management
The Monetary Policy Committee maintained its accommodative
policy stance, as the economic recovery continued, despite
uncertainties. Open Market Operations (OMO) remained the
Bank’s major policy tool for liquidity management, complemented
by reserve requirements, standing facilities and other discount
window operations. The MPR was retained at 11.50 per cent with
an asymmetric corridor of +100/-700 basis points for the standing
lending facility (SLF) and the standing deposit facility (SDF),
respectively. The Cash Reserve Ratio (CRR) and Liquidity Ratio (LR)
were also retained at 27.5 per cent and 30.0 per cent, respectively,
throughout the review period.
Exchange Rate Policy

The bank re-adjusted the exchange rate towards unifying rates in all
segments of the market, while enhancing price discovery

Sustained intervention in the foreign exchange market and
retention of the I&E window to attract autonomous inflow of foreign
exchange to stabilise the domestic currency.
Instruments of MP
In the pursuit of its statutory
mandate, the Bank during the
review period, deployed an
array
of
monetary
policy
instruments.

The CBN Bill remained the
major instrument of
monetary policy,
complemented by:

Cash Reserve Ratio (CRR)

Standing Facilities
operations

Interventions in the
foreign exchange market.

Trend in Monetary Policy Rate (per cent)
Headline inflation of
6-9%
Primary Objective of
Monetary Policy
Price Stability
Monetary Policy Decisions

January 25
and 26,

Retained the MPR at 11.50 per cent;
Retain the CRR at 27.5 per cent;
Retained the LR at 30.0 per cent; and
Retained the asymmetric corridor at +100/– 700 basis
points around the MPR.

March 22
and 23,

Retained the MPR at 11.50 per cent;
Retain the CRR at 27.5 per cent;
Retained the LR at 30.0 per cent; and
Retained the asymmetric corridor at +100/– 700 basis
points around the MPR.

May 24 and
25, 2021
Retained the MPR at 11.50 per cent;
Retain the CRR at 27.5 per cent;
Retained the LR at 30.0 per cent; and
Retained the asymmetric corridor at +100/– 700 basis
points around the MPR.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
3.2 THE REAL ECONOMY
a.
Domestic Output
Domestic output rebounded in the first half of
2021, following various stimulus packages by the
fiscal and monetary authorities. Domestic output
grew by 2.70 per cent in the first half of 2021, in
contrast to a 2.18 per cent contraction in the first
half of 2020. The growth was buoyed by the
gradual
re-opening
of
global
economies,
following the roll-out of the COVID-19 vaccines,
and the timeous stimulus packages by the fiscal
and monetary authorities within the domestic
economy. The development was felt mostly in
the Services sector (especially domestic traderelated activities), as the sector was the major
driver of the growth outcome in the first half of
the year. However, the Industry sector (especially
Crude Petroleum and Natural Gas) weighed down
on growth during the period.
Figure 7: GDP Growth Rate (Half Year) (per cent)

Source: National Bureau of Statistics (NBS)
The non-oil sector led the overall output
performance with a growth of 3.70 per cent, as
against a contraction of 2.31 per cent in the first
half of 2020. The improvement was due mainly to
the pick-up in economic activities, the reopening
of the land borders in December 2020, and the
impact of various economic interventions.
However, the oil sector contracted further by
7.13 per cent, from 0.80 per cent in the first half
of 2020. The development emanated from the
decrease in crude oil production and weakened
demand for oil from countries such as India,
Brazil, and part of the United States, with the
resurgence of the COVID-19 pandemic.
b.
Sectoral Performance

Agriculture
Despite persisting security and other structural
challenges, the agricultural sector grew. albeit
slower than the first half of 2020. The sector's
growth slowed to 1.77 per cent, compared with
1.88 per cent in the first half of 2020.
Nevertheless, the sector contributed 0.41 per
cent to the overall output growth. The
performance was engendered by increased
production and improvement in supply chains, on
account of the gradual return of the economy to
normalcy, following the roll-out of COVID-19
vaccines. Growth was also supported by the
impact of the various Federal Government and
CBN direct interventions in the sector, aimed to
ease
the
pandemic's
negative
effects.
Consequently,
crop
production,
livestock,
forestry, and fishery sub-sectors grew by 1.83 per
cent, 0.90 per cent, 1.16 per cent and 2.83 per
cent, respectively.
Figure 8: Agriculture Sector Performance (per cent)

Source: National Bureau of Statistics (NBS)


Total GDP
Oil GDP
Non-Oil GDP
Percent (%)
2019H1
2020H1
2021H1

Agriculture
Sector
Crop
Production
Livestock
Forestry
Fishing
Percent (%)
2019H1
2020H1
2021H1

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Industry
Performance of industry, though lower than the
pre-pandemic level, improved as the sector’s
contraction narrowed significantly because of the
uptick
in
manufacturing
activities.
The
contraction in the sector narrowed to 0.08 per
cent in the first half of 2021, indicating an
improvement, relative to the contraction of 4.97
per cent in the first half of 2020. The positive
development was driven, mainly, by the
improved performance of the manufacturing
sub-sector, which grew by 3.44 per cent during
the period. The reopening of the land borders
also contributed to improved manufacturing
output performance. Rising prices of imported
goods led to a higher demand for locally
manufactured
substitutes.
Similarly,
construction; water supply, sewage, and waste
management; and electricity, gas, steam, and air
conditioner subsectors grew by 2.40 per cent,
16.92 per cent, and 56.58 per cent, respectively.
However, the industry sector was weakened by a
6.98 per cent contraction in the mining and
quarrying
sub-sector,
following
weak
performance in the oil and gas sub-sector, due to
supply constraints. Solid minerals sub-sector also
contracted, after the revocation of some mining
licences by Nigeria’s Mining Cadastre Office
(MCO),
on
account
of
non-payment
of
outstanding annual service fees. This was
exacerbated by Federal Government ban on
mining activities in Zamfara State, as well as the
persisting security challenges that deterred the
activities of artisanal miners.


Table 4: Industry Sector Performance (per cent)
Source: National Bureau of Statistics (NBS)
The index of industrial production reflected the
contraction in the sector’s output as it declined
by 0.6 index point to 105.9 index points
(2010=100), compared with 106.5 index points in
the first half of 2020. Mining production index
also fell 4.5 per cent to 71.8 index points
(2010=100), compared with 77.1 index points in
the first half of 2020.
Conversely, the manufacturing production index
increased by 3.4 per cent to 177.8 index points
(2010=100), compared with 171.9 index points in
the first half of 2020. Manufacturing capacity
utilisation rose by 8.3 percentage points to 53.5
per cent, compared with 45.2 per cent in the first
half of 2020.
Figure 9: Index of Industrial Production (2010=100)

Source: Staff computation based on data from NBS and MAN

The
energy
sector
recorded
improved
performance, reflecting the sustained efforts of
the government. Increased fiscal investment in
off-grid electricity solutions such as mini-grids

F I R S T H A L F
2 0 1 9
F I R S T H A L F
2 0 2 0
F I R S T H A L F
2 0 2 1
INDEX
Manufacturing
Mining
Electricity
Industry
Growth Rates
2019H1
2020H1
2021H1
Industry Sector
1.63
-4.97
-0.08
Mining and Quarrying
2.67
-1.04
-6.98
Manufacturing
0.35
-4.07
3.44
Electricity, Gas, Steam &
Air conditioner
2.78
-2.78
56.58
Water supply, sewage,
waste Management.
9.51
3.16
16.92
Construction
1.83
-15.99
2.40

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
and solar home systems to rural and underserved
communities ontributed to the gains in the
sector. The National Mass Metering Programmes
(NMMP), aimed at ensuring appropriate billing of
electricity consumers, further enhanced the
performance of the electricity distribution
companies (DISCOs).
During the review period, average electricity
generation, at 4,202.64 MW/h, increased by 16.4
per cent, compared with 3,611.2 MW/h in the
first
half
of
2020.
Average
electricity
consumption, at 3,672.10 MW/h, increased by
9.3 per cent, compared with the level in the first
half of 2020.

Services
The reopening of land borders and the relaxation
of COVID-19 restrictions improved activities in the
services sector. The services sector grew by 4.27
per cent in the first half of 2021, as against a
contraction of 2.64 per cent in the first half of
2020. The increase was driven mainly by the
trade sub-sector, with a growth of 8.97 per cent,
following the reopening of land borders in
December 2020 and further relaxation of COVID19 restrictions.
The
Information
and
Communications
Technology (ICT) subsector was the next highest
contributor to GDP growth. However, its growth
slowed to 5.97 per cent in the review period,
compared with 11.59 per cent in the first half of
2020.
The slower pace of the ICT subsector was
attributed to the reduction in demand for
telecom services, following the gradual return of
the economy to normalcy. In addition, the initial
ban on new sim card registration, following the
implementation of the Revised National Digital
Identity Policy for SIM Card Registration Policy
contributed to the decline in demand for telecom
services. Consequently, the number of active
telephone subscribers declined by 4.60 per cent
to 187,611,501 from 196,242,456 in the first half
of 2020. Similarly, teledensity declined to 98.28
per one hundred inhabitants, compared with
102.81 per one hundred inhabitants in the first
half of 2020.
Figure 10: Active Telephony Subscriptions and Teledensity
Source: Nigerian Communications Commission (NCC)

The transportation and storage subsector grew
by 6.30 per cent in the first half of 2021, as
against the contraction of 20.47 per cent in first
half of 2020. The growth was driven by sharp
increase in the volume of passengers and cargo
transported across different transport modes in
the first half of the year. More specifically, the
volume of domestic-bound passengers airlifted in
the first half of 2021, increased by 6.23 per cent,
compared with 2.15 million passengers, airlifted
in the first half of 2020. The volume of foreignbound passengers rose marginally by 0.01 per
cent during the period above the 0.89 million
passengers airlifted in the first half of 2020 The
number of passengers using rail transport
services rose by 31.5 per cent, in the first half of
2021 over the 0.76 million conveyed in the first
half of 2020. The increase in rail transport


end-June

end-Dec

end-June

end-Dec

end-June

end-Dec

end-June

Teledensity (%)
Number of Subscriptions
Subscriptions
Teledensity

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
patronage was due to the increased number of
rail terminals and economic activities. However,
activities in marine transport moderated,
compared with the first half of 2020, as the
number of ocean-going vessels that berthed at
the nation’s ports reduced to 2,005 from 2,030, a
year earlier. This led to a 37 per cent decline in
the volume of cargoes discharged and loaded at
the ports during the period, from 63,055,165
metric tons recorded in the first half of 2020.
Table 5: Services Sector Performance (per cent)
Growth Rates
2019H1
2020H1
2021H1
Services Sector
2.17
-2.64
4.27
Trade
0.30
-9.64
8.97
Accommodation and Food
Services
3.69
-16.80
-2.85
Transportation and
Storage
14.08
-20.47
6.30
Information and
Communication
9.23
11.59
5.97
Arts, Entertainment &
Recreation
4.29
-3.01
-0.17
Financial and Insurance
-4.97
19.63
-1.47
Real Estate
-1.72
-14.11
2.79
Professional, Scientific &
Technical Serv.
1.46
-8.08
-1.43
Administrative and
Support Services
1.73
-2.15
2.02
Public Administration
-8.64
-2.88
-1.34
Education
0.54
-10.83
-3.50
Human Health & Social
Services
0.50
1.49
4.79
Other Services
2.44
-5.98
-1.54
Source: National Bureau of Statistics (NBS)

Health
COVID-19 Incidence Report
There was moderation in the number of active
cases, due, mainly, to increased recovery rates
and discharges, following improved capacity of
the health system to deal with the COVID-19
pandemic, even as the cumulative number of
confirmed cases and death toll rose. In the period
under review, the rate of active cases declined
substantially by 91.8 per cent to 1,254 cases in,
compared with 15,358 cases in the first half of
2020. This was due to the higher cumulative
number of discharged cases of 90,531 persons
vis-à-vis 9,746 persons in the first half of 2020.
Figure 11: COVID-19 Statistics
Source: National Centre for Disease Control (NCDC)

However, the total number of confirmed cases
during the first half of the year increased by 211.4
per cent to 80,011 incidences, compared with the
25,694 incidences recorded in the first half of
2020. Mortality rose by 40.8 per cent to 831 in
the half of the year, compared to the 590 in the
first half of 2020.


Total Confirmed Cases
Discharged Cases
Death Toll (RHS)
H1: 2021
H1: 2020
H2: 2021

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Box 1: Policy Support and Developments in the Real Sector in the first half of 2021

Sector
Developments
1.
Industrial
Sector

•
The World Bank approved a US$500.00 million facility to improve access to electricity and expand the
metering network of power distributors;
•
The Federal Government approved N35.00 billion for the building of a power station for the Nigerian Export
Processing Zone Authority (NEPZA) in Cross River State;
•
Africa Export Import Bank (AFREXIM) and the Nigerian Export Import Bank (NEXIM) signed a Memorandum of
Understanding (MoU) to establish a US$50.00 million fund to stimulate local production;
•
The Federal Government approved the revised National Policy Framework on Micro, Small and Medium
Enterprises (MSMEs) to resolve challenges faced by the sub-sector;
•
The Federal Government approved the National Quality Policy to stop the rejection of Nigerian exports; and
•
Bank of Industry (BoI) secured a US$1.00 billion syndicate loan to support Micro, Small and Medium
Enterprises (MSMEs) in the country.
2.
ICT
•
The Federal Government approved the construction of the first National Information and Communications
Technology (ICT) Park to accommodate the National ICT Exhibition Centre and, Museum for ICT and postal
services, to showcase technology-related innovations by Nigerians; and
•
The Federal Government commenced the implementation of the Revised National Digital Identity Policy for
SIM card Registration to deepen national identity management and improve security.
3.
Transport
•
The Federal Government disbursed the aviation bailout fund of ₦5 billion among air carriers and operators;
•
The 157-kilometre Lagos-Ibadan standard gauge railway project commenced full commercial activities, while
the construction of the 37 km Lagos Rail Mass Transit Red Line was flagged off;
•
The US$3.20 billion rehabilitation and reconstruction projects of the Port Harcourt-Maiduguri Eastern Railway
project, the Bonny Deep Sea Port and the Railway Industrial Park, Port Harcourt were launched;
•
The Federal Government awarded a contract for the sum of US$1.96 billion for the 283.750 km cross-border
Kano-Katsina-Jibia-Maradi and Kano-Dutse rail project;
•
The Federal Government approved CBN’s proposal for the establishment of The Infrastructure Company
(InfraCo) with an initial seed capital of ₦1.00 trillion;
•
The Federal Government, under the first phase of the Highway Development and Management Initiative
(HDMI), approved the concession of 12 Federal Highways to private companies to improve facilities and
operations, while maximising the revenue generating potential of the routes; and
•
US$60.00 million was received by the Lekki Port LFTZ Enterprise Limited, for the construction of the Lekki
Deep Sea Port, as first installment of the US$629.00 million loan facility agreement with the China
Development Bank, signed in 2019.
4.
Health
•
The first batch of the AstraZeneca/Oxford vaccines was received from Serum Institute of India (SII) under the
COVAX facility. The first batch included 3.92 million doses of the vaccine out of the 16 million doses allocated
to the country.
5.
Education
•
Approval was given for the establishment of University of Technology in Jigawa and Akwa Ibom States and
University of Health Sciences in Bauchi and Osun States;
•
The Federal Government approved a take-off grant of ₦1 billion to establish the Aviation and Aerospace
University in Abuja; and
•
The National Universities Commission (NUC) granted provisional licence to 20 new private universities.
6.
Employment
Generation
•
The Special Public Works Programme (SPWP) was launched to engage 774,000 itinerant and low-skilled young
Nigerians;
•
A total of ₦2.04 billion was disbursed to 7,057 beneficiaries at end-May 2021, under the Nigeria Youth
Investment Fund (NYIF).

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Box 1: Policy Support and Developments in the Real Sector in the first half of 2021 (Cont’d)

Sector
Developments
7.
Oil & Gas
Sector
•
The Department of Petroleum Resources (DPR) awarded provisional tenders to develop 57 of its
marginal oilfields, to increase local participation in the oil sector;
•
The Federal Government launched the Nigerian Upstream Cost Optimisation Programme (NUCOP)
aimed at ensuring value for upstream expenses;
•
The Nigerian National Petroleum Corporation (NNPC) extended its Direct Sale Direct Purchase (DSDP)
contracts with 15 private companies up to June 2021 to help secure refined products for domestic
consumption;
•
The Federal Executive Council (FEC) approved the sum of US$1.50 billion for the rehabilitation of the
Port Harcourt refinery;
•
The NNPC, with its Production Sharing Contract (PSC) partners, executed agreements to renew the Oil
Mining Lease (OML) 118 for another 20 years;
•
The ANOH Gas Processing Company (AGPC), which is an incorporated Joint Venture between Seplat and
the Nigerian Gas Company (NGC), secured a US$260.00 million loan to fund the completion of its
300mmscfd capacity plant located on OML 53 in Imo State; and
•
The Federal Government inaugurated the Rungas composite cylinder manufacturing plant in Alaro city,
Epe, Lagos State, to boost local production of LPG cylinders.
8.
Solid
Minerals
•
Nigeria’s Mining Cadastre Office (MCO) revoked over 2,000 mining licenses over the non-payment of
yearly service fees by the affected miners; and
•
The Federal Government and Bank of Industry (BOI) instituted a fund to provide loans to artisanal and
small-scale miners of a minimum amount of ₦10.00 million at a 5.0 per cent interest rate.
9.
Crop
Production
•
The Federal Government distributed agricultural inputs to over 10,000 smallholder women farmers in
the North Central region and the Federal Capital Territory (FCT);
•
The Nigeria Sovereign Investment Authority (NSIA), under the Presidential Fertiliser Initiative, partnered
with OCP Africa Fertiliser Limited and the Akwa Ibom State Government to construct a US$1.40 billion
ammonium plant which will produce 750,000 tons of ammonia and 1 million tons of phosphate fertiliser
annually;
•
The Dangote Fertiliser company commenced operations and is expected to add about 3 million metric
tonnes of Urea to the market, as well as earn the country about US$12.00 billion in foreign exchange;
•
The Agro-Processing, Productivity Enhancement, and Livelihood Improvement Support (APPEALS)
Project in Kano State-supported over 20,000 farmers with training, equipment, and financial grants to
engage in poultry, rice, wheat, and tomato farming;
•
The Federal Government granted the National Agricultural Land Development Authority (NALDA)
approval to recruit and train 30,000 graduates of agriculture and related sciences to handle soil testing
and other responsibilities in the Agency; and
•
AFEX Commodities Exchange Limited announced its first warehouse receipt-backed commercial paper,
transferrable from commodities to financial assets and listed under the borrower’s portfolio on the
AFEX trading platform.

10.
Fisheries
•
The Federal Government approved 39 licences for the importation of fish in the first half of 2021.
11.
Livestock
•
The Federal Government approved the augmentation of ₦665 million contract earlier awarded to
procure poultry equipment for displaced poultry farmers in Borno, Yobe, Plateau, and the Zamfara
States;
•
The Federal Government commenced a pilot project of the National Livestock Transformation Plan
(NLTP) in Nasarawa State. The project had 30 pastoralist households, with ranches equipped with the
necessary facilities to support livestock production;
•
Seven states have set out 19 grazing reserves for the implementation of the NLTP with a total land size
of approximately 400,000 hectares;
•
The US Mission partnered with Ikun Dairy Farm in Ekiti State to improve milk production in the country,
with a target production of 10,000 litres of milk daily;
•
The Federal Government activated the Avian Influenza Outbreak Emergency Operation Centre (EOC),
carried out sensitin to various
•
The Lagos State Government carried out two-week decontamination of the 26 major poultry markets
as well as set up surveillance

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
c. Price Developments
Inflation
Inflationary pressure persisted during the first
half of 2021, owing largely to a rise in food prices.
Headline inflation (year-on-year) rose to 17.75
per cent at end-June 2021, higher than the 15.75
per cent at end-June 2020. The rise was
attributed to faster growth in food prices,
following the lingering impact of security
challenges that disrupted the food supply chain.

Figure 12: Headline Inflation (y-on-y, m-on-m, per cent)
Source: National Bureau of Statistics (NBS)

i. Core Inflation
Core inflation (all-items less farm produce)
continued to trend upward, to 13.09 per cent at
end-June 2021, compared with 10.13 per cent at
end-June 2020. The persistent rise in core
inflation was, attributed largely, to the increase in
the
cost
of
transportation/logistics
and
heightened security challenges across the
country.


Figure 13: Core Inflation (y-on-y, m-on-m, per cent)
Source: National Bureau of Statistics (NBS)

ii. Food Inflation
Rising food prices remained the major driver of
headline inflation in the first half of 2021.
Although the pace of increase in food prices
moderated during the period, food inflation rose
to 21.83 per cent in the first half of 2021,
compared with 15.18 per cent in the first half of
2020. The development was attributed to the
disruption in the food supply chain, arising from
security challenges and floods across the farming
belts.
Figure 14: Food Inflation (y-on-y, m-on-m, per cent)

Source: National Bureau of Statistics (NBS)


Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Year-on-Year (LHS)
Month-on-Month (RHS)
H1: 2020
H2: 2020
H1: 2021

Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Year-on-Year (LHS)
Month-on-Month (RHS)
H1:
H2:
H1: 2021

Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Year-on-Year (LHS)
Month-on-Month (RHS)
H1: 2020
H2: 2020
H1: 2021

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


FOOD ITEM
2020H1
2021H1
%
Change
FOOD ITEM
2020H1
2021H1
%
Change

Unit

(1) & (2)

Unit

(1) &
(2)
Agric. eggs

1kg
462.6
530.3
14.6
Palm oil: 1
bottle,
specify
bottle
1kg
461.3
584.8
26.8
Beans
brown,sold
loose
"

391.2
40.2
Rice agric
sold loose
"
384.6
445.2
15.8
Beans: white
black eye. sold
loose
"
254.5
365.6
43.6
Rice local
sold loose
"
336.8
397.5

Gari white,sold
loose
"
180.8

54.9
Rice
Medium
Grained
"
385.1
443.4
15.1
Gari
yellow,sold
loose
"
206.1
297.1
44.1
Rice
imported
high quality
sold loose
"
458.5

19.1
Groundnut oil:
1 bottle,
specify bottle
"
591.7
689.7
16.6
Sweet
potato
"
152.1
161.4
6.1
Irish potato
"
301.3
325.7
8.1
Tomato
"

290.4

Maize grain
white sold
loose
"
160.3
235.4
46.9
Vegetable
oil: 1bottle,
specify
bottle
"
540.4
677.1
25.3
Maize grain
yellow sold
loose
"
161.7
241.4
49.3
Wheat
flour:
prepacked
2kg
685.5
773.8
12.9
Onion bulb
"
229.3
309.6

Yam Tuber
1kg
217.7
255.4
17.3
Source: National Bureau of Statistics
Box 2
Selected Average Food Prices, First Half 2021
A survey of selected food prices by the National Bureau of Statistics (NBS)
during the first half of the year revealed increases in prices, with the highest
increases recorded in garri- white (54.9 per cent), maize - yellow (49.3 per
cent), maize - white (46.9 per cent) and garri - yellow ( 44.1 per cent). Other
commodities recorded increases ranging from 6.1 per cent for sweet
potatoes to 40.2 per cent for imported beans (brown).

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Domestic Crude Oil Production, Refinery
Operations, and Petroleum Products
Consumption
Crude Oil Production
Domestic crude oil production declined in the first
half of 2021 due to supply disruptions. At an
average daily production of 1.46 million barrels
per day (mbpd) or 262.8 million barrels (mb),
Nigeria’s crude oil output in the first half of 2021
declined by 22.6 per cent, compared with the
level in the first half of 2020.
Several factors accounted for the decline,
including the fire outbreak at one of the country’s
major export terminals, force majeure placed on
the Qua Iboe crude stream, shift to a later date of
shipments of the Brass crude stream, and
pipeline vandalism. In addition, leakages in the
Nembe Creek Trunk line in May 2021 and the
scheduled maintenance of the Trans Ramos and
Bonga pipelines, forced several shut-ins.
Figure 15: Average Crude Oil Production (Million barrels
per day)

Source: Refinitiv Eikon (Thomson Reuters)

Refinery Operations
Due to aging infrastructure, the three stateowned refineries in Nigeria, with a combined
capacity of 445,000 barrels per day (bpd), were
shut down, during the review period. Output
from the Walter Smith Refinery and Niger Delta
Petroleum Resources modular refineries, which
were operational, was inadequate to boost the
consolidated capacity utilisation rate and meet
domestic demand.
Table 6: Status of Operation of Refineries in Nigeria
S/No.
Plants
Capacity
(bpd)
Status

Port Harcourt
Refining Company
(PHRC)
210,000
Under
rehabilitation

Kaduna Refining
and
Petrochemical
Company (KRPC)
110,000
Under
rehabilitation

(Warri Refining
and
Petrochemical
Company (WRPC)
125,000
Under
rehabilitation

Walter Smith
Refinery
5,000
Operational

Niger Delta
Petroleum
Resources
1,000
Operational

Dangote Refinery
650,000
Under
construction
Source: Fitch Solutions

Gas
Gas Production and Utilisation
The estimated total volume of gas produced in
the first half of 2021 declined by 21.4 per cent to
1,032,278 million standard cubic feet (mscf)
compared with 1,312,430 mscf in the first half of
2020. Of the total gas produced, 91.0 per cent
(941, 908 mscf) was utilised, while the remaining
9.0 per cent was lost through gas flaring. Of the
utilised gas, 5.7 per cent was expended as fuel
gas; 4.3 per cent, 1.8 per cent, 10.9 per cent, and
43.8 per cent were sold for the Escravos Gas-toLiquid project (EGTL), NGL/LPG, domestic use,
and
NLNG,
respectively.
Gas
re-injected
accounted for 33.5 per cent gas utilised.

0.5

1.5

2019H1
2019H2
2020H1
2020H2
2021H1

Million Barrels Per Day

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Figure 16: Gas Production, Utilisation and Flared, 20202021 (Billion scf)

Source: NNPC Monthly Oil Reports

d.
Development Finance
Various development finance interventions to the
real sector were sustained to drive job creation,
economic recovery, and household welfare.
i.
The Nigeria Export-Import (NEXIM) Bank
Total credit provided to the non-oil export sector
under the various lending facilities of the NEXIM
Bank in the first half of 2021 for 23 projects was
N24.06 billion, compared with N18.1 billion in
respect of 23 projects in the first half of 2020. The
increased disbursement was attributed to new
products, such as the Small and Medium
Enterprises Export Facility (SMEEF), the Women
and Youth Export Facility (WAYEF), and an uptick
in economic activities.
The breakdown of the disbursement by facility
showed that Trade Finance, Rediscounting and
Refinancing, Foreign Input and Local Input
Facilities accounted for 46.5 per cent, 23.4 per
cent, 23.0 per cent and 7.1 per cent, respectively.


Figure 17: Summary of NEXIM BANK Disbursements by
Facility, First Half of 2021 (per cent)
Source: Nigeria Export Import Bank

The sectoral analysis of disbursements showed
that the agricultural sector received N17.74
billion (74.0 per cent), followed by the
manufacturing sector with N4.82 billion (20.0 per
cent) and solid minerals, N1.5 billion (6.0 per
cent).
Figure 18: Summary of NEXIM BANK Disbursements by
Sector, First Half of 2021 (per cent)
Source: Nigeria Export-Import Bank

ii.
The Bank of Industry (BoI)
Total credit disbursed by the BoI to the industrial
sector in the first half of 2021 fell by 15.7 per cent
to N77.0 billion, from N91.4 billion in the first half
of 2020. This was attributed to a higher number
of ineligible applications. Large enterprises
received ₦67.1 billion from the disbursements,

Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Billion scf
Gas Produced
Gas Utilised
Gas Flared
Trade
Finance
Facility
46.6%
Rediscounti
ng &
Refinancing
Facility
23.4%
Foreign
Input
Facility
23.0%
Local
Input
Facility
7.1%
Agriculture
74.0%
Manufacturing
20.0%
Solid
Minerals
6.0%

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
representing
87.1
per
cent
of
total
disbursements,
while
small
and
medium
enterprises received ₦9.9 billion (12.9 per cent).
A sectoral analysis of the disbursements shows
that: the creative industry received N16.5 billion
(21.4 per cent); renewable energy, N15.8 billion
(20.5 per cent); engineering and technology,
N9.4 billion (12.2 per cent); gender business,
N8.7 billion (11.3 per cent); and, agro-processing,
N8.1 billion (10.5 per cent). Others include food
processing, N5.3 billion (6.9 per cent); oil and gas
sector, N5.1 billion (6.6 per cent); and, healthcare
and petrochemicals sector, N4.6 billion (6.0 per
cent). Furthermore, solid minerals and financial
services received N2.2 billion (2.9 per cent) and
N1.3 billion (1.7 per cent), respectively.
Figure 19: Summary of BoI Disbursements by Sector, First Half of
2021 (per cent)

Source: Bank of Industry

e.
CBN Interventions
The CBN sustained its intervention programmes
with a view to promoting access to credit, job
creation and economic growth. As part of its
policy measures to cushion the effects of the
COVID-19 pandemic on businesses, households
and financial institutions, the Bank extended the
interest rate concession and moratorium on its
interventions to February 28, 2022.
The Bank also reviewed its guidelines for the
implementation of the Anchor Borrowers’
Programme (ABP) with the objectives of
enhancing participation, improving repayments,
and contributing significantly to national food
output. In the first half of 2021, the Programme
disbursed
N179.30
billion
to
1,008,457
smallholder farmers, compared with N149.01
billion disbursed to 810,583 smallholder farmers
in the first half of 2020. The increase in ABP
activities was due to renewed focus on largescale anchors to improve the Programme’s
potential
for
job
creation
and
welfare
enhancement. Cumulatively, the ABP has, since
it’s inception, financed 3.56 million farmers
cultivating about 4.25 million hectares of 21
agricultural commodities, contributing an annual
estimate of up to 2.5 million metric tonnes of rice
paddy, 1.13 million metric tonnes of maize, and
1.41 million metric tonnes of cassava to the
national output. During the period, repayment
was N47.49 billion, compared with N124.90
billion in the first half of 2020.
The Bank also sustained its interventions in the
manufacturing sector through two programmes,
namely COVID-19 Intervention for Manufacturing
Sector (CIMS) and Real Sector Support Facility –
Differentiated Cash Reserve Requirement (RSSFDCRR). The CIMS and RSSF-DCRR supported 16
and 32 greenfield projects, respectively, valued at
N35.99 billion and N199.69 billion, compared
with 42 and 59 projects, valued at N77.41 billion
and N137.49 billion, respectively, in the first half
of 2020. Repayment under RSSF-DCRR was
N41.97 billion, compared with N11.65 billion in
the first half of 2020.
The Healthcare Sector Intervention Facility (HSIF)
financed 23 projects, valued at N25.16 billion, in
Agro
Processing
(10.5%)
Creative
Industry
(21.4%)
Engineering &
Technology
(12.2%)
Financial
Services
(1.7%)
Food
Processing
(6.9%)
Gender Business
(11.3%)
Healthcare &
Petrochemicals
(6.0%)
Oil & Gas
(6.6%)
Renewable
Energy
(20.5%)
Solid Minerals
(2.9%)

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
the first half of 2021, compared with N20.96
billion for 15 projects in the first half of 2020. The
intervention led to increased hospital bed spaces,
improved healthcare delivery, and supported the
acquisition of over 45 Magnetic Resonance
Imaging (MRI) machines and 36 Computed
Tomography (CT) scanners.
The Bank also supported businesses and
households adversely affected by the COVID-19
pandemic, as it disbursed N144.93 billion to
323,634 beneficiaries, compared with 70,953
beneficiaries
in
the
first
half
of
2020.
Cumulatively, the Targeted Credit Facility (TCF)
has supported 641,134 beneficiaries, comprising
539,446 households and 101,688 SMEs, since its
inception in 2020.
The Bank’s National Mass Metering Programme
(NMMP) continued to support the energy sector
by
procuring
393,702
electricity
meters
nationwide in the first half of 2021. Cumulatively,
the Programme has financed the procurement of
657,562 electricity meters since its inception in
October 2020. Similarly, the Solar Connection
Facility (SCF) financed the installation of 100,000
solar home systems (SHS) in rural areas across
the country.


Table 7: Disbursements on Interventions in the First Halves of 2020 and 2021

H1-2020
H1-2021

Disbursements
Repayments
Disbursements
Repayments

Amount
(N Billion)
Beneficiaries
Amount
(N Billion)
Amount
(N Billion)
Beneficiaries
Amount
(N Billion)
Agricultural Credit Guarantee Scheme (ACGS)
1.48
9,641loans
guaranteed
1.35
2.17
9,719 loans
guaranteed
1.75
Commercial Agricultural Credit Scheme (CACS)
27.09
15 projects
29.04
16.25
11 projects
20.01
Anchor Borrowers' Programme
149.01
810,583 farmers
124.90
179.30
1,008,457 farmers
47.49
Accelerated Agriculture Development Scheme
(AADS)
6.00
4 State governmentsponsored projects
N/A
1.50
1 State governmentsponsored projects
N/A
Maize Aggregation Scheme (MAS)
1.50
3 Projects
N/A
0.35
2 Projects
N/A
Paddy Aggregation Scheme (PAS)
3.20
3 Projects
Nil
4.17
1 Project
Nil
Presidential Fertilizer Initiative (PFI)
Nil
Nil
3.50
Nil
Nil
2.50
National Food Security Programme (NFSP)
9.00
2 Projects
2.85
Nil
Nil
8.31
Real Sector Support Facility Using Differentiated
Cash Reserve Ratio (RSSF-DCRR)
137.49
59 Projects
11.65
199.69
32 Projects
41.97
COVID-19 Intervention for Manufacturing Sector
(CIMS)
77.41
42 Projects
N/A
35.99
16 Projects
N/A
Non-oil Export Stimulation Facility (NESF)
9.00
2 Projects
2.85
Nil
Nil
0.58
Micro, Small and Medium Enterprises Development
Fund (MSMEDF)
Nil
Nil
4.97
0.05
1 beneficiary
2.91
Agribusiness/Small and Medium Enterprises
Investment Scheme (AGSMEIS)
26.62
6,727 beneficiaries
0.03
9.79
1,067 beneficiaries
0.135
Creative Industry Financing Initiative (CIFI)
1.10
160 beneficiaries
N/A
0.07
21 beneficiaries
0.013
Targeted Credit Facility (TCF)
44.28
70,953 beneficiaries
N/A
144.93
323,654 beneficiaries
N/A
Nigeria Youth Investment Fund (NYIF)
Nil
Nil
Nil
2.81
6,763 beneficiaries
N/A
Healthcare Sector Intervention Fund (HSIF)
20.96
15 Projects
N/A
25.16
23 Projects
N/A
Healthcare Sector Research Intervention (Grant)
Scheme (HSRDIS)
Nil
Nil
Nil
0.15
5 beneficiaries
N/A
National Mass Metering Programme (NMMP)
Nil
Nil
Nil
36.04
393,702 Meters
N/A
Nigeria Electricity Market Stabilization Facility
(NEMSF)
Nil
Nil
10.73
120.29
7 DisCos
5.91
Nigeria Bulk Electricity Trading – Payment
Assurance Facility (NBET-PAF
85.42
1 Project
N/A
88.99
1 Project
N/A
Solar Connection Facility (SCF)
Nil
Nil
Nil
7.00
100,000 SHS
N/A
Intervention Facility for Nigeria Gas Expansion
Programme (IFNGEP)
Nil
Nil
Nil
15.20
2 Projects
N/A
Source: Central Bank of Nigeria
Note: Facilities granted under these interventions were still under moratorium
N/A means Not Available

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
3.3 FISCAL DEVELOPMENTS
Fiscal Policy Framework 2021-2023
Fiscal policy in the review period was anchored on
the 2021 Appropriation Act, the Medium-Term
Expenditure Framework and Fiscal Strategy
Papers, 2021-2023 (MTEF/FSP 2021-2023), and
the Medium-Term Debt Strategy 2020-2023
(MTDS 2020-2023). These frameworks are linked
to the Economic Recovery and Growth Plan
(ERGP) and the National Economic Sustainability
Plan 2020 (NESP 2020), which prioritizes:
macroeconomic stability, food security, energy
sufficiency,
industrialisation,
infrastructural
development, enhancement of government
revenue, reduction of non-essential spending, job
creation, and mitigating the immediate impact of
COVID-19, among other objectives.
3.3.1 Federation Account Operations
a. Federation Revenue
Government
revenue
mobilization
drive
was
underpinned by the Finance Act 2020, derived from the
Strategic Revenue Growth Initiatives (SRGI 1). The
strategy rests on the expectation that oil prices remain
around the $40 per barrel benchmark and that
domestic crude oil production stays within the 1.86
mbpd targets envisaged in the 2021 FGN budget.
Other revenue enhancement measures in the period
include leveraging technology and automation,
service-wide implementation to the Integrated Payroll
and
Personnel
Information
System
(IPPIS),
strengthening independent revenue monitoring, and
planned elimination of costly subsidies (petrol and
electricity).


1 The SRGI focuses on accelerating revenue mobilization without hurting
private investment or job creation.

Source: Based on the MTEF/FSP 2021-2023 data

Revenue outcomes in the first half of 2021
improved, relative to 2020; signaling gradual
build-up of economic activities, as COVID-19
restrictions were lifted. At N5,050.10 billion (or
6.4 per cent of GDP), provisional gross federally
collected revenue2 rose by 8.3 per cent, above
the level in the of first half 2020, but 18.7 per cent
lower than the benchmark. Although it remained
2 Earnings lodged in the Federation Account by virtue of Section 161 of the
Federal Republic of Nigeria Constitution 1999 as amended.
Figure 20: Fiscal policy frameworks for FY2021

MTDS
2020-2023
MTEF&FS
P/MTDS
2021-2023
Appropriation
Act

Alloction
MDAs/Sectors

•Revenue optimization
•Creating fiscal space for infastructural
development
•Enhancing fiscal prudence and transparency
•Ensuring sustainable deficit and debt levels,
including new fiscal rules
Fiscal Policy Thrust 2021-2023
2021 Appropriation Act: Highlights

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
below the proportionate target, higher revenue
performance in the period, reflected the gradual
easing of economic activity.

Figure 21: Structure of Federation Revenue (per cent)
Source: Office of Accountant General of the Federation (OAGF)
and FMFB&NP.

Revenue growth, relative to 2020, was driven by
non-oil revenue sources, which accounted for
58.4 per cent of total federation earnings, while
oil revenue sources constituted the balance of
41.6 per cent. This compares with the ratio of
49.4:50.6 (non-oil to oil) revenue composition
envisaged in the 2021 budget.

The dominance of non-oil revenue reflected early
gains of revenue diversification efforts of the
government, driven by the Strategic Revenue
Growth Initiatives (SRGI); while the contribution
of oil was, particularly, lowered by the high cost
of petrol subsidy and low domestic crude oil
output.


Table 8: Federally Collected Revenue and Distribution
(N Billion)
Source: Fed. Min. of Finance Budget and National Planning
(FMFB&NP)


i.
Drivers of Federally Collected Revenue
a. Non-oil Revenue
Gradual recovery in the domestic economy,
stirred
by
the
relaxation
of
COVID-19
containment measures, manifested in higher nonoil revenue outcomes. Non-oil revenue at
N2,949.69 billion (3.7 per cent of GDP) rose by
57.9 per cent, relative to half year 2020. The
improvement reflected a pickup in economic
activity and the continued implementation of the
Finance Acts (2019 and 2020), which raised
revenue, particularly from corporate taxes and
value-added tax, by 37.0 per cent and 60.8 per

Half
Year-20
Half
Year-21

Budget
Federation Revenue
(Gross)
4,662.50
5,050.10
6,148.29
Oil
2,793.84
2,100.40
3,035.56
Crude Oil & Gas Exports
234.13
18.84
315.02
PPT & Royalties
1,628.63
1,403.59
1,661.27
Domestic Crude Oil/Gas
Sales
873.45
618.75
505.71
Others
57.63
59.22
553.55
Non-oil
1,868.66
2,949.69
3,112.73
Corporate Tax
569.06
779.44
748.26
Customs & Excise Duties
418.19
544.59
566.26
Value-Added Tax (VAT)
637.75
1,025.54
919.17
Independent Revenue of
Fed. Govt.
98.40
519.78
530.95
Others*
145.28
80.34
348.08
Total
Deductions/Transfers*
1,099.55
1,181.81
684.02
Federally Collected Rev
(Net)
Less Deductions &
Transfers**
2,722.72
2,363.39
3,676.88
Plus:


Additional Revenue
252.59
125.30
338.51
Excess Oil Revenue
103.97
0.00
0.00
Excess Non-Oil Revenue
11.68
99.02
338.51
Exchange Gain
136.94
26.28
0.00
Total Distributed Balance
3,568.42
3,442.45
4,866.91
Federal Government
1,522.06
1,348.73
2,078.80
State Governments
1,023.43
1,088.41
1,415.37
Local Governments
767.98
805.28
1,060.98
13% Derivation

Half Year 2020
Half Year 2021
Half Year Budget
Oil Revenue
Non-Oil Revenue

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
cent, respectively. Despite the increase in nonoil receipts, it fell short of the proportionate
target by 5.2 per cent.

Figure 22: Composition of Non-Oil Revenue (per cent)
Sources: OAGF and FMFB&NP

b. Oil Revenue
Amidst sustained rise in crude oil prices during the
review period, oil receipts were lower, relative to
the first half of 2020 and the projection for 2021,
due to supply cut agreement. At N2,100.40 billion
(or 2.7 per cent of GDP), oil revenue was 24.8 per
cent and 30.8 per cent, lower than receipts in the
first half of 2020 and the 2021 appropriation
benchmark. This development was associated
with the reduction in Nigeria’s production quota,
from 1.8 mbpd to 1.46 mbpd, in compliance with
the OPEC+ supply cut agreement.

Figure 23: Composition of Oil Revenue (per cent)

Sources: OAGF and FMFB&NP
ii.
Deductions
From the gross revenue of N5,050.10 billion
realised in the first half of 2021, statutory
deductions from oil and non-oil revenue sources
at N737.33 million and N444.48 million,
respectively, left a balance of N3,442.45 billion
for allocation to the three tiers of government.
iii.
Allocations to the three tiers of
government
Gross allocation to the three tiers of government
fell by 13.2 per cent, due largely, to lower revenue
outcomes relative to the first half of 2020.
Disbursement was also 29.3 per cent short of the
target in the 2021 Appropriation Act. The
shortfall in allocation, compounded by low
independent revenue out comes, at the central
and subnational levels, exacerbated fiscal
pressure in the review period.

Figure 24: Distribution to the Three Tiers of Government
and 13% Derivation Fund (N Billion)

Sources: OAGF and Federal Ministry of Finance, Budget &National
Planning

b. Tax Revenue Assessment
Further evaluation of the structure of the
federation revenue in the period shows that oil
and non-oil taxes jointly accounted for 75.6 per
cent of federally collected revenue (gross), while
the balance constituted revenue from crude oil
and gas sales and other non-tax related revenue
sources (including independent revenue sources
of the FGN). Further disaggregation indicates that
income tax (dominated by petroleum profit tax)
was the major contributor to tax revenue,
accounting for 43.2 per cent; consumption tax,
Crude
Oil & Gas
Exports
0.9%
PPT &
Royalties
66.8%
Domestic
Crude Oil &
Gas Sales
29.5%
Others
2.8%

FG
SG
LG
13%
Half Year Benchmark
First Half 2021
First Half 2020
Corporate
Tax
26.4%
Customs &
Excise Duties
18.5%
ValueAdded Tax
34.8%
FGN
Independent
Revenue
17.6%
Other
Transfers
2.7%

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
20.3 per cent; international trade taxes and other
taxes, 12.1 per cent.
In terms of tax-to-GDP ratio, Nigeria recorded 4.8
per cent, compared with the average of 16.5 per
cent in some 30 African countries3. The low ratio
underscores the burgeoning tax expenditure 4
(TE) as a major drainer of tax revenue. Estimated
losses to tax expenditure were put at N1.18
trillion, N3.10 trillion N347.0 billion; N64.0 billion,
for CIT, VAT, customs duties and imports VAT5,
respectively
The introduction of policy reforms, such as the
inclusion of a section on ‘tax expenditure
statement’ in the 2021-2023 MTEF/FSP and
performance management framework, through
the Finance Act 2020, that limits GovernmentOwned Enterprises (GOEs) spending to 50 per
cent of what they generate, are likely to enhance
collection and operational efficiencies of the
GOEs.
3.3.2 Fiscal Operations of the Federal Government
a.
FGN Retained Revenue
Despite declines in statutory receipts from the
Federation Account, the retained revenue of the
FGN increased in the review period, on the back
of significant improvement in its independent
revenue sources. Provisional data on FGN
retained revenue at N2,303.58 billion (2.9 per
cent of GDP), exceeded receipts in the first half of
2020 by 18.3 per cent. The positive outcome
indicated early payoffs from ongoing fiscal
reforms (encapsulated in the Finance Acts, 2019
and 2020), reflected in significant increases in
receipts from FGN independent revenue and
VAT. Regardless of the stronger revenue

3 Revenue Statistics in Africa OECD 2020.
4 Tax revenue foregone, arising from government’s issuance of tax waivers
or concessions to economic agents.
outcome in half-year 2021, the negative impact
of COVID-19 induced shocks still weighed heavily
on fiscal policy, as FGN revenue was 42.3 per cent
below its projection.
Table 9: Federal Government Retained Revenue (N Billion)
Source: OAGF and FMFB&NP
Note*: Includes Transfers from Special Levies Accounts, FGN’s
share of Signature Bonus, Domestic Recoveries, Stamp Duty,
Grants and Donor Funding and Share of NLNG Dividend.

b. Federal Government Expenditure
Aggregate expenditure rose, amidst persisting
revenue shortfalls, as the government grappled
with new and unfolding COVID-19-induced
expenditure exigencies, in addition to rising
interest payments obligations. At N6,632.05
billion (or 8.4 per cent of GDP), provisional
aggregate expenditure of the FGN exceeded the
level in the first half of 2020 by 40.6 per cent. The
increase reflected new and rising spending
priorities to cushion the effect of the pandemic
on the economy. Despite the exigencies of
COVID-19, a partial 6 analysis suggests relative
expansion
in
the fiscal
space,
as nondiscretionary expenditure fell to 60.6 per cent (of
total expenditure), compared with 69.3 per cent
in the first half of 2020.
5 2021 Second Quarter and Half Year Budget Implementation Report,
Budget Office of the Federation.
6 A partial analysis that beams exclusively on the expenditure side, and
particularly the composition of government spending.
Half
Year
Half
Year
Budget

FGN Retained
Revenue
1,947.08
2,303.58
3,993.21
Federation Account
1,308.82
1,141.86
1,772.75
VAT Pool Account
88.97
143.06
127.73
FGN Independent
151.38
519.78
530.95
Revenue
Excess Oil Revenue
54.77
0.00
0.00
Excess Non-Oil
63.96
51.62
0.00
Exchange Gain
5.55
12.19
178.33
Others*
273.64
435.07
1,383.46

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Dynamism in non-discretionary expenditure was
largely driven by debt service obligations, which
accounted for 50.2 per cent of non-discretionary
spending in half year 2021, and increased by 28.0
per cent, relative to the half year 2020. On the
other hand, capital expenditure dictated the level
of discretionary expenditure, constituting 73.7
per cent of its total and jumping 155.2 per cent
over the level in the 2020 half-year.

Table 10: Federal Government Expenditure (N Billion)

Half Year

Half Year

Half Year
Benchmark
Aggregate
Expenditure
4,716.36
6,632.05
6,794.01
Recurrent
3,991.37
4,460.36
4,483.18
of which:


Personnel
Cost
1,426.56
1,616.94
1,686.17
Pension and
Gratuities
180.23
178.66
252.10
Overhead
Cost
725.14
438.45
882.72
Interest
Payments
1,578.66
2,020.17
1,662.19
Domestic
1,326.90
1,523.02
1,191.75
External
251.76
497.15
470.45
Special Funds
80.79
206.14
-
Capital
Expenditure
444.75
1,923.43
2,062.57
Transfers
280.24
248.26
248.26
Source: CBN Staff Estimate

Figure 25: Composition of Federal Government
Expenditure (per cent)

Source: OAGF

Further
analysis
reveals
that
non-debt
expenditure constituted 36.8 per cent of total
expenditure; while debt service accounted for
30.5 per cent and 45.3 per cent of total
expenditure and recurrent expenditure of the
FGN, respectively.
Of the total, recurrent expenditure, which
comprises non-debt expenditure and interest
payments, at N4,460.36 billion (or 5.6 per cent of
GDP), accounted for 67.3 per cent of total
expenditure, while capital expenditure and
transfers were 29.0 per cent (or 2.4 per cent of
GDP) and 3.7 per cent (or 0.3 per cent of GDP) ,
respectively.
Regarding the utilization of capital budget
releases to MDAs, the Office of the National
Security Adviser (ONSA), Defence, Trade and
Investment, and Power ranked highest, while
Aviation, Science and Technology, and Education
ranked least (Figure 26). On average, 54.5 per
cent of capital releases in the 2021 half-year was
utilized.
Figure 26: Capital Budget Utilization by MDAs as at June 31, 2021
Sources: OAGF and BOF, 2021

c. Federal Government Fiscal Balance
The combination of low revenue performance and
elevated expenditure levels culminated in the
deterioration of the fiscal balance in the first half
of 2021. The provisional overall deficit of the FGN
at N4,328.47 billion (or 5.5 per cent of GDP)
expanded by 56.3 per cent and 54.5 per cent,
relative to the 2020 half-year and the budgeted
Recurrent
67.3%
Capital
29.0%
Transfers


percentage of total

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
level, respectively. This reflected persisting
revenue challenge, elevated spending on COVID19 mitigation, and the development of critical
infrastructure, among others. The deficit was
financed from both domestic and external
sources.

Figure 27: Federal Government Fiscal Operations (N Billion)
Source: OAGF and Federal Ministry of Finance, Budget
&National Planning

Table 11: Fiscal Balance Half Year 2021 (N Billion)


Table 12: Economic Classification of Government Expenditure
Half Year 2021


Expenditure (₦’billion)
Percentage share
Administration
Economic services
Social and Comm.
services
Transfers
Recurrent

Capital

Transfers

Source: Staff Estimate


Half Year

2021*
Benchmark
Retained revenue
1,947.08
2,0303.58
3,993.21
Aggregate
expenditure
4,716.36
6,632.05
6,794.01
Primary balance
-1,190.62
-2,308.30
-1,138.62
Overall balance
-2,769.28
-4,328.47
-2,800.81
Deficit-to-GDP (%)
-4.0
-5.5
-3.60
Source: CBN Staff Estimates from available data
Note: * 2021 Figures are provisional

Half Year 2020
Half Year 2021
Half Year Budget
Revenue
Expenditure
Fiscal Bal.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
d. Public Debt Strategy and Sustainability
a. Total Public Debt
Following new borrowings from domestic and
external sources, majorly for the financing of
infrastructural development and legacy liabilities,
public debt position increased.
Total public debt outstanding, constituting
Federal and State governments’ debt, at endJune 2021, stood at N35,465.01 billion or 22.4
per cent of GDP and represented an increase of
14.4 per cent above the level at end-June 2020.
The increase was attributed to new borrowings,
contracted
to
fund
part
of
the

Appropriation Act, and settle inherited arrears of
FGN debts to State governments, oil marketing
companies, exporters, and local contractors. Of
the
total
outstanding debt,
the
Federal
Government owed 83.1 per cent (including FGNguaranteed states’ external debt), while States
accounted for the balance of 16.9 per cent. Given
that the FGN guarantees the external borrowing
by States in line with section 47 (3) of the Fiscal
Responsibility Act 2007, the latter’s share of
external debt (13.6 per cent) was a contingent
liability to the FGN.

Table 13: Total Public Debt (N Billion)
Type
1st Half

1st Half

1st Half

External Debt
8,322.63
11,362.24
13,710.88
Of which:


FGN
7,012.87
9,824.28
11,845.63
States & FCT
1,309.76
1,538.06
1,865.24
Domestic Debt
17,379.02
19,645.40
21,754.13
Of Which:


FGN
13,412.80
15,455.70
17,631.80
States & FCT
3,966.22
4,189.70
4,122.32
Total
25,701.65
31,007.74
35,465.01
Note: End- June 2021 External debt comprises of both FGN, States
and F.C.T as stated on the website of the DMO.
Source: DMO


i.
Federal Government Debt
•
Debt Strategy
FGN debt strategy in the period was underscored
by
the
2020-2023
Medium-Term
Debt
Management Strategy (MTDS), which replaced
the 2016-2019 MTDS and stipulated the
borrowing limits, optimal debt portfolio mix, and
cost-risk tradeoffs that would ensure debt
sustainability.
Table 14: Revised MTDS Targets
Source: 2020-2023 MTDS

•
Debt Stock and Composition
The consolidated debt stock of the Federal
Government, at the end-June 2021, was
N31,342.68 billion. This represents an increase
of 16.9 per cent over the level at the end-June
2020. Given the debt-GDP ratio thresholds of the
2020-2023 MTDS (40.0 per cent); WB/IMF (55.0
per cent) and ECOWAS (70.0 per cent), the FGN’s
debt-to-GDP ratio at 19.8 per cent, remained
decent.
Figure 28: Composition of FGN Debt Stock (N Billion)

Source: Debt Management Office

1st
Half

1st
Half

1st
Half

Local Currency Denominated Debt
Foreign Currency Denominated Debt
Indicator
Targets
Targets
2016-2019
2020-2023
Fiscal Sustainability:
Total Public Debt as %
of GDP
Max. 25%
Max. 40%
Portfolio Composition:

Domestic: External
Debt Mix
Max.60:Min.40
Max.70:Min.30
Refinancing Risk:
Average Tenor of Debt
Portfolio
Min. 10 years
Min. 10 years
Long-Term: Short-Term
Min.75:Max.25
Min.75:Max.25
Domestic Debt Mix

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
In terms of composition, domestic debt was 56.3
per cent of the total commitment, while external
debt accounted for the balance of 43.7 per cent.
Further disaggregation indicated that 17.0 per
cent of the total domestic debt was held in shortterm Nigerian Treasury Bills (NTBs) of between
91-day and 364-day tenors, while the balance
83.0 per cent was held in medium- and long-term
instruments.
Foreign
financing
comprised
loans
from
Multilateral (54.9 per cent of total external debt
stock), Commercial (31.9 per cent), and Bilateral
sources (12.7 per cent). Compared with external
debt composition, in the first half of 2020, the
FGN prioritised Multilateral and Bilateral loans
ahead of Commercial financing. This was
influenced, largely, by its preference for
concessional loans with longer-term moratorium.
Figure 29: Breakdown of External Debt Stock, 2017H1–
2021H1 (US$ Billion)

Source: Debt Management Office (DMO)
•
Debt Service
At N1,431.67 billion, total debt service rose by
19.8 per cent, relative to the first half of 2020.
The sum of N935.46 billion was paid out to
domestic creditors, while external creditors
received N496.21 billion.
As a ratio of revenue and non-debt expenditure,
debt service constituted 62.1 per cent and 58.7

7 These arise from state governments’ contractual obligations, including
their contribution to external debt service fund, payments for fertilizer,
per cent, respectively, reflecting a northward
trend from 61.4 per cent and 49.5 per cent,
respectively, in the half the of 2020. At 1.8 per
cent of GDP, the rising debt-service commitment
constrains government’s capacity to address
more critical development priorities.
Figure 30: Breakdown of Total Debt Service, First Half 2017
– First Half 2021 (N Billion and $ Million Respectively)
Source: DMO
3.3.4
Sub-National Government Fiscal Analysis
a. State Governments and FCT Finances
i.
Revenue
Despite reductions in federation inflow, statutory
receipts by states increased marginally in the first
half of 2021. This was due to improvements in
non-oil revenue components that guarantee
higher statutory allocation to the subnational
units relative to the FGN. At N1,288.44 billion,
state
governments’
gross
revenues
from
statutory sources exceeded the level in the first
half of 2020 by 0.8 per cent. The increase was
attributed to an appreciable improvement in VAT
receipts, resulting from the uptick in economic
activities and sustained implementation of the
Finance Acts.
Considering
subsisting
liabilities,
which
amounted to a deduction of N156.29 billion 7
from states’ Federation Account receipts, a net
State Agricultural Project, National Fadama Project and the National
Agricultural Technology Support Programme.

1st Half 2017
1st Half 2018
1st Half 2019
1st Half 2020
1st Half 2021
Multilateral
Others
-

1,000
1,200
1,400

1,000
1st Half

1st Half

1st Half

1st Half

1st Half

($ Million
₦ Billion
Domestic Debt (LHS)
External Debt (RHS)

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
balance of N1,132.15 billion was distributed to
the states in the review period. This was 8.2 per
cent above the level in the corresponding period
of 2020. A breakdown shows the sources of
states’ statutory revenue in the period to include:
Federation Account, N618.73 billion (54.7 per
cent); VAT Pool Account, N476.87 billion (42.1
per cent); Non-oil Excess N27.21 billion (2.4 per
cent); and Exchange Gain, N9.33 billion (0.8 per
cent).

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Source: Staff compilation using NBS data


Box 3:
Internally Generated Revenue by States in the First Half of 2021
According to data from the National Bureau of Statistics (NBS), total internally generated revenue of the 36 states
and the FCT amounted to N849.12 billion in the first half of 2021, indicating a 13.2 per cent growth. Lagos, FCT
and Rivers led the park, with 31.47 per cent, 8.13 per cent and 6.75 per cent of the total IGR, respectively; while
Taraba, Niger and Yobe, recorded the least collections at 0.47 per cent, 0.56 per cent and 0.64 per cent of total IGR,
respectively. In terms of sources, PAYE contributed the highest (57.48 per cent), distantly followed by remittances
by MDAs (20.44 per cent).

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Figure 31: Composition of State Governments and FCT’s
Revenue First Half 2021 (per cent)

Sources: OAGF & Federal Ministry of Finance, Budget &National
Planning


b. Local Government Finances
The revenue profiles of local governments were
enhanced by improvements in the Federation and
VAT receipts. Total allocations to the 774 local
governments from the Federation Account in the
first half of 2021 was N805.28 billion. This was
4.9 per cent higher than the level in the first half
of 2020 and 24.1 per cent lower than the budget
target.
Receipts from the Federation Account, at
N446.51 billion, accounted for 55.4 per cent;
VAT, N333.81 billion (41.5 per cent); non-oil
excess revenue, N21.42 billion (2.7 per cent); and
exchange gain, N3.53 billion (0.4 per cent).

Figure 32: Composition of Statutory Allocations to Local
Governments, First Half 2021 (per cent)
Sources: OAGF and Federal Ministry of Finance, Budget &National
Planning

The marginal increase in local governments’
statutory receipts was attributed to the gradual
but sustained upturn in economic activities.


Source: Staff compilation from OAGF & FMFB&NP


Federation
Acct
54.7%
VAT
42.1%
Excess
Non-Oil
2.4%
Exchange
Gain
0.8%
Table 15: Subnational Government Revenue
(N Billion)

First Half 2020
First Half 2021
Half Year
Benchmark
State Governments
1,023.43
1,088.41
1,415.37
Local Governments
767.98
805.28
1, 060.98
13% Derivation
254.95
200.03
311.76

State Government Allocations
State
Allocation
(N Billion)
% of Total
Top 3
Lagos
101.24
7.9
Delta
93.49
7.3
Rivers
71.74
5.5
Bottom 3
Ekiti
23.99
1.9
Kwara
23.79
1.8
Nassarawa
23.70
1.8

Local Government Allocations

State
Allocation (N Billion)
% of Total
Top 3
Lagos
61.85
7.7
Kano
44.4
5.5
Oyo
32.5
4.0
Bottom 3
Ebonyi
12.69
1.6
Gombe
11.46
1.4
Bayelsa
9.46
1.2


VAT
41.5%
Exchange
Gain
0.4%
Federation
Account
55.4%
Non-Oil
Excess
2.7%

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
3.4 FINANCIAL DEVELOPMENTS
a. Monetary and Credit Developments
To accelerate growth recovery, the Bank
maintained an accommodative monetary policy
stance in the review period. The development
engendered
improved
money
and
capital
markets, enhanced capital inflows, increased
financial intermediation, and improved financial
sector soundness.

Broad Money Supply
Growth in money supply was driven by claims on
the domestic economy, but remained below
indicative targets for 2021, due to the contraction
in net foreign assets. Broad money supply (M3)
grew by 2.1 per cent to N39,406.65 billion at endJune 2021, compared with 2.6 per cent at endJune 2020. On annualised basis, the growth in M3
stood at 4.2 per cent, which was below the
provisional growth target of 10.0 per cent for
2021.
Domestic claims grew by 3.8 per cent to
N44,385.56 billion at the end-June 2021, due,
wholly, to the increase in claims on ‘Other
Sectors, reflecting the unwavering extension of
funds to the private sector to boost economic
growth. Domestic claims contributed 4.7
percentage points to the growth in M3.
Claims on “Other Sectors” rose by 8.3 per cent to
N32,638.18 billion, compared with 11.0 per cent
at the end-June 2020. The growth was due to the
3.6 per cent, 31.5 per cent and 13.6 per cent
growth in claims on State and Local governments,
Public Non-Financial Corporations, and Private
sectors,
respectively.
Consequently,
the
contribution of claims on ‘Other Sectors’ to the
growth of total monetary assets was 6.4
percentage points, reflecting the Bank’s effort at
stimulating growth in the private sector.
Net claims on the central government contracted
by 7.1 per cent, owing to an increase in central
government deposit liabilities. This led to a 16.2
per cent increase in the liabilities to central
government.
Table 16: Growth in Monetary Assets and Liabilities
(per cent)

Jun

Jun

Jun

Jun

Jun

Net Foreign
Asset

Net Domestic
Asset

Domestic
Claims

Net claims on
Government

Claims on


Other Sectors

Other
financial
corporations


State and
local
government

Public
nonfinancial
corporations

Private sector

Broad money
Liabilities

Currency
outside
depository
corporations
-18.82
-14.74
-14.33


-7.63
-9.91
Transferable
deposits

Other
deposits

Securities
other than
shares

Source: Central Bank of Nigeria

The growth in monetary liabilities was driven by a
2.2 per cent and 4.8 per cent increases in
transferable deposits and ‘other’ deposits of the
Depository Corporations (DCs), respectively. The
development reflected investors’ preference for
higher yield on investments and the use of
alternative
payment
channels,
over
cash
transactions. The growth in narrow money stock
(0.3 per cent) was sluggish, owing to the

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
significant fall in currency outside depository
corporations (-9.9 per cent).
Reserve Money
Reserve money declined by 5.9 per cent to
N12,333.79 billion at end-June 2021. The decline
in reserve money was driven, largely, by the 5.9
per cent fall in liabilities to ODCs

Table 17: Reserve Money (₦ Billion)
Source: Central Bank of Nigeria

Figure 33: Reserve Money (₦ Billion)

Source: Central Bank of Nigeria

Broad money multiplier stood at 2.0 at end -June
2021, down from 2.6 at end-June 2020, reflecting
the high currency ratio of 6.12, compared with
6.08 in the first half of 2020.


8 The Herfindahl-Hirschman Index (HHI) is a concentration measure. A HHI
close to 100 is considered a competitive industry, while a HHI close to 10,000
is highly concentrated.
Figure 34: Currency-Reserve Deposit Ratio and Broad
Money Multiplier

Source: Central Bank of Nigeria

Market Structure of the Banking Industry
The
Nigerian
banking
industry
remained
competitive, but oligopolistic, as six banks
accounted for over 60 per cent of deposits and
assets during the first half of 2021. Industry
competitiveness
was
gleaned
from
the
Herfindhal-Hirschman indices 8 of 936.66 in
deposits and 907.93 in assets, compared with
942.44 and 880.47, respectively, in the first half
of 2020. The share of the largest bank in deposits
and assets was 14.5 per cent and 15.6 per cent,
respectively, absence of a dominant single bank,
although the concentration ratio of six banks
(CR6) stood at 68.8 in deposits and 66.4 in assets.
The percentage shares of the remaining sixteen
banks ranged from 0.1 per cent to 4.5 per cent in
deposits and 0.3 per cent to 4.6 per cent in
assets. Trend analysis of the HHI indicates rising
competition on deposit mobilization over the
past 5 years, even as asset contestation dipped
slightly, at the height of the COVID-19 pandemic
in 2020


Dec 17
Jun 18
Dec 18
Jun 19
Dec 19
Jun 20
Dec 20
Jun 21
N'Billion
TBR
CIC
RM

Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Ratio
Ratio
Currency Deposit Ratio...
Mroad Money Multiplier...

Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Reserve
Money

Currency
in
Circulation

Liabilities
to ODCs


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Figure 35: Market Concentration Ratios of Banks (Assets
and Deposits)
Source: Central Bank of Nigeria

Figure 36: Measures of Competition in Banks: HerfindahlHirschman Index
Source: Central Bank of Nigeria

Consumer Credit
Consumer credit continued to increase, reflecting
a sustained implementation of the LDR policy and
regulatory forbearance granted to banks to boost
household
consumption
and
strengthen
economic activities. Consumer credit rose by
10.6 per cent, to N1,299.44 billion at end-June
2021, compared with N1,175.38 billion in the first
half of 2020, showing a persistent trend since
June 2018. Consumer loans constituted 4.0 per
cent of total credit to other sectors, in the first
half of 2021, compared with 3.8 per cent at the
end of first half of 2020.


Figure 37: Consumer Credit (Levels and as a share of Claims
on Other Sectors)
Source: Central Bank of Nigeria
b. Financial Soundness
The financial sector remained resilient during the
review period, as key financial soundness
indicators
were
within
the
regulatory
requirement. The banking system remained safe
and sound, as the industry capital adequacy ratio
was above the regulatory minimum of 15.0 per
cent for banks with international authorisation
and 10.0 per cent for banks with either national
or regional authorisation. The industry capital
adequacy ratio (CAR) increased to 15.5 per cent
at end-June 2021, following a marginal increase
in qualifying capital.
The industry liquidity ratio was 41.3 per cent in
the first half of 2021, compared with 37.0 per
cent at the end-June 2020. The development
emanated largely from special bills issued to
banks to boost their liquidity position. All
commercial, merchant, and non-interest banks,
except three commercial banks, met the
minimum regulatory liquidity ratio of 30.0 per
cent, 20.0 per cent and 10.0 per cent,
respectively, in the first half of 2021.
The asset quality of the banking industry,
measured by the ratio of non-performing loans to
total loans (NPL ratio), though slightly above the
5.0 regulatory maximum, improved to 5.7 per
cent from 6.4 per cent at end-June 2020. This was
due to sustained recoveries, write-offs, higher

Jun 17
Jun 18
Jun 19
Jun 20
Jun 21
Per cent (%)
CR6 (Deposits)
CR6 (Assets)

Jun

Dec

Jun

Dec

Jun

Dec

Jun

Dec

Jun

Dec

Jun

per cent (%)
₦ Billion
Consumer Credit
Ratio of claims on other sectors

Jun 17
Jun 18
Jun 19
Jun 20
Jun 21
HHI
HHI (Deposits)
HHI (Assets)

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
provisioning, disposals of pledged collaterals, and
improvement in economic activities. Loan loss
provision stood at 98.5 per cent at the end-June
2021, compared with 93.8 per cent in the first
half of 2020.
c. Other Financial Institutions
Following new licenses and upgrade of existing
institutions, the number of OFIs increased, and
further strengthened financial penetration. The
number of Other Financial Institutions (OFIs) rose
to 6,620 at the end-June 2021, compared with
the 6,333 institutions at end-June 2020,
reflecting an increase of 287 OFIs, following a mix
of new licenses, revocation, and upgrade. A total
of 330 new OFIs were licensed (313 Bureaux de
Change,

Finance
Companies
and

Microfinance Banks (MFB), while the Bank
revoked the operating licences of 42 MFBs. The
operating license of one National MFB was
upgraded to a Regional Bank.
Total assets of OFIs, excluding the BDCs, rose by
36.1 per cent to N5,176.36 billion at end-June
2021, compared with N3,802.58 billion at endJune 2020. Similarly, net loans and advances rose
by 41.2 per cent to N2,532.38 billion at the endJune 2021, compared with N1,792.96 billion in
the first half of 2020. Cash and bank balances and
placements increased by 101.6 per cent and 39.5
per cent to N303.24 billion and N816.38 billion at
the end-June 2021, compared with N150.45
billion and N585.11 billion, respectively, at endJune 2020. The increase in total assets was
attributed, largely, to the rise in borrowing, other
liabilities, and long-term liabilities.
Long-term
liabilities
and
other
liabilities
increased by 160.9 per cent and 75.1 per cent to
N596.02 billion and N875.45 billion at the endJune 2021, respectively, compared with N228.49
billion and N499.99 billion at the end-June 2020.
The increase resulted from the re-classification
of the NIRSAL Microfinance on-lending facilities
from the CBN, hitherto recognized as off-balance
sheet, in the balance sheet. Similarly, borrowings
rose by 22.3 per cent to N1,988.25 billion at the
end-June 2021, compared with N1,625.37 billion
at end-June 2020. Shareholders’ funds increased
by 11.2 per cent to N651.04 billion at the endJune 2021, compared with N585.58 billion in the
first half of 2020. The increase in shareholders’
funds was due, largely, to the accretion to
reserves by DFI, FC, and MFB sub-sectors.

Table 18: Other Financial Institutions Consolidated
Balance Sheet (N Billion)
Asset
Jun-20
Jun-21
Cash & Bank Balances
150.45
303.24
Placements
585.11
816.38
Investments
923.07
1,114.39
Net Loans & Advances
1792.96
2,532.38
Other Assets
197.36
248.73
Fixed Assets
153.63
161.24
Total Assets
3,802.58
5,176.36
Financed By:

Share Capital
448.95
468.51
Reserves
136.63
182.54
Shareholders' funds
585.58
651.04
Deposits
844.22
1,034.85
Borrowings
1,625.37
1,988.25
Due to Other Banks
18.93
30.76
Other Liabilities
499.99
875.45
Long-term Liabilities
228.49
596.02
Total Capital & Liabilities
3,802.58
5,176.36
Source: Central Bank of Nigeria

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Development Finance Institutions
The
assets
of
the
development
finance
institutions increased due largely to improved
investments. The total assets of the seven
development finance institutions (DFI)9 increased
by 26.2 per cent to N3,117.74 billion, from
N2,471.00 billion at end-June 2020. Net loans
and advances, and placements increased by 22.6
per cent and 41.4 per cent to N1,385.95 billion
and
N526.75
billion,
respectively,
from
N1,130.89 billion and N372.68 billion in the
corresponding period of 2020.
Similarly, investments rose by 22.5 per cent to
N1,002.36 billion, from N818.16 billion in the
corresponding period of 2020, following the pickup in economic activities. Borrowings and other
liabilities increased by 21.5 per cent and 90.7 per
cent to N1,767.22 billion and N393.22 billion,
respectively, from N1,455.11 billion and N206.16
billion at the end-June 2020. Similarly, long-term
liabilities increased by 89.7 per cent to N50.94
billion from N26.86 billion at end-June 2020.
Shareholders’ funds increased by 16.0 per cent to
N422.26 billion, from N364.10 billion at end-June
2020. The increase was due, mainly, to the
growth in reserves by BOI, DBN, and NMRC. A
disaggregation of the total assets by institution
indicated that BOI, DBN, FMBN, NEXIM, NMRC,
BOA, and TIB accounted for 61.3 per cent, 15.4
per cent, 13.0 per cent, 5.9 per cent, 2.7 per cent,
1.6 per cent and 0.2 per cent, respectively. The
BOI, DBN, FMBN, NEXIM, BOA and NMRC
accounted for 52.3 per cent, 19.5 per cent, 19.0
per cent, 5.0 per cent, 2.9 per cent, and 1.3 per
cent, of total net loans and advances,
respectively.


9 Bank of Industry (BOI); Federal Mortgage Bank of Nigeria (FMBN);
Nigerian Export-Import Bank (NEXIM); Bank of Agriculture (BOA);
Table 19: Development Finance Institutions
Consolidated Balance Sheet
Assets
Jun-20
Jun-21
Cash & Bank
Balances
20.67
71.99
Placements
372.68
526.75
Investments
818.16
1002.36
Loans &
Advances
1,130.89
1,385.95
Other Assets
69.25
65.86
Fixed Assets
59.34
64.83
Total Assets
2471.00
3117.74
Financed By:
0.00
0.00
Paid-Up Capital
238.78
238.78
Reserves
125.31
183.48
Shareholders'
Funds
364.10
422.26
Deposits
413.11
484.01
Borrowings
1,455.11
1,767.22
Due to Other
Banks
5.66
0.09
Other Liabilities
206.16
393.22
Long-Term
Liabilities
26.86
50.94
Total Capital &
Liabilities
2,471.00
3,117.74
Source: Central Bank of Nigeria

Microfinance Banks
Assets of MFBs increased due, to the rise in net
loans and advances. The number of licensed
MFBs stood at 875 at end-June 2021, compared
with 912 MFBs at end-June 2020, following the
licensing of six new MFBs, conversion of one
National MFB to a regional commercial bank, and
revocation of 42 MFB licenses. The 875 licensed
MFBs comprised nine National MFBs, 132 State
MFBs, and 734 Unit MFBs at end-June 2021.
Total assets of the MFBs rose by 91.6 per cent to
N1,223.89 billion, from N638.67 billion at endJune 2020. Net loans and advances and balances
with banks increased by 125.2 per cent and 103.5
per cent, to N739.00 billion and N171.81 billion,
respectively, from N328.18 billion and N84.41
billion at the end-June 2020. The increase was
The Infrastructure Bank (TIB); Development Bank of Nigeria (DBN);
and Nigeria Mortgage Refinance Company (NMRC)

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
due to the rise in long-term loans/on-lending
facilities, takings from Banks and deposits, and
reclassification of CBN on-lending facilities to
NIRSAL Microfinance into their balance sheet.
Similarly, placements with banks increased by
34.3 per cent to N181.51 billion, from N135.13
billion at end-June 2020.
Shareholders’ funds increased by 10.1 per cent to
N144.14 billion, above N130.95 billion at endJune 2020 due, mainly, to capital injection and
accretion to reserves. Deposit liabilities rose by
30.0 per cent to N367.97 billion, from N283.14
billion at end-June 2020. Long-term loans/onlending also increased by 261.4 per cent to
N464.87 billion, from N128.62 billion at end-June
2020. Similarly, other liabilities increased by
164.3 per cent to N230.63 billion, from N87.25
billion in the corresponding period of 2020. The
development was attributed to the CBN
intervention funds channeled to the sub-sector
through NIRSAL MFB as palliatives to cushion the
effect of the COVID-19 pandemic on businesses
and households.
Investible funds available to the sub-sector in the
review period amounted to N585.22 billion,
compared with N160.04 billion at end-June 2020.
The funds were sourced mainly from an increase
in long-term loans (N336.25 billion), other
liabilities (N143.38 billion), and deposits (N84.83
billion). The funds were, mainly, for loans and
advances (N410.82 billion), placements (N46.39
billion), and balances with banks (N87.40 billion).


Table 20: Microfinance Banks Consolidated Balance Sheet
Asset
Jun-20
Jun-21
Cash
6.08
12.42
Balances with
Banks
84.41
171.81
Placement with
Banks
135.13
181.51
Short Term
Investments
18.93
22.55
Long Term
Investments
5.26
6.08
Net Loans and
Advances
328.18
739.00
Other Assets
37.15
62.75
Fixed Assets
23.51
27.75
Total Assets
638.67
1,223.89
Financed By


Paid-Up Capital
80.89
93.29
Reserves
50.06
50.85
Shareholders'
Funds
130.95
144.14
Deposits
283.14
367.97
Takings from
Other Banks
8.71
16.28
Long Term
Loans/OnLending
128.62
464.87
Other Liabilities
87.25
230.63
Total Liabilities
638.67
1,223.89
Source: Central Bank of Nigeria
Finance Companies
The assets of Finance companies increased, due
to the retention of profit, increase in borrowings,
and injection of capital. The number of FCs in
operation increased to 91, at the end of June
2021, compared with 80 at the end of June 2020.
This was occasioned by licensing of 11 new
institutions during the review period to deepen
financial intermediation and stimulate economic
growth.
Total assets of FCs increased by 29.9 per cent to
N333.43 billion, from N256.62 billion at end-June
2020. Similarly, loans and advances increased by
52.7 per cent to N142.69 billion, from N93.44
billion at end-June 2020. Investments and other
assets increased by 89.6 per cent and 22.0 per
cent, respectively, to N20.04 billion and N59.56
billion, from N10.57 billion and N48.84 billion at

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
end-June 2020. However, cash decreased by 58.1
per cent to N2.00 billion, from N4.78 billion at
end-June 2020.
Total liabilities increased, due to the growth in
shareholders’ funds, borrowings, and other
liabilities. Shareholders’ funds increased by 8.8
per cent, to N47.72 billion at end-June 2021,
compared
with
N43.88
billion
in
the
corresponding period of 2020. The development
was as a result of the injection of additional
capital in the review period. Borrowings
increased by 29.8 per cent, to N221.03 billion at
end-June 2021, compared with N170.25 billion at
end-June
2020.
Similarly,
other
liabilities
increased by 50.3 per cent, to N61.44 billion at
end-June 2021, compared with N40.89 billion at
end-June 2020.
Investible funds available to the sub-sector in the
review period amounted to N82.87 billion,
compared with N29.76 billion at end-June 2020,
signifying improvement in financial activities. The
funds were mainly from borrowings (N50.78
billion), paid-up capital (N5.64 billion), (proceeds
from new share issued), and other liabilities
(N20.55 billion). The funds were utilised, to
increase loans and advances (N49.25 billion),
investment (N9.47 billion), and other assets
(N10.72 billion)


Table 21: Finance Companies Consolidated Balance
Sheet
Assets
Jun-20
Jun-21
Cash
4.78
2.00
Balances with Banks
17.96
22.20
Placements
30.37
37.76
Investments
10.57
20.04
Net Loans and Advances
93.44
142.69
Other Assets
48.84
59.56
Fixed Assets
50.67
49.18
Total
256.62
333.43
Financed By:


Paid-Up Capital
22.07
27.72
Reserves
21.81
20.01
Shareholders' Funds
43.88
47.72
Long Term Loans Liabilities
1.60
3.23
Total Borrowings
170.25
221.03
Other Liabilities
40.89
61.44
Total
256.62
333.43
Source: Central Bank of Nigeria

Primary Mortgage Banks
The number of primary mortgage banks remains
unchanged. However, the total assets increased,
owing, largely, to the growth in net loans and
advances. There were 34 licensed operating
PMBs, comprising 12 national and 22 state PMBs,
which was the same as at end-June 2020. Total
assets of the PMBs increased by 14.9 per cent, to
N501.30 billion, from N436.29 billion at end-June
2020. Net loans and advances increased by 10.1
per cent, to N264.74 billion, from N240.45 billion
at end-June 2020.
Placements and balances with banks rose by 49.9
per cent and 40.4 per cent, to N70.35 billion and
N19.80 billion, respectively, at end-June 2021,
from N46.94 billion and N14.10 billion at endJune 2020. However, investment in quoted
shares and investment/non-current assets held
for sale decreased by 34.2 per cent and 12.8 per
cent, to N8.22 billion and N43.64 billion,
respectively, from N12.49 billion and N50.20
billion in the corresponding period of 2020.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Shareholders’ funds declined by 20.9 per cent, to
N36.92 billion, from N46.65 billion at end-June
2020. This was due, largely, to increase in nonperforming loans, occasioned by lull in economic
activities, following the COVID-19 pandemic.
However, deposits and other liabilities increased
by 23.6 per cent and 14.8 per cent, respectively,
to N182.87 billion and N190.16 billion, above
N147.98 billion and N165.68 billion at end-June
2020.
Investible funds available to the sub-sector
amounted to N87.55 billion, compared with
N21.04 billion at end-June 2020. The funds were
sourced mainly from an increase in deposits
(N34.90 billion); due to other banks (N9.82
billion), other liabilities (N24.47 billion), and a
decline in investment/non-current assets held for
sale (N6.39 billion). The funds were utilised,
mainly for loans and advances (N24.29 billion),
placement with banks (N23.42 billion), and other
assets (N18.44 billion).
Table 22: Primary Mortgage Banks Consolidated Balance
Sheet
Assets
Jun-20
Jun-21
Cash
1.07
1.09
Cash Reserve Requirement
1.37
1.93
Balances with Banks
14.10
19.80
Placement with Banks
46.94
70.35
Investments/Non-Current Held For Sale
50.02
43.64
Short Term Investments
7.62
11.50
Investment in Quoted Shares
12.49
8.22
Loans and Advances
240.45
264.74
Other Assets
42.11
60.56
Fixed Assets
20.10
19.48
Total
436.29
501.30
Financed By:


Paid-Up Capital
107.20
108.72
Reserves
(60.55)
(71.80)
Shareholders' Funds
46.65
36.92
Deposits
147.98
182.87
Due to Other Banks
4.57
14.39
Long-Term Loans/NHF
71.41
76.97
Other Liabilities
165.68
190.16
Total
436.29
501.30
Source: Central Bank of Nigeria


Bureau-De-Change
The number of licensed BDCs stood at 5,613 as at
end-June 2021, compared with 5,300 at end-June
2020. The rise was occasioned by the licensing of
313 new institutions in the review period. The
increase in the review period was aimed at
deepening the retail segment of the foreign
exchange market.
Examination of Other Financial Institutions
The Bank conducted a routine and special
examination of 258 OFIs in the first half of 2021
to ensure compliance with extant regulations.
The exercise covered Risk-Based Supervision
(RBS) of 152 BDCs and 25 Systemically Important
Other Financial Institutions (SIOFIs), comprising
13 MFBs, 8 PMBs and 4 FCs. Other OFIs examined
included the special examination of 61 MFBs on
“Watch List”, 12 PMBs and 8 FCs with critical
regulatory issues to ensure compliance with the
extant regulations.
The scope of the RBS examination of the 152
BDCs covered a review of corporate governance
practices, sources of foreign exchange and its
utilisation, rendition of returns, adequacy of
documents for foreign exchange transactions,
and compliance with relevant regulations. Six of
the BDCs were not physically present at their
registered addresses, hence, not examined.
Money Laundering and Financing of Terrorism
(ML/FT) risks were evaluated in line with the
GIABA assessment requirements. The result of
the Composite Risk Rating (CRR) of the 146 BDCs
showed one “Low,” 4 “Moderate,” 78 “Above
Average,” and 63 “High.” Also, the examination
revealed some infractions of extant regulations
and erring institutions were appropriately
sanctioned.
Existence checks were conducted on the 61 MFBs
on “Watch List” to assess their capital levels, in

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
line with the final re-capitalisation deadline of
April 2022. The exercise revealed that 12 MFBs
were in operation, 33 had shut down, 11 were
inactive, and 5 were undergoing restructuring.
The average CAR, LR, and portfolio-at-risk (PAR)
of the 12 MFBs contracted by 50.7 per cent,
161.9 per cent and 74.0 per cent, respectively. 4
of the MFBs met the minimum capital adequacy
ratio of 10.0 per cent, 9 met the minimum
liquidity ratio of 20.0 per cent, while one MFB
operated within the maximum PAR of 5.0 per
cent.
Similarly, the Target Examination of the 12 PMBs
revealed that 11 PMBs were in operation while
one was undergoing restructuring. The adjusted
capital and capital adequacy ratios of the 11
PMBs were below the minimum regulatory
requirements, while 4 met the minimum liquidity
ratio of 20.0 per cent. Similarly, the Target
Examination of the 8 FCs revealed that
2 FCs were “Sound,” one “Technically Insolvent”,
2 inactive, while 3 could not be rated as they
were not carrying out finance business.
Consequently, the 3 institutions were advised to
apply for a Payment Services Bank (PSB) license.

Supervisory Letters were issued to the erring
institutions, with regulatory directives to inject
additional capital, effect sound corporate
governance, ensure compliance with extant laws
and
regulations,
and
implement
all
recommendations.
Highlights of the RBS examination reports of the
SIOFIs are indicated in Table 23.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Table 23: RBS Examination Reports of the Systemically Important Other Financial Institutions
OFIs
Composite Risk Rating
(CRR)
NPL
Earnings Rating
Capital Rating
Prudential and Soundness
Analysis
Primary
Mortgage
Banks
1 = Low
The average NPL
Ratio of 77.9 per
cent was above
the regulatory
maximum of 30
per cent.
1 = Strong
3 = Strong
Average CAR and liquidity
ratio of 55.7 per cent and
129.5 per cent, respectively
and above the regulatory
minimum of 10 and 20 per
cent
3 = Moderate
4 = Acceptable
3 = Acceptable
2 = Above Average
3 = Needs
Improvement
2 = Needs
Improvement
2 =High


Finance
Companies
1 = Low
The average NPL
of 17.7 per cent
was above the
regulatory
maximum of 10
per cent.
1 = Strong
1 = Strong
The average CAR was 19.4 per
cent was above the 12.5 per
cent regulatory requirement.
1= Above Average
1 = Needs
Improvement
2 = Acceptable
2 = High
2 = Weak
1 = Weak
Microfinance
Banks
4 = Moderate
Average PAR was
25.9%, above the
regulatory
maximum of 5%
5 = Acceptable
5 = Strong
The average CAR and liquidity
ratio were 27.6 and 57.4 per
cent, respectively. These were
above
the
regulatory
minimum benchmarks of 10
and 20 per cent.
7 = Above Average
6 = Needs
Improvement
5 = Acceptable
2 = High
2 = Weak
2 = Needs
Improvement


1 = Weak
Source: Central Bank of Nigeria
d. Financial Markets
The accommodative monetary policy stance aimed
at supporting macroeconomic recovery led to
improved performance in the money and capital
markets in the first half of 2021. However, the
liquidity condition in the banking system was
relatively tight, resulting in high interest rates.
i.
Money Market Developments
Liquidity levels in the review period were
influenced by the effects of Cash Reserve Ratio
(CRR),
settlement
for
foreign
exchange
interventions, CBN Bills repayments, and fiscal
activities. Conversely, the sale of CBN bills
moderated the banking system’s liquidity levels,
and significantly impacted money market rates.

Interest Rate Developments
Money market rates trended upwards in the first
half of 2021, following liquidity constraints in the
banking system. The weighted average inter-bank
call and the OBB rates stood at 14.83 per cent and
12.32 per cent, respectively, compared with 7.21
per cent and 8.35 per cent in the first half of 2020.
Further investigation shows that the spike in rates
in April 2021 was due to liquidity squeeze, arising
from CRR and naira debits for foreign exchange
transactions.
Table 24: Money Market Rates, Weighted Average (per cent)

MPR
Call Rate
OBB Rate
Jan-21
11.5
4.4
3.3
Feb-21
11.5
11.7
8.7
Mar-21
11.5
10.1
12.6
Apr-21
11.5
30.0
16.8
May-21
11.5
16.0
16.2
Jun-21
11.5
16.9
16.4
2021H1
11.5
14.83
12.32
2020H1
13.17
7.21
8.35
Source: Central Bank of Nigeria

Deposit and Lending Rates
Trends
in
lending
rates
reflected
the
accommodative stance of monetary policy, with
the average MPR at 11.50 per cent in the first half
of 2021, compared with 13.17 per cent in the first
half of 2020. Consequently, the prime and
maximum lending rates fell by 3.72 percentage
points and 2.06 percentage points to 11.28 per cent
and 28.60 per cent, respectively, in the first half of
2021, from their levels in the first half of 2020.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

Figure 38: DMBs Deposits and Lending Rates (per cent)

Source: Central Bank of Nigeria

Deposit rates also mirrored the trend in lending
rates as the average term deposit rates fell by 1.93
percentage points to 4.11 per cent below the level
in the first half of 2020. Consequently, the spread
between the average term deposit and maximum
lending rates widened by 0.18 percentage points,
to 26.44 per cent.

Open Market Operations
Open Market Operation (OMO) remained the main
tool for liquidity management, boosting tradable
securities and deepening secondary market
activities. CBN Bills offered at the open market
amounted to N7,456.08 billion, with total public
subscription and sales at N11,257.90 billion and
N7,339.34 billion, respectively, compared with
N6,387.76 billion, N8,567.22 billion, and N6,453.88
billion, issued, subscribed to, and sold, respectively,
in the first half of 2020.

Primary Market Activities
The total value of the Nigerian Treasury Bills (NTBs)
issued and allotted amounted to N1,665.62 billion
apiece, indicating an increase of N149.94 billion or
9.9 per cent, above the level in the first half of 2020.
The total value of public subscriptions stood at
N3,101.23 billion, compared with N2,904.16 billion
in the first half of 2020. The increase in public
subscription was ascribed to higher yields,
following the government’s restructuring of the
domestic debt favoring longer tenor instruments.
The successful bid rates were lower in the review
period, at 1.50 per cent (±1.00), for the 91-day;
2.25 per cent (±1.25) for the 182-day; and 5.63 per
cent (±4.12) for the 364-day tenors. These compare
with 2.65 per cent (±0.85) for the 91-day, 3.47 per
cent (±1.43) for the 182-day, and, 5.15 per cent
(±1.39) for the 364-day tenors, in the first half of
2020. The lower yields reflected increased demand
for securities, arising from the uptick in economic
activities.
Of the total NTBs allotted, banks, including foreign
investors, took up N1,254.40 billion or 73.59 per
cent, Mandate and Internal fund customers
(including CBN Branches) accounted for N411.23
billion or 24.13 per cent, while merchant banks held
N38.88 billion or 2.28 per cent.
Figure 39: Nigeria Treasury Bills Outstanding (N Billion)
Source: Central Bank of Nigeria

The value of NTBs outstanding stood at N2,991.87
billion at end-June 2021, representing an increase
of 8.4 per cent, compared with its value in the first
half of 2020. Of the total, the share of DMBs
increased to 24.3 per cent, compared with 21.1 per
cent in the first half of 2020. Mandate (parastatals)
and Internal Funds customers took up 52.4 per
cent, while merchant banks and CBN accounted for
0.5 per cent and 22.8 per cent, respectively.

2018-H1
2019-H1
2020-H1
2021-H1
Average Term Deposit Rates
Prime Lending
Maximum Lending
Savings

2 0 1 6 H 1
2 0 1 7 H 1
2 0 1 8 H 1
2 0 1 9 H 1
2 0 2 0 H 1
2 0 2 1 H 1

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Figure 40: Holdings of Outstanding NTBs (per cent)
Source: Central Bank of Nigeria

Federal Government of Nigeria Bonds
FGN Bonds, valued at N900.00 billion, were offered
to the public, while subscription and sale stood at
N1,726.40
billion
and
N1,415.00
billion,
respectively. The amount offered covered new
issues and re-openings of FGN Bonds. In the first
half of 2020, FGN Bonds issues, subscriptions, and
allotment amounted to N615.00 billion, N2,449.97
billion, and N1,308.58 billion, respectively. The
increase in offer and allotment was attributed to
the restructuring of domestic debt favoring longer
tenor instruments to reduce the burden of
domestic debt service.

Consequently, the total value of FGN Bonds
outstanding at end-June 2021 stood at N13,659.66
billion, compared with N11,673.84 billion at endJune 2020, indicating an increase of N1,985.82
billion or 17.2 per cent. The structure of holdings
showed that N6,892.36 billion, or 50.5 per cent,
was held by commercial banks, N6,620.66 billion,
or 48.4 per cent, was held by non-bank public, while
merchant banks held the balance of N146.64
billion, or 1.1 per cent.

Figure 41: FGN Bonds Holders (End-June 2021, per cent)
Source: Central Bank of Nigeria

Discount Window Operations
The total request for repurchase transactions
increased in the first half of 2021, due to the
preference for tenured funds over the overnight
facility. The total request for repurchase (repo)
transaction rose significantly by 863.7 per cent, to
N6,370.40 billion in the first half of 2021, compared
with N661.03 billion in the first half of 2020.
Applicable interest rates in the review period were
16.5 per cent (±0.50) for the 4 to 90-day tenors,
from January to April 13, 2021, and 14.5 per cent
(±0.50) from April 14 to June 30, 2021. Accordingly,
the total interest earned on the repo was N53.83
billion, compared with N10.75 billion earned in the
first half of 2020. The high level of demand for repo
underscored the tight liquidity condition in the
market.

Standing Facilities
The patronage of Other Depository Corporations at
the Standing Lending Facility window increased in
the first half of 2021 due to tight liquidity conditions
in the banking system. The ODCs increased their
patronage of the Bank’s Standing Lending Facility
(SLF) window to square up their positions in the first
half of 2021. The average daily request for SLF was
N83.68 billion in 109 business days, out of which,
Intraday Liquidity Facility conversion was N28.73
billion. The average daily interest earned was N0.05

DMBs
Merchant
Banks
Parastatals
CBN

2020H1
2021H1
48.4%
51.6%
Non-Bank Public
DMBs & Merchant

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
billion. Comparatively, in the first half of 2020, the
average daily request for SLF was N34.05 billion in
95 business days, out of which ILF conversion was
N12.11 billion, while the average daily interest
income was N0.02 billion. The higher recourse to
the window in the first half of 2021 reflected tight
liquidity conditions in the banking system.
Patronage at the Standing Deposit Facility (SDF)
window declined to an average daily amount of
N15.11 billion for the 120 business days in the first
half of 2021, from N25.14 billion for the 123
business days in the corresponding period of 2020.
The decline in SDF was driven, largely, by tight
liquidity conditions, amid the search for alternative
money market investments. Consequently, average
daily interest payments on the deposits declined to
N2.38 million in the review period, from N9.61
million in the corresponding period of 2020.
Following a more accommodative policy stance
relative to the first half of 2020, applicable rates for
the SLF and SDF, anchored on the MPR, were 12.50
per cent and 4.50 per cent from January to June
2021. At that level, it was an ease from the first half
of 2020 where the applicable rates were higher at
14.50 per cent and 7.50 per cent for the SLF and
SDF, respectively.
Inter-bank Transactions
Activity at the inter-bank call segment of the market
was relatively low in the first half of 2021, with more
patronage at the collateralised market segment.
During the period under review, the total value of
transactions at the interbank funds market stood at
N26,076.17 billion. This represented a decline of
10.1 per cent, compared with the N29,005.76
billion recorded in the corresponding period of
2020. Further analysis shows more patronage of
the Open-buy-back (OBB), which is attributed,
largely, to the low-risk appetite by market
participants
for
non-collateralized
lending.
Accordingly, transactions at the OBB segment, at
N25,861.77 billion, accounted for 99.2 per cent,
while the non-collateralized inter-bank call took up
the balance of N214.40 billion or 0.8 per cent.

OTC Transactions in NTBs and FGN Bonds
OTC transactions in NTBs and FGN Bonds declined
in the first half of 2021 as investors’ patronage
waned. OTC transactions in NTBs amounted to
N30,444.57 billion in the first half of 2021,
indicating a decline of N9,283.67 billion or 23.37
per cent below the N39,728.24 billion recorded in
the first half of 2020. Generally, the declining trend
in OTC transactions was attributed to tapered
patronage by foreign and institutional investors.
Similarly, transactions in FGN Bonds amounted to
N9,931.19 billion, indicating a decline of N3,318.48
billion or 25.1 per cent below the level of
N13,249.67 billion in the first half of 2020.
Figure 42: OTC Transactions (N billion)

Source: Central Bank of Nigeria


NTBs
FGN
Bonds
First Half 2020
First Half 2021

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

ii.
Developments in Capital Market
Activities on the Nigerian equities market were
bullish in the first half of 2021, as the NGX All-Share
Index and aggregate market capitalisation rose
relative to the levels at end-June 2020. The
improved market performance was due to the
rebound in global crude oil prices and bargainhunting activities by investors who sought to take
advantage of undervalued stocks. Furthermore,
there was a new listing of 10.0 million units of 12.0
per cent Fixed Rate Series 1 Subordinated
Unsecured Bonds in the debt segment of the
market during the first half of 2021.
The aggregate volume and value of traded
securities rose by 9.6 per cent and 3.1 per cent,
respectively, to 45.98 billion shares and N519.25
billion, in 555,042 deals at the end-June 2021,
compared with 41.96 billion shares, valued at
N503.63 billion and traded in 569,144 deals in the
first half of 2020. The equities sub-sector
maintained
its
dominance
in
the
market,
accounting for 99.9 per cent and 98.1 per cent of
the aggregate volume and value of transactions,
respectively, while the debt and Exchange Traded
Fund (ETF) segments accounted for the balance.
Sectoral analysis of the market indicates that the
financial services sector (measured by the volume
of transactions), remained the most active,
accounting for 29.80 billion shares (64.8 per cent),
valued at N244.11 billion (50.5 per cent), in 296,513
deals (53.4 per cent). Comparatively, the sector
accounted for 32.59 billion shares (77.7 per cent),
valued at N302.13 billion (61.2 per cent) in 339,396
deals (59.6 per cent) in the first half of 2020.


Figure 43: Volume and Value of Transactions at the NSE

Source: Securities and Exchange Commission (SEC)/Nigerian
Exchange Group (NGX) Limited

As the global economy continued to grapple with a
surge in the COVID-19 Delta variant infections,
coupled with uncertainty in the economic outlook,
the share of portfolio investments fell in the first
half of 2021. Analysis of investors’ activities in the
market showed that domestic investors' total value
outperformed transactions executed by foreign
investors by 57 percentage points. Domestic and
foreign investors’ participation constituted 78.5 per
cent and 21.5 per cent of the total transactions,
respectively, in the first half of 2021, compared

First half 2019
First Half 2020
First Half 2021
Value in Naira (billion)
Volume in Number (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)
Box 4
New Developments in the Capital Market
To
enhance
transparency
and
global
competitiveness, improve corporate governance,
and
access
to
capital
to
fund
strategic
developments, the Nigeria Stock Exchange (NSE)
was demutualised to the Nigerian Exchange Group
(NGX). The NGX has three operating subsidiaries,
namely: Nigerian Exchange Limited (NGX Limited),
the operating exchange; NGX Regulation Limited
(NGX
REGCO),
the
independent
regulation
company; and NGX Real Estate Limited (NGX
RELCO), the real estate company. The three entities
were duly registered at the Corporate Affairs
Commission (CAC).

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
with 60.5 per cent and 39.5 per cent in the first half
of 2020.
NGX All-Share Index
The All-Share Index improved in the first half of
2021, due to positive investors’ sentiment amid
increased buy-interest in blue-chip stocks. The NGX
All-Share Index stood at 37,907.28 at end-June
2021, indicating an increase of 54.9 per cent,
compared with 24,479.22 at end-June 2020.
Figure 44: All-Share Index and Market Capitalisation

Source: Securities and Exchange Commission (SEC) and Nigerian
Exchange Group (NGX) Limited

Market Capitalisation
Market capitalisation increased as a result of
bargain hunting and price gains in blue-chip stocks.
The aggregate market capitalisation of the 295
listed securities closed at N37.16 trillion in the first
half of 2021, indicating an increase of 35.3 per cent,
compared with the first half of 2020. The rise
reflected an increase in the value of securities
across different asset classes (equities, debt, and
ETF). Listed equities accounted for 52.5 per cent of
the aggregate market capitalisation, while the debt
and ETF components accounted for the balance of
47.5 per cent.
The market capitalisation of the 155 listed equities
rose by 54.7 per cent to N19.77 trillion at the endJune 2021, compared with the level at end-June
2020. The top 20 most capitalised companies on
the Exchange accounted for 92.6 per cent (N18.31
trillion) of the total equity capitalisation and 49.3
per cent of the aggregate market capitalisation.
The number of banks that made the list of the top
20 most capitalised companies declined to seven in
the first half of 2021, from eight in the first half of
2020, accounting for N3.12 trillion or 15.8 per cent
of the total equity market capitalisation, compared
with 18.5 per cent in the first half of 2020.

iv. Institutional Savings
Aggregate financial savings rose by 13.7 per cent,
to N23,044.50 billion, from N20,259.34 billion at
end-June 2020. The increase reflected the
accumulation of capital stock for investment to
spur higher output growth. Further analysis on
financial savings showed that banks (commercial,
merchant, and non-interest banks) remained the
dominant depository institutions in the financial
system, accounting for 93.7 per cent of total
financial savings, compared with 92.9 per cent in
the first half of 2020. Other institutions, comprising
PMBs, MFBs, life insurance companies, pension
fund custodians, and the Nigerian Social Insurance
Trust Fund (NSITF), accounted for the balance of
6.3 per cent.

e. Developments on Financial Stability and MacroPrudential Policy
The Bank continued to proactively deploy macroprudential and other early warning tools to mitigate
risks and vulnerability, and ensure financial system
stability.
•
Solvency Stress Tests and Liquidity Simulations
The banking industry's solvency and liquidity
positions generally remained robust in the review
period. In addition, the banking industry's solvency
and liquidity positions under mild to moderate
scenarios of sustained economic contraction

June-2019
June-2020
June-2021
Naira (billion)
Index
All-Share Index (LHS)
Market Capitalisation (RHS)

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
remained robust, but vulnerable under a severe
scenario of sustained economic contraction.
Table 25: Banking Industry Baseline Selected Key Indicators

CAR
LR
NPLs
ROA
ROE
Jun 2021 (%)

Dec 2020

Percentage
point(s)
Change

Benchmarks
(%)
10.0 -
15.0

-
-
Source: Central Bank of Nigeria

The baseline CAR, LR, and NPL ratios in the review
period were 15.5 per cent, 41.3 per cent, and 5.7
per cent, respectively, while ROA and ROE stood at
1.2 per cent and 14.3 per cent, respectively. Thus,
the CAR and LR out did the regulatory
requirements, while the NPL was marginally above
its maximum threshold.

Figure 45: Banking Industry CAR (per cent)

Source: Central Bank of Nigeria

Credit Risk
The stress test revealed that the banking industry
could withstand a shock of “up to 100.0 per cent
increase” in the industry NPLs, as the CAR remained
above the regulatory requirement of 10.0 per cent
at the end-June 2021.


Table 26: Impact of Credit Default Shocks on Banking Industry
CAR (per cent)
Single Factor Shocks
End-Dec

End-June

Baseline CAR
14.83
15.46
Post-Shock CAR
10% NPLs increase
14.33
15.06
15% NPLs increase
14.08
14.87
20% NPLs increase
13.83
14.67
30% NPLs increase
13.32
14.27
50% NPLs increase
12.29
13.45
100% NPLs increase
9.6
11.35
Source: Central Bank of Nigeria

Similarly, the credit concentration stress test
showed the resilience of the banking industry as
CAR remained above the 10.0 per cent regulatory
threshold under scenarios 1, 2, and 3.
Table 27: Impact of Credit Concentration Risk on Banking
Industry CAR (per cent)

Dec-20
Jun-21
Baseline CAR
14.83
15.46
Single Factor Credit Concentration Shocks
Scenario 1
14.22
14.89
Five largest corporate credit
facilities shifted from passthrough to sub-standard
(10%)
Scenario 2
13.29
14.03
Five largest corporate credit
facilities shifted from substandard to doubtful (50%)
Scenario 3
11.7
12.56
Five largest corporate credit
facilities shifted from
doubtful to lost (100%)
Source: Central Bank of Nigeria


D E C
' 1 7
J U N '
1 8
D E C
' 1 8
J U N '
1 9
D E C '
1 9
J U N '
2 0
D E C '
2 0
J U N '
2 1
Per Cent

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Figure 46: Credit Concentration Risk (per cent)

Source: Central Bank of Nigeria

Sector Credit Concentration Risk
A breakdown of the banking industry total credit by
sector at end-June 2021 showed that oil and gas
sector accounted for 24.3 per cent; manufacturing,
16.6 per cent; government, 15.5 per cent; general,
5.7 per cent; general commerce, 6.5 per cent;
finance and insurance, 5.6 per cent; and others,
25.85 per cent.

Figure 47: Sectoral Concentration of Credit (per cent)

Source: Central Bank of Nigeria

The stress test results showed that the banking
industry could withstand a shock of up to 50.0 per
cent in exposure to oil and gas, as the post-shock
CAR stood at 10.1 per cent.


Table 28: Stress Test on Oil and Gas Exposures

Industry CAR (%)
Baseline CAR
15.46
30% Default on total
exposure to Oil and
Gas
14.77
50% Default on total
exposure to Oil and
Gas

Source: Central Bank of Nigeria

Liquidity Stress Test:
Liquidity stress tests were conducted at the end- of
June 2021, using the Implied Cash Flow Analysis
(ICFA) and Maturity Mismatch/Rollover Risk
approaches to assess the resilience of individual
banks and the banking industry to liquidity and
funding shocks.

The result reveals that after a one-day run scenario,
the liquidity ratio for the industry declined to 32.60
per cent, from the 41.34 per cent baseline position.
Similarly, under the 5-day and 30-day scenarios, the
liquidity ratio for the industry declined to 15.09 and
10.69 per cent, indicating N3.12 trillion and N3.82
trillion liquidity shortfalls, respectively.

Figure 48: Industry Liquidity Ratios at Periods 1-5 and
Cumulative 30-day Shocks (per cent)
Source: Central Bank of Nigeria


Baseline
Scenario 1 (10%) Scenario 2: Credit
facilities shifted
from Doubtful to
Lost (50%)
Scenario 3: Credit
facilities shifted
from Doubtful to
Lost (100%)
Oil and Gas
24.30%
Manufacturing
16.58%
Government
15.48%
General
5.70%
Gen Comm
6.53%
Finance and
Insurance
5.56%
Others

P R E -
S H O C K
A F T E R
D A Y 1
A F T E R
D A Y 2
A F T E R
D A Y 3
A F T E R
D A Y 4
A F T E R
D A Y 5
A F T E R
C U M 3 0
D A Y S
Dec-20
Jun-21

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Table 29: Liquidity Stress Test Results (Post-shock)
Scenario
Banks with
Jun-21
Liquidity Ratios (LR)
< 30%
Dec-20
Jun-21
LR (%)
Shortfall to
30% LR
threshold
(27 DMBs)
(28 DMBs)
(N’ billion)
Test 1: Implied Cash Flow Test
Day 1

32.6
Nil
Day 2

28.54
360.23
Day 3

24.33
1,325.70
Day 4

19.88
2,242.12
Day 5

15.09
3,122.37
Implied Cash
Flow Test (30
Days)

10.69
3,816.54
Source: Central Bank of Nigeria

Maturity Mismatch
Other depository corporations (ODCs)’s credit
maturing within one year accounted for 51.3 per
cent of total deposit. The medium-term and longterm maturities stood at 17.0 per cent and 31.7 per
cent, respectively. Similarly, short-term deposits (of
less than one-year maturity) at the end of the first
half of 2021 constituted 89.8 per cent of total
deposit. Further analysis showed that the medium-
and long-term deposits constituted 4.0 per cent
and 6.2 per cent, respectively. Thus, the mismatch
between short-term liabilities and long-term assets
remained a major constraint to ODCs.
The industry baseline assets and liabilities maturity
profile at end-June 2021 revealed that the shorter
end of the market (≤90-day bucket) were
adequately funded. On a bank-by-bank basis, eight
banks were not adequately funded. However, the
cumulative position for the industry showed an
excess of N2.35 trillion assets over liabilities.
Analysis of Test 2A (Descriptive Maturity Mismatch)
showed that the banking industry was adequately
funded, while under Test 2B (Static Rollover Risk
Analysis) and 2C (Dynamic Rollover Risk test), the
industry had mismatches of N5.20 trillion and
N7.67 trillion, respectively. These represented a
decrease of N0.13 trillion and N0.1 trillion under
the Test 2B and Test 2C, respectively, relative to the
end-December 2020 test.

Table 30: Maturity Profile of Assets and Liabilities,
End-June 2021
Bucket
Liabilities
Assets
Mismatch
Cumulative
Mismatch
≤30 days

31-90 days

days

days

1-3 years

>3 years

Total
36,651.74
8,997.66


Source: Central Bank of Nigeria

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Table 31: Test Results for System-Wide Maturity Mismatch

Test 2A[1]
Test 2B[2]
Test 2C[3]

N’ bn
No of
banks
with
mismatch
N’ bn
No of
banks
with
mismatch
N’ bn
No of
banks
with
mismatch
≤30 days
13,201.12

7,905.40

-
1,063.66

31-90
days
4,470.29

-902.69

-340.11

91180days
3,494.65

-1,163.83

-198.4

181365days
2,205.81

-2,398.39

-
1,085.94

1-3 Years
1,631.76

-3,204.15

-874.28

Above 3
years
-1,057.03

-5,439.00

-
4,103.29

Total

Source: Central Bank of Nigeria
10[1] Note: Test 2A: Descriptive Maturity Mismatch with no consideration for rollover.
11[2] Test 2B: Static Rollover Risk Analysis with no closing of liquidity gaps in other buckets.
Gggg 12[3] Test 2C: Dynamic Rollover Risk Test with use of liquid assets to close liquidity gaps in other buckets.

Contagion Risk Analysis
Contagion risk analysis indicated an increase in
exposure and interconnectedness (via interbank
placement and takings). The total exposure
increased by N154.30 billion, representing 28.02
per cent, from N396.34 billion in December 2020,
to N550.64 billion in June 2021.
Six banks accounted for 68.7 per cent (N378.16
billion) of total placements and 78.8 per cent
(N433.88 billion) of total takings. Of this, the top
four placers of funds provided 60.9 per cent
(₦264.03 billion).


Figure 49: Network Analysis based on Interbank Exposures


.


Source: Central Bank of Nigeria
Note: Blue = Lenders
Deep blue = Net placement
Red = Borrowers

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Box 5: Liquidity Stress Test Assumptions

Implied Cash Flow Analysis
The Implied Cash Flow Analysis (ICFA) assesses the ability of the banking system to withstand
unanticipated substantial withdrawals of deposits, short-term wholesale and long-term
funding over 5 days and cumulative 30 days, with specific assumptions on fire sale of assets.
The test assumed gradual average outflows of 3.8, 5.0 and 1.5 per cent of total deposits,
short-term and long-term funding, respectively, over a 5-day period and a cumulative
average outflow of 22.0 per cent, 11.0 per cent and 1.5 per cent of total deposits, short-term
and long-term funding, respectively, on a 30-day balance. It also assumed that the assets
would remain unencumbered after a fire sale.
Item No
Assets
% Unencumbered
1.
Cash and cash equivalents

2.
Current account with CBN

3.
Government bonds,
treasury bills and other
assets with 0% riskweighting
66.5
4.
Certificates of deposit held
66.5
5.
Other short-term
investments

6.
Collateralized placements
and money at call

7.
CRR

•
The Maturity Mismatch/Rollover Risk
This assesses funding maturity mismatch and rollover risk for assets and liabilities in
the 1-30- and 31-90-day buckets, with assumptions of availability of funding from
the CBN and intra-group as described below:
• Test 2a: Descriptive Maturity Mismatch assumed that the baseline mismatch
remained, but 5.0 per cent of total deposits would be made available from the
CBN and the intra-group.
• Test 2b: Static Rollover Risk assumed that 80.0 and 72.0 per cent of the funding
in the 1-30- and 31-90-day buckets would be rolled over, with no possibility to
close the funding gap from other buckets. However, 5.0 per cent of the total
deposits would still be available from the CBN and the intra-group; and
• Test 2c: Dynamic Rollover Risk made the same assumption as in 2b, but with the
option of closing the liquidity gap from other buckets.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Credit Risk Management System (CRMS)
The CBN continued to ensure that banks fully
complied with the redesigned Credit Risk
Management System (CRMS) 13 to strengthen
credit administration in Nigeria. At end-June 2021,
the total number of credit facilities on the CRMS
was 22,802,647.00, representing a 13.3 per cent
decline over the end-June 2020 position of
25,913,202.
The
number
comprised
22,174,082.00 individuals and 628,565.00 nonindividuals.
Table 32: Record on Credit Risk Management System
Description
Jun-20
Jun-21
* Total No. of
Credit/facilities reported
on the CRMS:
25,913,202
22,802,647
Individuals
25,102,910
22,174,082
Non-Individuals
810,292
628,565
Source: Central Bank of Nigeria
Note: The figures include borrower(s) with multiple loans and/or
credit lines

Private Credit Bureaux
The number of private licensed credit bureaux
(PCBs) at end-June 2021 remained at three. The
industry
continued
to
record
remarkable
momentum through increased awareness and
support from stakeholders. At end-June 2021, the
average number of uniquely identified credit
records in PCBs database was 47.59 million,
representing 12.2 per cent increase over the 42.40
million at end-December 2020. The development
was attributed, mainly, to the wider coverage of
the credit reporting system, which included all
credit providers (who were hitherto not captured
by the credit reporting system) as required by the
provisions of the Credit Reporting Act, 2017.


13 The CRMS is a regulatory tool designed to capture
credit records and mitigate credit risk in the banking
system
e. Compliance Developments and Consumer
Protection
Financial Sector Surveillance
The Bank sustained its supervisory activities in the
first half of 2021, to promote public confidence in
the Nigerian banking system. The Bank maintained
the risk-based supervision (RBS) approach as the
pivot of its supervisory framework. Activities of the
Bank in this regard included a regular off-site
appraisal of banks’ and OFIs periodic returns and
on-site assessments (routine monitoring and
special investigations), among others. The Bank
relied on the provisions of the CBN Act (2007),
Banks and Other Financial Institutions Act (BOFIA)
(2020, as amended), and other policy guidelines in
performing these functions.
Banks’ Compliance with the Code of Corporate
Governance
To ensure compliance with the CBN Code of
Corporate Governance for Banks and Discount
Houses and Guidelines for Whistle Blowing in the
Nigerian Banking Industry, the Bank continued its
oversight of the corporate governance regime in
Nigerian banks in the review period. Scorecard
assessments were conducted on eight banks to
ascertain their level of compliance with the CBN
Code of Corporate Governance for Banks and
Discount Houses, and reports were issued in June
2021. The objectives of the exercise were to
monitor, assess and ensure that sound corporate
governance practices were entrenched in the
banking industry.
The result of the assessment revealed that, five
banks were rated ‘Acceptable’, two were rated
‘Needs Improvement’; and 1 was rated ‘Weak’. It
was also observed that all banks made adequate
efforts to implement the recommendations from
the scorecard assessments before the financial
year. The CBN also issued Notices of Regulatory
Breach to defaulting banks for failure or late

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
rendition of statutory returns as specified in the
Code.
Financial
Crimes
Surveillance/Anti-
Money
Laundering/Combating the Financing of Terrorism
(AML/CFT)
The Bank strengthened its collaboration and
cooperation with both domestic and international
stakeholders,
in
compliance
with
FATF
Recommendations 2 and 40, dealing with National
cooperation and coordination and other forms of
international
cooperation,
respectively,
to
effectively address the security challenges in the
country, especially the growing acts of terrorism.
In this regard, the Bank continually directed
financial institutions to increase surveillance and
report all transactions involving designated
individuals or terrorist organisations as global
terrorists under the United Nations Security
Council Resolutions.

During the review period, the Bank intensified
collaboration with domestic and international
stakeholders, namely; Inter-Governmental Action
Group against Money Laundering in West Africa
(GIABA); Financial Action Task Force (FATF);
Association of Chief Compliance Officers of Banks
in Nigeria (ACCOBIN); and Regulators in the
Financial Sector and Law Enforcement Agencies,
including the Nigeria Financial Intelligence Unit
(NFIU). The interaction provided plaforms for
sharing information, ideas, and experiences with
stakeholders.

Further to the CBN directive on the status and
reporting line of Chief Compliance Officers, banks
were given a dispensation to operate a cluster
structure in recognition of the challenges of
having a dedicated compliance officer at each
branch.
Consequently,
spot
checks
were
conducted at various branches to ensure that
banks were implementing the approved CBN
cluster structures. Banks were, after that, advised
to correct the observed exceptions.

14 Deutsche Gesellschaft Fur Internationale Zusammenarbeit
Consumer Protection
To sustain confidence in the financial system, the
Bank continued with the implementation of
measures to protect the rights and privileges of
consumers of financial services. In the first half of
2021, the Bank received 1,973 complaints from
consumers of financial services, compared with
2,051 complaints in the first half of 2020,
representing a decrease of 3.8 per cent. These
complaints comprised fraud, 634 (32.1 per cent);
electronic/cards, 633 (32.0 per cent); and excess
charges, 195 (9.9 per cent). Other complaints
included, mainly, issues of Account Management
and ‘Others.’

A total of 2,169 complaints, including those
outstanding from 2020, were resolved and closed,
compared with 1,519 in the first half of 2020. Total
claims in local currency and foreign currencies
amounted to N16.57 billion and US$102,553.17,
respectively, compared with N4.58 billion and
US$151,647.82, respectively, in the first half of
2020. The sum of N8.43 billion and US$53,805.62
was refunded, compared with N2.67 billion and
US$144,176.68 in the first half of 2020.

Financial Literacy
In the review period, the Bank, in collaboration
with the German Agency for International
Development (GIZ)14 and Shared Agent Network
Expansion Facilities (SANEF), continued with the
implementation process of the Financial Literacy
e-learning Portal. The Project is aimed at
deploying a digital national e-Learning platform to
provide a knowledge base, to support financial
education trainers and facilitators to grow
financial literacy in Nigeria. The CBN, in
collaboration with its partners, would develop a
communication and awareness implementation
plan for the onboard initiative to launch the
SabiMONI Financial Literacy e-Learning Portal.
The 2021 Global Money Week (GMW) was
celebrated globally from March 22 to 28, 2021,
with the theme “Take Care of Yourself, Take Care of

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Your Money”. The Bank advised and engaged
various stakeholders who had roles to promote
financial literacy among children and youths.

Nigeria Sustainable Banking Principles (NSBP)
The CBN continued to monitor the implementation
of the Nigeria Sustainable Banking Principles
(NSBP) at the individual bank and industry levels,
to resolve implementation challenges through the
provision of appropriate interventions.
The CBN received semi-annual reports from banks
at end-December 2020, in line with the reporting
template issued to the industry. The reports were
reviewed
to
assess
reporting
banks’
implementation progress of the NSBP, including
the adequacy of the Environmental & Social risk
(E&S) policies and other areas that required
improvement. In that regard, banks perceived to
be sluggish with the prescribed requirements
were advised to address gaps in their respective
environmental and social policies and procedures.
They were also to improve capacity building for
their employees. In general, based on the reports
rendered by the banks, the industry recorded
considerable progress in the implementation of
the Principles in the first half of the year.
The Asset Management Corporation of Nigeria
The annual target examination of the Asset
Management Corporation of Nigeria (AMCON)
was conducted virtually on 31 May 2021. The
scope of the examination was limited to the
review of the Collateral Register of AMCON’s
Eligible Bank Asset (EBA) portfolio, recoveries
made on EBAs, asset disposal processes, and the
assessment of the financial position of the
Corporation, as at 31 May 2021. A notable
observation made by the Examination Team was
the Corporation’s achievement in meeting its
recovery budget at the date of the examination
through an aggressive assets’ sale drive and
enforcement on EBAs. As at end-May 2021, the
Corporation had recovered N59.15 billion,
compared with the budget of N35.62 billion, and
annual target of N111.01 billion. This represented
166.1 per cent of the semi-annual budget and 53.3
per cent of the annual budget.
The Corporation had so far recovered a total of
N894.466.00 billion, made up of cash recovery of
N474.074 billion, asset and shares forfeiture of
N420.392 billion.
The net carrying value of AMCON’s liabilities stood
at N5.81 trillion at end-June, 2021. The AMCON
Notes had an outstanding balance of N3.97 trillion
and the loan (debenture) of N500.00 billion,
accounting for 76.9 per cent of the liabilities. The
Notes are due to mature on December 27, 2023,
and the N500.0 billion loan falls due for
redemption on 30 December 2022. Feasible
alternatives to avert the crystallisation of these
obligations were being considered by AMCON.
The carrying value of the Corporation’s assets, net
of impairment, was N986.1 billion at the end-June
2021, representing 17.0 per cent of the liabilities.
The operations of the Banking Sector Resolution
Cost Fund (BSRCF) were suspended at the
beginning of 2021, due to the expiration of its tenyear tenor at end-December 2020, as stipulated in
Section 61 (b) of the AMCON Amendment Act
2015. However, the referenced section, 61(B)
provides for an extension of the tenor by a
maximum of five years by the National Assembly.
Consequently, a Bill for a third amendment of the
AMCON Act 2010 to extend the tenor of the BSRCF
by five years was pending at the National
Assembly as of June 30, 2021. The BSRCF,
therefore, had a zero balance at the end-June
2021.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
3.5 PAYMENTS SYSTEM MANAGEMENT
The Bank continued to strengthen the payments
system infrastructure to aid financial transactions
and support economic activities. During the review
period, new payments system initiatives were
introduced
to
maximise
the
opportunities
presented by the COVID-19 pandemic and support
monetary
policy
transmission
mechanisms
through the banking system.

3.5.1 Payments system policies
The CBN continued to play the roles of overseer,
operator, and catalyst through its policies and
initiatives. As an overseer, it guided and regulated
the payments ecosystem by formulating and
implementing new policies and standards to
enhance safety and guarantee stability of the
payments system. As an operator, the Bank
provided critical payments infrastructure; and, as
a catalyst, facilitated interoperability of the system
to ensure seamless payments and settlement of
financial.
a. Payments System Infrastructure
To enhance the resilience of payments system
infrastructure and expand electronic payments
options,
the
CBN
monitored
operators’
compliance with the regulation on chargeback
period for ATMs, PoS, and internet (web)
transactions and the guidelines for the operations
of electronic payment channels. This aims at
promoting
the
integrity
of
payments
infrastructure.
Increased onboarding of bank customers into the
BVN platform was sustained during the review
period. At end-June 2021, the number of bank
customers with registered BVN increased by 6.4
per cent to 48.71 million, compared with 45.8
million at end-December 2020. A total of 106.0
million bank accounts were linked with BVN at
end-June 2021. Furthermore, watch listed BVN
was 12,425 during the review period. The
increased number of bank customers with
registered BVN was attributed to a surge in
customers enrolment following the March 31,
2021, announced deadline.

b. Promoting interoperability
The Bank issued the framework for Quick Response
(QR) Code Payments in Nigeria to promote the
increased adoption of electronic payments and
foster innovation in the payments system. The
framework
provides
regulatory
guidance,
stipulates acceptable QR Code standards, roles
and responsibilities of participants, and risk
management principles. The code is used to
present,
capture
and
transmit
payments
information across payments infrastructure. The
technology enables the mobile channel to
facilitate payments. It is a well-rounded apparatus
to bolster electronic payments for micro, small
and medium enterprises (MSMEs).
c. Guiding and regulating
During the review period, the Bank issued the
regulatory frameworks for Sandbox Operations
and Open Banking, conducted an assessment of
Payment Service Providers (PSPs) and continued
implementing the Nigeria Cheque Standards (NCS)
and Nigeria Cheque Printers Accreditation Scheme
(NICPAS).
i.
Assessment of Payment Service Providers
A new license categorisation regime was
introduced in the review period, streamlining
payments
system
licensing
to
permissible
activities in four broad categories: Switching and

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Processing, Mobile Money Operations (MMOs)15,
Payment Solution Services (PSSs), and Regulatory
Sandbox. In the new license categorisation regime,
transaction switching companies, third-party
processors, and non-bank acquirers operated as
‘Switching and Processing Companies.’ The
routine compliance assessment of 20 PSPs, and
license renewal assessment of 17 PSPs were
conducted during the review period. As such, the
number of participants with operating licenses in
the different segments of the payments system
increased to 99 at end-June 2021, from 97 at the
end-December 2020.

Table 33: Licensed Payments System Participants
License -Type
Number
Jun-

Dec.

Jun-

Card Schemes

Mobile Money Operators**

Payment Solution Service
Providers

Payment Terminal Service
Providers

Transaction Switching
Companies

Third Party Processors

Non-Bank Acquirers

Super Agents

Accredited Cheque Printers

Total

Source: Central Bank of Nigeria
Note: **The Bank had stopped the licensing of banks to undertake
the Mobile Money Business; they only require a No-Objection from
the Central Bank. Hence, the data shown is for Non-Bank Licensed
Mobile Money Operators.

i.
Framework for Regulatory Sandbox
Operations
Regulatory Sandbox enables firms to conduct live
tests of new, innovative products, services,
delivery channels, or business models in a
controlled and regulated environment, with
regulatory oversight, subject to appropriate

15 Only MMOs are permitted to hold customer funds
conditions and safeguards. The framework defines
the establishment, rules, and operations of a
Regulatory Sandbox for the Nigerian payments
system
to
promote
effective
competition,
embrace new technology, encourage financial
inclusion and improve customer experience, to
engender public confidence in the financial
system.

ii.
Regulatory Framework for Open
Banking
To drive innovation, broaden the range of financial
products and services, as well as deepen financial
inclusion, the CBN issued Regulatory Framework
for Open Banking. The framework outlines
principles for data sharing across the banking and
payments ecosystem by stipulating data and
Application Programming Interface (API) access
requirements, principles of API, technical design,
and information security specifications.
iii.
Implementation of the Nigeria Cheque
Standards
and
Nigeria
Cheque
Printers Accreditation Scheme Version
2.0
Following
the
successful
completion
of
accreditation exercises for five Cheque Printers
(CPs) in the review period, four existing licenses
were renewed, and a new license was issued. In
compliance with the stipulations of the Nigeria
Cheque Standards (NCS) and Nigeria Cheque
Printers Accreditation Scheme (NICPAS) Version
2.0 for
the
accreditation
of
all
Cheque
Management Centres of banks, the Bank
accredited seven Cheque Management Centres
(CMCs) to carry out personalisation of cheques.
The Bank also approved the automation of the
accreditation process for Cheque Printers and
Personalisers in line with the NCS/NICPAS 2.0

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
cheque
standards.
The
automation
would
enhance greater operational productivity and
effectiveness; reduce turnaround time for
processing requests/applications; and realign the
steps to optimise the flow of information between
processing officers and applicants.
Furthermore, the extension granted for the
parallel run of the old and new cheques, due to the
COVID-19 Pandemic, ended on 31 March 2021.
Consequently, full enforcement of the NCS and
NICPAS Version 2.0 commenced on April 1, 2021,
using only the new cheques in the clearing system.
The key features of the new cheque included a QR
Code for faster verification of cheque details,
expiry date of printed cheque booklet, and clear
zone at the back of the cheque. This has also
supported the revised standards on Nigeria
Uniform Bank Account Number (NUBAN) for banks
and other financial institutions (OFIs) for the
efficient operation of electronic funds transfer and
cheque clearing operations by deposit money
banks (DMBs) and OFIs.
3.5.2 Trends in the Payments system
Transactions in the payments system during the
first half of 2021 decreased, compared with the
corresponding period of 2020. The volume of epayments declined by 4.9 per cent, to 3,931.5
million, from 4,135.8 million in the corresponding
period of 2020, and the value also declined by 15.6
per
cent,
to
₦472,980.48
billion,
from
₦560,459.11 billion, in the first half of 2020. This
was attributed to the ease of lockdown that
permitted bank customers to physically visit their
bank branches for some financial services.
However, there was a significant increase in the
volume
of
transactions
at
the
financial
touchpoints of the Mobile Money Operators
(MMOs) by 31.3 per cent, to 433.0 million, from
329.8 million, in the first half of 2020, and
marginally grew in value by 1.3 per cent, to
5,225.30 billion, from 5,157.00 billion in the
corresponding period of 2020.

Similarly, the number of ATMs and PoS terminals
increased by 56.0 per cent and 39.1 per cent, to
29,337 and 638,983, from 18,810 and 459,285,
respectively, in the corresponding period of 2020.
The leap in the number of ATMs was attributed to
improvement in reporting activities occasioned by
the introduction of unique identifiers for ATMs.
The number of participating merchants in PoS
operations rose by 12.0 per cent, to 125,856 in the
first half of 2021, from 112,334 in the
corresponding period of 2020.

a. Retail Payments System
Transactions in retail e-payments decreased in
volume and value in the first half of 2021, due to
the easing of lockdown measures. The number of
transactions on e-payment channels decreased by
4.9 per cent, to 3,930.9 million, from 4,135.4
million in the first half of 2020. Similarly, the
corresponding value of the transactions declined
significantly, by 43.9 per cent, to ₦182,796.8
billion,
from
₦325,727.2
billion
in
the
corresponding period of 2020.
A breakdown of the volume of retail transactions
showed that ATM, internet, NEFT and direct debit
transactions decreased by 31.0 per cent, 33.6 per
cent, 78.7 per cent, and 75.0 per cent to 640.5
million, 1,628.7 million, 20.8 million, and 0.3
million, respectively, from their levels in the
corresponding
period
of
2020.
However,
transactions on PoS, USSD, and Mobile App
increased by 283.6 per cent, 22.2 per cent, and
87.3 per cent, to 1,067.6 million, 248.0 million,
and 325.0 million transactions, respectively,
compared with the first half of 2020.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Source: Central Bank of Nigeria
Note: Internet/Web includes NIP, e-Bills Pay and Central Pay, while m-Cash is USSD transaction.
1/ Figures were revised

Similarly, the value of retail transactions
decreased by 8.2 per cent, 22.8 per cent, 91.7 per
cent and 99.4 per cent, to ₦7,897.50 billion,
₦132,163.60 billion, ₦10,568.00 billion, and
₦8.40 billion, in the first half of 2021 for ATMs,
internet, NEFT and direct debit, respectively,
compared with their levels in the corresponding
period of 2020. However, the value of transactions
on PoS, USSD and Mobile App recorded, increases
by 371.7 per cent, 18.7 per cent and 49.7 per cent,
to ₦9,448.40 billion, ₦2,457.30 billion and
₦20,253.60 billion, respectively, in the first half of
2021, compared with their levels in the first half of
2020. The upward trajectory in the volume and
value of transactions on PoS, USSD, and Mobile
App reflected increased confidence in the usage of
the channels, with a beneficial knock-on effect on
financial inclusion.


Analysis of the components of the e-payments
channels shows that the share of internet (web)
channel dominated all other channels, accounting
for 41.4 per cent and 72.3 per cent of the volume
and
value,
respectively.
The
number
of
transactions on ATMs, PoS, NEFT, USSD, and
Mobile App payment channels, accounted for 16.3
per cent, 27.2 per cent, 0.5 per cent, 6.3 per cent,
and 8.3 per cent, respectively. In value terms, it
accounted for 4.3 per cent, 5.2 per cent, 5.8 per
cent, 1.3 per cent and 11.1 per cent, respectively,
in the review period.


Payment
Channels
Number of Terminals
Volume of Transactions (Million)
Value of Transactions ₦’ Triillion
Jun-20
Jun-21
Jun-20 1/
Dec-21
Jun-20
Jun-20 1/
Dec-20
Jun-21
ATMs

POS

Internet (Web)

RTGS

NEFT

USSD

Mobile App

Direct Debit

Total
e-Payment

Cheque

MMOs

Table 34: Volume and Value of Electronic Payments

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Figure 50: Composition of e-Payments Transactions by
Volume, First Half 2021 (per cent)

Source: Central Bank of Nigeria

Figure 51: Share of e-Payments Transactions by Value, First
Half 2021 (per cent)
Source: Central Bank of Nigeria

Cheque Transactions
Cheque transactions decreased in volume and
value in the review period, attributed to a general
shift in preference towards electronic payment
channels. The volume decreased by 33.2 per cent,
to 6.3 million from 9.5 million in the corresponding
period of 2020, and the value decreased by 34.7
per cent, to N4,817.58 billion, from N7,373.55
billion in the corresponding period of 2020.

3.5.2.2 Wholesale Payments System
Transactions in the wholesale payments (Real
Time Gross Settlement (RTGS)) system increased
the volume and value of activities in the first half
of 2021. The volume of inter-bank fund transfers
through the CBN RTGS System increased by 50.0
per cent, to 0.6 million, compared with 0.4 million,
in the first half of 2020. Similarly, the value of
transactions increased by 23.6 per cent, to
N290,183.68 billion, compared with N234,731.91
billion in the corresponding period of 2020. The
increase in volume and value of transactions was
attributed to the rise in the number of big-ticket
inter-bank transactions on the RTGS, following the
uptick in economic activities, as recovery
continued from the impact of the COVID-19
pandemic during the corresponding period of
2020.

Figure 52: Volume of Inter-bank RTGS Transactions

Source: Central Bank of Nigeria

Figure 53: Value of Inter-bank RTGS Transactions (N Billion)
Source: Central Bank of Nigeria


ATM
16.3%
PoS
27.2%
Internet
41.4%
Mobile
8.3%
NEFT
0.5%
USSD

First Half 2020
Second Half 2020
First Half 2021
ATM
4.3%
PoS
5.2%
Mobile
11.1%
Internet
72.3%
NEFT
5.8%
USSD

First Half 2020
Second Half 2020
First Half 2021
N'billion

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
3.6 EXTERNAL SECTOR DEVELOPMENTS
The external account weakened further, in the first
half of 2021, with an overall balance of payments
deficit of 1.8 per cent of GDP, relative to 1.1 per
cent in the first half of 2020. This was occasioned
by rising external debt and foreign exchange
market pressure. However, the improvement in
international crude oil prices, which resulted in
higher export earnings, and the moderation in the
demand for import of goods and services,
narrowed the current account deficit to 1.3 per
cent of GDP during the review period. The financial
account recorded net incurrence of financial
liability, as competitive yields in the domestic
financial market improved capital inflow in the first
half of 2021.

External reserves position at end-June 2021 stood
at US$32.99 billion and could finance 8.3 months
of import (goods only) or 5.9 months of import
(goods and services), above the international
benchmark of 3.0 months. Continued excess
demand pressure in the foreign exchange market,
owing largely to supply shortages, led to the
depreciation of the naira.
At US$33.47 billion or 8.5 per cent of GDP at endJune 2021, public sector external debt remained
within the threshold of 40.0 per cent of GDP. This
was supported by the robust external debt
management policies of the country.

i.
Current and Capital Account
Developments
Improvement in trade and higher inflow of
transfers narrowed the deficit in the current
account during the first half of 2021. The current
account deficit, at US$2.52 billion (1.3 per cent of
GDP) narrowed significantly by 68.2 per cent,
compared with US$8.09 billion in the first half of
2020. The development was driven by increased
export earnings, lower import bills and higher
remittances inflow.
Figure 54: Current and Capital Account Balance (US$ 'Billion)

Source: Central Bank of Nigeria

Trade
At US$3.59 billion (1.8 per cent of GDP), the trade
deficit in the goods account declined significantly
by 29.7 per cent, relative to US$5.11 billion in the
first half of 2020.

Export Performance
Sequel to the rebound in global demand and
improved commodity prices, export receipts
increased in the first half of 2021. Export earnings
grew to US$20.52 billion (10.3 per cent of GDP),
compared with US$19.55 billion in the first half of
2020. The increase in export earnings was due
largely, to rising global demand as business
activities picked, following the relaxation of
COVID-19 related restrictions in some counties.
Crude oil export, at US$14.99 billion (7.6 per cent
of GDP) in the first half of 2021, increased by 8.8
per cent, compared with US$13.79 billion in the
first half of 2020. Gas export receipts grew to
US$2.71 billion, from US$2.56 billion in the first
half of 2020, indicating an increase of 5.9 per cent.
The development was due to the increase in
propane LPG export. In terms of share, crude oil
and
gas
component
remained
dominant,
contributing 87.1 per cent to total export, with
-10
-5

First Half

Second
Half 2020
First Half

-8.09
-8.89
-2.52

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
crude oil accounting for 73.8 per cent and gas,
13.3 per cent.
Non-oil export receipts, at US$2.62 billion (12.9
per cent of total export), fell below the US$3.20
billion recorded in the first half of 2020, reflecting
the lingering effect of the supply chain disruption
caused by the COVID-19 pandemic. A breakdown
of non-oil export revealed that agricultural, other
products, semi-manufactured, manufactured, and
mineral products accounted for 59.2 per cent,
15.6 per cent, 13.1 per cent, 8.5 per cent and 3.7
per cent of total non-oil export, respectively.
Cashew nuts, cocoa beans, and sesame seeds
were the main non-oil export commodities, while
the major export destinations included Vietnam,
China, The Netherlands, Japan, Belgium, and
Malaysia.
Export to ECOWAS Sub-Region
Despite the partial reopening of the Nigerian
borders, domestic export to the ECOWAS subregion was hampered by the adverse effects of the
COVID-19 pandemic. Nigeria's non-oil export to
the ECOWAS sub-region dropped to US$104.61
million in the first half of 2021, from US$111.86
million in the first half of 2020, reflecting the
persistent effects of the COVID-19 pandemic on
trade within the sub-region. A breakdown showed
that Nigeria’s export to Ghana, at US$34.27
million, constituted 32.8 per cent of the total,
followed by Niger with US$25.59 million (24.5 per
cent); Togo, US$20.08 million (19.2 per cent); and
Côte d'Ivoire, US$11.16 million (10.7 per cent).
Export to the Republic of Benin was US$4.02
million (3.8 per cent); Guinea, US$2.36 million (2.3
per cent); and Senegal, US$2.18 million (2.1 per
cent). Other countries accounted for the balance
of 4.6 per cent of total export. The dominant
export commodities were instant noodles,
detergents, tobacco, plastics, dairy products,
soybean meal, and carbonated soft drinks.
Figure 55: Export to ECOWAS Sub-Regions (per cent)

Source: Central Bank of Nigeria

Foreign Exchange Earnings by Top 100 Non-oil
Exporters
Receipts by the top 100 non-oil exporters increased
due to improved global economic activities and
higher commodity prices. At US$1,338.75 million,
receipts from the top 100 non-oil exporters,
increased by 43.1 per cent, compared with
US$935.83 million in the first half of 2020, and
accounted for 51.2 per cent of total non-oil export
receipts. Analysis showed that Olam Nigeria
Limited topped the list with US$141.29 million or
10.6 per cent of the total, from the export of cocoa
beans to Malaysia. Starlink Global and Ideal
Limited was second, with earnings of US$135.03
million (10.1 per cent) from the export of cocoa
beans, cashew nuts, and sesame seeds to Turkey
and China. Indorama Eleme Fertilizer and
Chemicals Limited followed with US$81.89 million
(6.1 per cent) from the export of urea, fertilizers,
and agronomy services to Turkey and China.
Benin
3.8%
Côte d’Ivoire
10.7%
Ghana
32.8%
Guinea
2.3%
Niger
24.5%
Senegal
2.1%
Togo
19.2%
"Other"
ECOWAS
Countries
4.6%

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Olatunde International Limited was fourth, with
the export of cocoa beans to Belgium valued at
US$54.02 million (4.4 per cent). British-American
Tobacco Nigeria Limited ranked fifth, with
earnings of US$48.83 million (3.6 per cent), from
cigarettes export to Ghana, Cameroon, and Cote
d'Ivoire. In the sixth position was WACOT Limited,
with export earnings of US$48.59 million (3.5 per
cent) from the export of cotton products to The
Netherlands and the United States.
CHI Limited, RISU Nigeria Limited, African Steel
Mills Nigeria Limited, and Rijay Agro Limited
ranked 96th, 97th, 98th, and 99th positions, with
export earnings of US$1.92 million, US$1.89
million, US$1.80 million, and US$1.79 million,
respectively. They exported fruit juice and dairy
products, dried hibiscus flower, steel, and
agricultural products to West Africa, the United
States, Brazil, Spain and The Netherlands,
respectively. Famousa Agro Limited was 100th,
with US$1.78 million, from the export of
agricultural products to West African countries.
Non-Oil Receipts through Banks
Proceeds of non-oil export through the banks was
US$2.16 billion in the review period, representing
82.4 per cent of total non-oil export receipts. A
breakdown of the proceeds showed that industrial
products export accounted for 57.4 per cent of
total receipts, followed by agricultural products
with a share of 22.9 per cent of the total. Proceeds
from manufactured products accounted for 15.8
per cent; mineral products, 2.0 per cent; and food
products, 1.4 per cent.


Figure 56: Non-Oil Export Receipts by Banks (per cent)

Source: Central Bank of Nigeria

Merchandise Import
Merchandise import moderated in the first half of
2021, reflecting the permeating effects of the
pandemic on some sectors of the economy.
Aggregate merchandise import declined to
US$23.92 billion (12.1 per cent of GDP), compared
with US$24.66 billion in the first half of 2020,
indicating a decline of 3.0 per cent. Analysis
showed that importation of non-oil products
decreased to US$17.85 billion (9.1 per cent of
GDP), compared with US$20.75 billion in the first
half of 2020. However, petroleum products import
grew significantly by 55.3 per cent to US$6.06
billion (3.1 per cent of GDP), compared with the
level in the first half of 2020. The development
resulted from higher importation of premium
motor spirit and automotive gas oil, following the
gradual return to normalcy after the COVID-19
lockdown restrictions.
In terms of composition, non-oil import continued
to dominate merchandise import with a share of
74.6 per cent of total import, while oil accounted
for 25.4 per cent of the total.
A breakdown of merchandise imports by broad
economic categories indicated that the industrial
sector accounted for the largest share of 50.6 per

F i r s t H a l f 2 0 2 0 S e c o n d H a l f 2 0 2 0 F i r s t H a l f 2 0 2 1
Industrial
Food
Manufactured
Agricultural
"Others"

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
cent, followed by food and beverages, with 14.5
per cent. Fuel and lubricants was 14.2 per cent;
transport equipment and parts, 10.2 per cent;
consumer goods, 9.2 per cent; and others, 0.8 per
cent.
Figure 57: Export, Import and Trade Balance (US$ Billion)

Source: Central Bank of Nigeria

Services
Despite the restart of businesses across the world,
the demand for services remained subdued, and
below the pre-pandemic level. Thus, the deficit in
the services account narrowed by 27.4 per cent to
US$7.61 billion (3.9 per cent of GDP), compared
with US$10.48 billion in the first half of 2020.
A breakdown shows that, payments for import
services reduced by 22.1 per cent to US$9.68
billion in the review period, relative to the
US$12.42 billion in the first half of 2020. Analysis
of payments for services revealed that expenses
on travels declined by 17.1 per cent to US$3.05
billion in the first half of 2021, representing 31.5
per cent of total payments, compared with
US$3.67 billion in the first half of 2020. The
development was due to the lower spending on
education and health-related travels, which fell by
10.2 per cent and 22.8 per cent, respectively, on
account of emerging restrictions in some
economies, amid rising cases of COVID-19
infections. Payment for other business services,
which accounted for 21.1 per cent of the total,
also declined significantly by 59.3 per cent to
US$2.05 billion in the first half of 2021, relative to
US$5.03 billion in the first half of 2020. The
development was attributed to lower payment for
professional
and
management
consulting,
technical, trade-related, and other services.
Payments for transport services also declined by
22.0 per cent to US$2.18 billion, relative to
US$2.79 billion in the first half of 2020, due to
reduced payment for passenger fares and freight
charges (on account of subdued merchandise
import). Similarly, payment for computer and
information services declined by 19.9 per cent to
US$0.11 billion, compared with US$0.14 billion in
the first half of 2020.
In contrast, payments for insurance services
increased
significantly
to
US$1.87
billion,
compared with US$0.39 billion in the first half of
2020. Out-payment for government services
increased by 3.2 per cent to US$0.13 billion,
relative to US$0.12 billion in the first half of 2020.
Payment in respect of financial services also
increased by 11.1 per cent to US$0.14 billion,
relative to US$0.12 billion in the corresponding
period of 2020.
Figure 58: Share of Services Out-Payments (per cent)

Source: Central Bank of Nigeria
Receipts from services export increased by 6.6 per
cent to US$2.07 billion, compared with US$1.94
billion in the first half of 2020. Of the total receipts,
59.2 per cent was in respect of transportation,

First Half 2020
Second Half 2020
First Half 2021
Export
Import
Trade Balance
Transportati
on
22.5%
Insurance
Services
19.3%
Government
Services
1.3%
Financial
Services
1.5%
Travel
31.5%
Other
Busines
Services
21.1%
Other
Categories
2.8%

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
which grew by 20.3 per cent to US$1.23 billion
during the review period, compared with US$1.02
billion in the first half of 2020. The increase was
due to higher receipts from freight services
(mainly
sea
transportation)
and
other
transportation services. Similarly, receipts from
government services rose by 1.4 per cent, to
US$0.23 billion (11.2 per cent), relative to US$0.22
billion in the first half of 2020.
On the other hand, receipts from travels
decreased by 10.1 per cent to US$0.16 billion (7.5
per cent), from the US$0.17 billion in the first half
of 2020, due to lower inflow from other personal
travels (tourism related). Receipts from insurance,
mainly non-life, fell to US$0.16 billion or 7.6 per
cent of the total, from US$0.18 billion in the first
half of 2020. Financial services receipts also
declined by 6.4 per cent to US$0.21 billion (10.3
per cent), from US$0.23 billion in the first half of
2020.
Figure 59: Share of Services Receipts (per cent)

Source: Central Bank of Nigeria

Primary Income
Outward repatriation of income by foreign
investors, as most companies declared dividends,
resulted in a higher deficit in the primary income
account. The deficit in the primary income
account, at US$3.74 billion, widened by 23.3 per
cent, relative to US$3.04 billion in the first half of
2020. Investment income, comprising dividends
and profits, increased by 23.7 per cent, compared
with the first half of 2020. The compensation of
employees sub-account recorded a higher surplus
position of US$0.10 billion, compared with
US$0.07 billion in the same period in 2020.

Secondary Income
The rebound in global economic activities
positively impacted remittances inflow, which
improved the surplus in the secondary income
account. The secondary income account recorded
a higher surplus of US$12.42 billion or 6.3 per cent
of GDP in the review period, compared with
US$10.54 billion in the first half of 2020.
Remittances by Nigerian migrant workers abroad,
which constituted 72.2 per cent of total inflow,
rose to US$9.22 billion, compared with US$9.02
billion in the first half of 2020. This was on the back
of the Bank’s policies on enhancing remittances
inflow, particularly the “Naira 4 Dollar” Scheme.
General government transfers also increased
significantly to US$4.45 billion in the first half of
2021, compared with US$1.76 billion in the first
half of 2020. The increase reflected a higher inflow
of grants from foreign partners and international
organisations to cushion the effect of COVID-19
and insecurity challenges in the country.
Figure 60: Private Home Remittances (US$’ Billion)

Source: Central Bank of Nigeria


Transportation
59.2%
Insurance
7.6%
Government
11.2%
Financial
10.3%
Travel
7.5%
Others

F IR ST HA LF

SE C O N D HA LF

F IR ST HA LF

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
ii.
Financial Account Developments
A net borrowing position was recorded in the
review period, mainly because of higher incurrence
of liabilities, driven by renewed investors’
confidence and competitive yields, coupled with
the need to bridge the infrastructural gap to spur
economic
recovery.
The
financial
account
recorded net incurrence of liabilities of US$3.94
billion or 2.0 per cent of GDP, compared with
US$4.63 billion in the first of 2020. This was due,
largely, to improvement in foreign capital inflow.
Net Incurrence of Liabilities
The renewed investors’ confidence in the
economy resulted in an increased inflow of foreign
capital in the review period. Aggregate foreign
liabilities improved to US$7.55 billion, in contrast
to a reversal of US$1.62 billion recorded in the first
half of 2020. A breakdown shows that the inflow
of FDI significantly increased in the first half of
2021 to US$2.30 billion, compared with US$1.17
billion in the first half of 2020.
Portfolio investment inflow, comprising equity and
debt securities, improved to US$1.65 billion,
against a reversal of US$4.85 billion in the first half
of 2020. The development was buoyed by the
attractive yields on domestic money market
instruments, as short-term debt securities rose to
US$2.47 billion, vis-a-vis a reversal of US$2.96
billion in the first half of 2020. In addition, the Bank
undertook a currency swap deal with Goldman
Sachs International Bank worth US$2.00 billion.
“Other” investment at US$1.59 billion was lower
than US$2.06 billion in the first half of 2020, on
account of lower drawings of loans by the general
government.


Figure 61: Foreign Capital Inflow (US$ Billion)

Source: Central Bank of Nigeria

Net Acquisition of Asset
Aggregate financial assets worth US$3.61 billion
was acquired against disposal of US$6.26 billion in
the first half of 2020. The development was due
largely to increased foreign currency holdings by
the private sector, trade credits, and inflow
through bilateral currency swaps. Further analysis
shows that the acquisition of direct investment
assets by residents improved to US$0.49 billion, in
contrast to divestment of US$1.14 billion in the
first half of 2020.
Portfolio investment assets amounted to US$0.03
billion, which was lower than the US$0.60 billion
in the first half of 2020 due to the risk averseness
of resident investors. The “other” investment
asset
sub-account
recorded
acquisition
of
US$4.57 billion, as against disposal of US$2.87
billion in the first half of 2020. This was driven
largely, by increased trade credits and holdings of
foreign currency by the private sector.
Reserve assets depleted by US$3.49 billion in the
review period, relative to US$2.31 billion
drawdowns in the first half of 2020, due, majorly,
to the Bank’s intervention in the foreign exchange
market to stabilise the naira and for financing
balance of payments needs.

First Half 2020
Second Half 2020
First Half 2021
FDI
Portfolio
Other Investment
Financial Derivatives

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Capital Importation
Renewed confidence in the domestic financial
market, occasioned by competitive yields on fixedincome securities, improved inflow of foreign
capital into the economy. Aggregate new capital
imported into the economy as reported by banks
amounted to US$2.81 billion, compared with
US$2.53 billion in the second half of 2020. The
growth followed the increased purchase of money
market instruments, driven largely by improved
yields. Disaggregation by sectors shows that
banking accounted for 35.6 per cent of the total,
while investment in shares (FDI and Portfolio
equity) accounted for 32.0 per cent. Financing,
production/manufacturing, agriculture, oil and
gas, trading, and telecommunications constituted
12.3 per cent, 8.9 per cent, 3.4 per cent, 2.4 per
cent apiece and 2.0 per cent, respectively, while
other sectors accounted for the balance.
Classification by type of investment reveals that
portfolio investment continued to dominate,
constituting 54.4 per cent of total investment,
followed by other investments, with 36.9 per cent,
and FDI inflow accounting for the remaining 8.7
per cent.
Analysis by country of origin shows that the United
Kingdom was the dominant source of inflow,
accounting for 47.4 per cent of the total, followed
by the United Arab Emirates and the Republic of
South Africa, with 10.1 per cent and 9.4 per cent,
respectively. Singapore, The Netherlands and the
United States accounted for 8.3 per cent, 5.2 per
cent and 4.2 per cent, respectively, while “other”
countries
accounted
for
the
balance.
By
destination of capital, Lagos state received the
largest share of US$2.39 billion or 85.0 per cent,
while the FCT, Abuja, recorded an inflow of
US$0.41 billion, representing 14.7 per cent of the
total.
Capital Outflow
Capital outflow declined in the first half of 2021
due to lower repatriation of capital and loan
repayment. Aggregate capital outflow amounted
to US$2.75 billion in the first half of 2021,
compared with US$9.76 billion in the first half of
2020. A breakdown shows that capital repatriation
accounted for 56.3 per cent, followed by loans,
with 28.9 per cent. Dividends payment to nonresident investors accounted for 14.1 per cent of
the total, while “other” outflow accounted for the
balance.
Outflow by sector shows that: financing accounted
for 38.6 per cent, banking, 16.3 per cent and
production/manufacturing,
13.8
per
cent.
Telecommunications, trading, and oil and gas
accounted for 12.9 per cent, 6.2 per cent and 5.8
per cent, respectively. “Other” sectors accounted
for the balance.
External Debt
Nigeria's external debt increased, owing to
additional disbursements from multilateral and
bilateral sources. Nigeria's public external debt
increased by 6.3 per cent to US$33.47 billion, from
US$31.48 billion at end-June 2020. The increase
was due to the additional disbursements from
multilateral and bilateral sources. The external
debt-to-GDP ratio of 8.5 per cent at the end-June
2021 was within the sustainable threshold of 40.0
per cent of GDP.
Further analysis shows that loans from multilateral
sources, mainly the World Bank, International
Monetary Fund, and African Development Bank
Groups,
increased
to
US$18.37
billion,
constituting 54.9 per cent of the total, from
US$16.36 billion or 52.0 per cent at end-June
2020. Debt from commercial sources in the forms
of Euro and Diaspora bonds was US$10.67 billion

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
(31.9 per cent), compared with US$11.17 billion
(35.5 per cent), at the end-June 2020. This
indicates a decline of 4.5 per cent, due to the
redemption of Eurobonds in January 2021. Loans
from bilateral sources stood at US$4.25 billion
(12.7 per cent), compared with US$3.95 billion or
12.5 per cent at the end of June 2020, while
promissory notes accounted for the balance.
International Investment Position (IIP)
Increased portfolio accumulation and other
investment liabilities resulted in a higher net
liability
position
in
Nigeria's
International
Investment Position (IIP). A higher net financial
liability of US$64.08 billion was recorded at endJune 2021, compared with US$57.37 billion, at
end-June 2020. The stock of financial assets grew
by 6.8 per cent, to US$105.00 billion at end-June
2021, compared with US$98.29 billion, at endJune 2020. This was, due to increases in the stock
of FDI, portfolio, and other investment assets,
indicating higher claims by Nigerian investors on
the rest of the world.
Further analysis reveals that the stock of FDI
increased by 14.2 per cent, to US$6.84 billion, at
end-June 2021, compared with US$5.99 billion, at
end-June 2020. Other investment assets also rose
to US$61.19 billion, compared with US$54.55
billion at end-June 2020, indicating an increase of
12.2 per cent. In contrast, the stock of reserve
assets fell by 7.8 per cent, to US$32.99 billion,
relative to US$35.78 billion, at end-June 2020.
Portfolio investment also declined, marginally, by
0.3 per cent, to US$1.96 billion, relative to
US$1.97 billion at end-June 2020.
The stock of financial liabilities, representing
foreign investors' claims on the economy,
increased by 8.6 per cent, to US$169.08 billion at
end of June 2021, compared with US$155.67
billion at end-June 2020. The development
reflected an increase in the stock of money market
instruments held by foreign investors, bilateral
currency swaps, and higher loan liabilities of banks
and the general government. Thus, the stock of
portfolio investment increased by 10.5 per cent, to
US$29.48 billion, while that of other investment
liabilities rose by 11.0 per cent, to US$47.88 billion
at end-June 2021. FDI liabilities also increased by
4.6 per cent, to US$89.72 billion at end-June 2021,
compared with US$85.80 billion, at end-June
2020. The stock of financial derivatives stood at
US$2.00 billion at the end-June 2021, due to
bilateral
currency
swap
transactions.
The
increased stock of financial liabilities reflected the
improved domestic investment climate.
International Reserves
Gross external reserves at end-June 2021 stood at
US$32.99 billion, compared with US$35.78 billion
at end-June 2020, indicating a decline of 7.8 per
cent, due largely, to the Bank’s intervention in the
foreign exchange market.
A breakdown of external reserves by ownership
shows that the CBN maintained its dominance,
with a share of 86.2 per cent, followed by the
Federal Government with 13.7 per cent, while the
Federation accounted for the balance of 0.2 per
cent. However, the CBN portion of the reserves
fell, due largely, to the Bank's intervention at the
foreign exchange market. The FGN portion also
declined as a result of third-party and external
debt service payments.
In terms of currency composition, the US dollar, at
US$26.26 billion, constituted 79.6 per cent of the
total, Chinese yuan, US$4.23 billion (12.8 per
cent); special drawing rights, US$2.08 billion (6.3
per cent); while other currencies accounted for
the balance of 1.3 per cent.
An assessment of external reserves adequacy
based on the traditional measures showed that at

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
end-June 2021, external reserves could finance
5.9 months of import of goods and services or 8.3
months of goods only, higher than the 3.0 months
international benchmark. The ratio of external
reserves
to
short-term
liabilities
is
19.7
percentage points above the benchmark of 100.0
per cent short-term debt cover based on the
Greenspan-Guidotti measure of external reserves
adequacy. In terms of external reserves to money
supply (M3), the ratio, at 34.3 per cent, indicates
that the level of reserves was adequately above
the international benchmark of 20.0 per cent.
Figure 62: External Reserves Stock and Reserve Adequacy
Measures

Source: Central Bank of Nigeria

iii.
External Asset Management
Programme and Income from
Reserves Management
The net asset value of fixed income portfolio
managed by the six external asset managers
increased by 1.1 per cent, to US$7.46 billion, at
end-June 2021, compared with US$7.38 billion at
end-June 2020. As at the end of June 2021, the
absolute return from the portfolio amounted to
US$1.1 billion, from inception. The operations of
reserves asset management yielded an aggregate
return of US$0.45 billion in the first half of 2021.
This indicated a shortfall of 62.0 per cent, relative
to the budgeted income for the same period. The
income earned was also lower than earnings in the
first half of 2020 by 87.2 per cent.
Foreign Exchange Flows
Foreign exchange receipts declined owing, largely,
to lower crude oil production, despite the
sustained recovery in crude oil prices at the
international market. Aggregate inflow to the
economy fell by 26.4 per cent, to US$44.27 billion
in the first half of 2021, relative to US$60.13 billion
in the first half of 2020. The development was
driven, largely, by the decline in crude oil-related
receipts. A breakdown shows that inflow through
autonomous sources and the CBN accounted for
68.2 per cent and 31.8 per cent, respectively.
Inflow through autonomous sources declined by
14.4 per cent to US$30.21 billion, from US$35.29
billion in the first half of 2020. A disaggregation
showed that non-oil export receipts by banks
increased by 44.8 per cent, to US$1.97 billion,
compared with the US$1.36 billion in the first half
of 2020. Invisible purchases, on the other hand,
declined to US$28.23 billion, from US$33.92
billion, in the first half of 2020, indicating a decline
of 16.8 per cent. The development was on account
of a reduction in total over-the-counter (OTC)
purchases. Of the total invisible purchases,
ordinary domiciliary accounts increased to
US$10.65 billion, relative to US$9.48 billion in the
first half of 2020, while purchases, at US$17.57
billion, indicated a 28.1 per cent decline, relative
to US$24.43 billion in the same period in 2020. The
decline in OTC purchases was driven by a lower
inflow of other OTC purchases.
Foreign exchange inflow through the CBN declined
by 43.4 per cent, to US$14.06 billion, from
US$24.84 billion in the first half of 2020. The
development was due, majorly, to the 50.5 per
cent decline in crude oil receipts, to US$3.28
billion, compared with the level in the first half of
2020, due to the force majeure on Qua Iboe crude
stream, fire incident in one of the major export
terminals and pipeline vandalism. Similarly, non-

First Half 2020
Second Half 2020
First Half 2021
External Reserves
Months of Import (Goods)
Months of Import (Goods & Services)
Reserve/M3

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
oil receipts decreased by 40.8 per cent to
US$10.78 billion, compared with US$18.22 billion
in the first half of 2020. This was driven, mainly, by
the 55.4 per cent and 52.7 per cent fall in proceeds
from foreign exchange purchases, and Treasury
Single Account (TSA) and Third-Party receipts to
US$1.13 billion and US$1.69 billion, respectively,
in the review period. Further analysis reveals that
interbank swaps and other official receipts
increased by 107.3 per cent and 72.2 per cent to
US$4.52 billion and US$2.40 billion, respectively.
Aggregate foreign exchange outflow from the
economy, at US$19.05 billion, declined by 34.6 per
cent, relative to the level in the first half of 2020.
A breakdown showed that outflow through
autonomous sources fell by 21.1 per cent to
US$1.41 billion, compared with the level in the
first half of 2020, as a result of higher payment for
invisible services.
Similarly, outflow through the CBN decreased by
35.4 per cent to US$17.65 billion, relative to the
level in the first half of 2020, owing, largely, to
lower intervention in the foreign exchange
market. Disaggregation shows that interbank
utilisation, decreased by 37.8 per cent to
US$11.31 billion or 64.1 per cent of the Bank’s
outflow, compared with the first half of 2020,
driven by reduced sales to BDCs, I&E, Secondary
Market
Intervention
Scheme
(SMIS),
and
wholesale forwards transactions. In addition,
drawings on L/Cs and public sector payments
declined by 3.0 per cent and 59.9 per cent to
US$0.35 billion and US$2.04 billion, respectively.
Figure 63: Foreign Exchange Disbursements through the
CBN (per cent)

Source: Central Bank of Nigeria
Overall, foreign exchange flow through the
economy resulted in a lower net inflow, driven by
the increased outflow from the CBN, which
outweighed inflow from autonomous sources. A
net inflow of US$25.22 billion was recorded
through the economy, compared with US$31.02
billion in the first half of 2020. A net inflow of
US$28.81
billion
was
recorded
through
autonomous sources, compared with US$33.51
billion in the first half of 2020. The CBN recorded
a higher net outflow of US$3.59 billion in the first
half of 2021, compared with US$2.48 billion in the
first half of 2020.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Figure 64: Foreign Exchange Flows through the CBN
(US$ Billion)

Source: Central Bank of Nigeria

b. Foreign Exchange Market and
Management
The gradual recovery of domestic economic
activities
from
the
COVID-19
containment
measures resulted in higher demand pressure in
the foreign exchange market. Consequently, the
Bank
implemented
some
policies
and
programmes to support interventions in the
foreign exchange market, boost liquidity, and
ensure exchange rate stability. These policies
focused
majorly
on
enhancing
diaspora
remittances inflow and exchange rate unification.
To promote transparency and encourage diaspora
remittances inflow, the Bank, on 22 January 2021,
issued a circular that permits only licensed IMTOs
to facilitate remittances transfer into Nigeria. In
addition, all diaspora remittances must be paid to
the beneficiaries in foreign currency.
The “Naira 4 Dollar” scheme, an incentive offered
to diaspora remittances recipients, took effect on
8 March 2021. The Scheme, which pays N5 for
every US$1 remitted, was scheduled to end on 8
May 2021, but was extended indefinitely to
consolidate its success.
The Bank also adopted the NAFEX (also called I&E)
rate as the official exchange rate on 24 May 2021,
to further unify the rates at different market
segments. To meet foreign exchange demand, the
Bank, on 7 June 2021, increased foreign exchange
allocations to banks for invisible services (PTA,
BTA, tuition fees, and medical payments), SME
transactions, and repatriation of capital.
i.
Foreign Exchange Sales
CBN sustained its interventions in the foreign
exchange market to further boost liquidity and
ensure stability. However, the total foreign
exchange supplied to authorised dealers by the
Bank declined by 37.8 per cent, below the level in
the first half of 2020.
A breakdown reveals that inter-bank sales
increased to US$0.70 billion, compared with
US$0.38 billion in the first half of 2020. Sales to
BDCs at US$2.77 billion in the review period, was
lower than the US$3.63 billion in the first half of
2020. Foreign exchange sales to SMEs increased
by 31.0 per cent to US$0.75 billion, above the level
in the first half of 2020. However, sales under the
SMIS and to the I&E window declined by 2.6 per
cent and 70.4 per cent to US$3.08 billion and
US$1.84 billion, respectively, compared with the
levels in the first half of 2020.
Figure 65: Supply of Foreign Exchange (US$ Billion)

Source: Central Bank of Nigeria


First Half 2020
Second Half 2020
First Half 2021
Inflow
Outflow
Netflow

US$ Billion

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
ii.
Forwards and Swaps Transactions
In the first half of 2021, wholesale forward sales
declined to US$0.10 billion, compared with
US$2.24 billion in the corresponding half of 2020.
Matured swaps transactions increased to US$2.08
billion, compared with US$1.95 billion in the first
half of 2020.
Exchange Rate Movements
The exchange rate of the naira to the US dollar
depreciated in all segments of the foreign
exchange market due to increased demand and
the adoption of the NAFEX as the official exchange
rate in May 2021.
Spot Exchange Rate
The average exchange rate of the naira to the US
dollar at the inter-bank and BDC segments
depreciated by 13.2 per cent and 17.0 per cent to
N387.50/US$ and ₦481.70/US$, respectively,
relative to the values in the first half of 2020. The
development was due to rising demand pressure,
owing to further easing of travel restrictions
across the globe. Similarly, at the I&E window, the
average exchange rate depreciated by 7.4 per cent
to ₦406.67/US$, relative to the level in the first
half of 2020. This was attributed to the increased
demand by investors and exporters to meet trade
obligations.
Figure 66: Average Exchange Rate Movements (₦/US$)

Source: Central Bank of Nigeria

Consequently, the premium between the average
I&E and the BDC rates widened to 18.5 per cent in
the first half of 2021, compared with 6.3 per cent
in the first half of 2020.
Figure 67: Foreign Exchange (N/US$) Premium (per cent)

Source: Central Bank of Nigeria

The exchange rate of the naira to the US dollar at
the I&E window, closed at N411.50/US$, relative
to N386.50/US$, at end-June 2020. Similarly, at
the BDC segment, the naira depreciated to
N495.00/US$, compared with N455.00/US$ at
end-June 2020.
Cross Rates
The average exchange rate of the naira against the
British pound and the euro depreciated by 21.4
per cent and 20.8 per cent, respectively. The naira
also depreciated by 13.7 per cent against the
Japanese yen, compared with the level in the first
half of 2020. At the regional level, the naira
depreciated against the CFA francs and WAUA by
28.3 per cent and 28.7 per cent, respectively,
relative to their values in the first half of 2020.
Emerging Market Currencies
Currencies of most emerging market countries
firmed against the US dollar as their rates reached
multi-year
highs,
reflecting
ongoing
policy
adjustments by their central banks. The South
African rand, Chinese RMB, and Russian ruble
appreciated by 12.7 per cent, 5.0 per cent, and 0.5
per cent, respectively, against the US dollar. The

First Half 2020
Second Half 2020
First Half 2021
Interbank
BDC
I&E

First Half 2020
Second Half 2020
First Half 2021
Interbank/BDC
BDC/I&E
5% International Benchmark

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
appreciation of the rand indicated a 28-month
high against the US dollar due to soaring
commodity prices.
Table 35: EMEs Exchange Rates/US$
Period
Chinese
RMB
Nigerian
naira
South
African
rand
Russian
ruble
2020H1

2020H2

2021H1

Source: Central Bank of Nigeria

Sectoral Utilisation of Foreign Exchange
Aggregate utilisation of foreign exchange by
sectors decreased, due majorly to moderation in
merchandise imports. Foreign exchange utilised by
major economic sectors declined to US$10.05
billion, relative to US$17.70 billion in the first half
of 2020. Analysis shows that US$5.72 billion or
56.9 per cent of the foreign exchange was utilised
for visible imports. This was 0.7 per cent lower
than US$5.76 billion in the first half of 2020.
Further analysis indicates that, of the visible
imports, utilisation by the industrial sector, at
US$2.27 billion, decreased by 7.8 per cent,
compared with the level in the first half of 2020.
Similarly, utilisation by the oil and transport
sectors declined by 34.8 per cent and 44.5 per
cent, to US$0.50 billion and US$0.16 billion,
compared with their respective levels in the first
half
of
2020.
The
amount
utilised
for
manufactured goods, food products, agricultural
and mineral sectors increased by 23.5 per cent,
21.5 per cent, 42.1 per cent, and 53.2 per cent to
US$1.51 billion, US$1.04 billion, US$0.13 billion,
and US$0.11 billion, respectively, compared with
their levels in the first half of 2020.


Figure 68: Sectoral Utilisation of Foreign Exchange (Visible)

Source: Central Bank of Nigeria
Invisible transactions, at US$4.32 billion or 43.0
per cent of the total, declined by 31.5 per cent,
relative to US$11.94 billion, in the corresponding
period of 2020. A breakdown showed that the
amount utilised for communication, educational
and health related services increased significantly
to US$0.13 billion, US$0.26 billion and US$0.01
billion, respectively, from the levels in the first half
of 2020. The amount utilised for business, and
financial services declined by 26.3 per cent and
68.6 per cent to US$0.18 billion and US$3.57
billion, respectively, relative to their levels in the
first half of 2020.
Figure 69: Sectoral Utilisation of Foreign Exchange
(Invisibles)
Source: Central Bank of Nigeria

Food
production
30%
Manufacturing
product
44%
Transport
4%
Agriculture
4%
Mineral
3%
Oil
15%
Business
services
4%
Communication
services
3%
Educational
services
6%
FInancial
services
84%
Other services
not included
elsewhere
3%

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Nominal Effective Exchange Rate (NEER) and Real
Effective Exchange Rate (REER) Indices
The average 13-currency NEER index (November
2009=100) in the review period was 204.70 index
points, indicating a decline of 0.8 per cent, relative
to the level in the first half of 2020. The average
REER
index
(November
2009=100),
which
measures external competitiveness, was 72.52
points, representing a decline of 9.6 per cent,
compared with the level in the first half of 2020.
The indices suggested a depreciation against the
major trading partners, which could denote
improved competitiveness.
Figure 70: NEER and REER

Source: Central Bank of Nigeria


M1 2020
M2 2020
M3 2020
M4 2020
M5 2020
M6 2020
M7 2020
M8 2020
M9 2020
M10 2020
M11 2020
M12 2020
M1 2021
M2 2021
M3 2021
M4 2021
M5 2021 /2
M6 2021 /2
NEER
REER


CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Section Four


The short-to medium-term outlook of the Nigerian economy is
fragile but improving, drawing on dynamics in the global and
domestic economies, market sentiments and forecasts.
❖ Outlook
• Global Economy
• Real Domestic Economy
• Fiscal Policy
• Financial Sector, and
• External Economy

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
4.1 GLOBAL ECONOMIC OUTLOOK
Output: The global economic outlook for the rest
of 2021 remains largely optimistic on the back of
the expected increase in the pace of COVID-19
vaccination and the likely positive effects of
continued fiscal and monetary policy support.
Global output was projected to grow by 6.0 per
cent in 2021 and 4.9 per cent in 2022, owing to
the rebound in major economies.
In the advanced economies, output is projected
to grow by 5.6 per cent in 2021 and 4.4 per cent
in 2022, as against the 4.6 per cent contraction in
2020, reflecting a rebound in economic activities.
In the US, the output is projected to grow by 6.4
per cent in 2021, as against a contraction of 3.5
per cent in 2020, following significant fiscal
accommodation. The Euro Area and the UK
economies are also projected to grow by 4.4 per
cent and 5.3 per cent in 2021, vis-à-vis
contractions of 6.6 per cent and 9.9 per cent in
2020, respectively.
In emerging markets and developing economies
(EMDEs), growth is projected at 6.3 per cent in
2021 and 5.2 per cent in 2022, as against the
contraction of 2.1 per cent in 2020. The growth
would be driven by strong external demand and
higher commodity prices. The outlook for the
region remains optimistic, though downside risks,
such as the possibility of a new wave of COVID-19
pandemic and rising debt level, remain.
In East Asia, the recovery is expected to be strong
due to a substantial rebound in China, which is
projected to grow by 8.1 percent in 2021. India is
projected to grow by 9.5 per cent, as against a
contraction of 7.3 per cent in 2020, when the
country witnessed the largest outbreak of the
COVID-19 virus, underlying supply disruptions of
major food staples such as onions. In the Middle
East and Central Asia, the pace of growth in 2021
is projected to be 4.0 per cent in contrast to a
contraction of 2.6 per cent in 2020.
The outlook for Sub-Saharan Africa is positive,
with growth projected at 3.4 per cent in 2021, as
against a contraction of 1.8 per cent in 2020. The
projection for the region reflects improved
prospects for the region’s leading economies.
Nigeria’s economy is set to grow by 2.5 per cent
in 2021 from a contraction of 1.8 per cent in
2020. The South African economy was projected
to grow by 4.0 per cent in 2021 as against a
contraction of 7.0 per cent in 2020.
Consumer Prices: Global inflation is expected to
be subdued in 2021, on the back of positive
labour
market
conditions
occasioned
by
recoveries in global output and commodity
prices. Nevertheless, the IMF projections indicate
that developments in consumer prices across
regions would be mixed.
In advanced economies, prices are generally
projected to rise faster, reflecting the impact of
fiscal stimuli, monetary accommodation and
improvement in economic activities. In the
United States, inflation is projected to increase to
2.3 per cent in 2021, from 1.2 per cent in 2020.
In the Euro Area, inflation is projected to increase
by 1.4 per cent in 2021, from 0.3 per cent in 2020,
owing to the general increase in energy prices
and the second-round effects of earlier COVID19-related fiscal expansion. In the United
Kingdom, inflation is also expected to increase to
1.5 per cent in 2021, compared with 0.9 per cent
in 2020. Similarly, Japan’s consumer prices are
projected to increase marginally by 0.1 per cent
in 2021, relative to -0.2 per cent in 2020.
Consumer inflation is expected to decline in
emerging markets and developing economies. In
Asia, inflation is projected to decline to 2.0 per
cent in 2021, from 2.5 per cent recorded in 2020.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
Notably, inflation in China is also expected to
decrease to 1.2 per cent in 2021, compared with
2.4 per cent in 2020.
In Sub-Saharan Africa, consumer prices growth
rate is projected to decline to 9.8 per cent in
2021, from 10.8 per cent in 2020, as effects of
rising commodity prices and COVID-19-related
currency
depreciations
wane.
However,
consumer prices in the region’s leading
economies are projected to rise. Specifically,
inflation in Nigeria and South Africa are expected
to rise in 2021.
4.2 DOMESTIC ECONOMIC OUTLOOK
The outlook for the Nigerian economy remains
optimistic, as growth is expected to be sustained
for the rest of 2021. Real output is projected to
grow significantly in 2021 Q4, dependent on
continued progress in the containment of the
COVID-19 pandemic, improvement in crude oil
prices, and sustained monetary and fiscal policy
support.
Risks to the outlook include the resurgence of
COVID-19
infections,
lingering
security
challenges,
oil
price
volatility,
weakened
disposable income, structural rigidities, and rising
costs.
Figure 71: Economic Growth (Actual and Projections)

Source: National Bureau of Statistics (NBS) and CBN Staff Estimates

Domestic inflation remains elevated but is
expected to moderate further in the second half
of 2021. The moderation would largely be driven
by the reduction in food prices due, to increased
agricultural
output
and
supply
chain
improvements. However, prevailing security
challenges are likely to pose significant tailwinds
to inflation.
The outlook for the external sector is positive,
hinged on higher commodity prices, foreign
capital, and remittance inflows. Consequently,
both the external reserves and portfolio
investment are expected to improve in the shortto medium-term. A narrower deficit is expected
following an enhancement in the current
account.
Factors
responsible
for
the
development are: sustained improvement in
crude oil prices, steady domestic and global
economic recovery, sustained inflow of foreign
capital, and enhanced inflow of remittances,
supported by the Bank’s ‘Naira 4 Dollar Scheme’.
Furthermore, the signing into law, of the
Petroleum Industry Bill (PIB) and the Train 7 gas
expansion programme are expected to attract
foreign investors into the downstream oil sector,
boost export earnings and sustain the accretion
to external reserves, thereby improving external
sector viability.
Figure 72: External Reserves Projections (US$ Million)

Source: CBN Database and Staff Estimates
Note: ‘pb’ means per barrel
(7.00)
(2.00)
3.00
2020Q1
2020Q2
2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
Per cent (%)
GDP-$50
GDP-$55
GDP-$60
GDP-$65
GDP-$70
GDP-$75

2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
US$ Million
$55 pb
$60 pb
$65 pb
$70 pb
$75 pb

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
The expected higher FPI inflow is premised on
relatively attractive returns, particularly, on fixed
income securities. In addition, the demand
management policies of the Bank, coupled with
enhanced inflow, is expected to stabilise the
foreign exchange market.
Figure 73: Foreign Portfolio Investment

Source: CBN Database and Staff Estimates
Note: ‘pb’ means per barrel

Notwithstanding,
the
subsisting
security
challenges in the country, rising external debt,
and the continuous spread of the COVID-19 Delta
variant across the globe, could undermine
domestic outlook.
The outlook for the fiscal sector remains
optimistic for the second half of the year. The
positive outlook draws on the prospect of a
sustained rise in global crude oil prices and
improvement in domestic crude oil production,
following increasing recovery in global oil
demand, cessation of OPEC+’s supply cut and
relative peace in the oil-producing regions of
Nigeria. While the liquidity position of the
government, as evidenced by the elevated debt
service-revenue ratio, was a concern in the first
half of 2021, the continued implementation of
the FGN’s Strategic Revenue Growth Initiatives
(SRGI),
is
expected
to
further
diversify
government revenue sources, and bolster non-oil
revenue outcomes, and improve fiscal space.
Regardless, COVID-19 uncertainty and the
continued security challenges threaten the
performance of the 2021 FGN and subnational
budgets.
The financial sector is expected to remain sound,
safe, and stable for the rest of the year. The
Bank’s
regulatory
and
prudential
measures, particularly
credit
intervention
schemes, channeled towards growth-enhancing
sectors and regulatory forbearance policies, are
expected to drive credit delivery, and ensure the
continued soundness of the financial system in
the second half of the year. Furthermore, the
Global Standing Instruction (GSI) policy is
expected to strengthen banks’ risk management
practices and support financial sector resilience.
Credit concentration to risky sectors and moral
hazard, because of regulatory forbearance, are
risks to this outlook.


2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
US$ Million
$50 pb
$55 pb
$60 pb
$65 pb
$70 pb
$75 pb

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021


Section Five


An addendum of supporting activities and engagements of the
Bank, in the review period is presented here.
❖ International Meetings
• Regional
• Non-Regional

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

5.1 REGIONAL MEETINGS
i.
African Union (AU):
Meeting of the African Continental Free Trade
Area (AfCFTA)
The Meeting of the African Continental Free Trade
Area (AfCFTA) took place virtually on 1 January
2021. The Secretary-General of the AfCFTA, H.E.
Wamkele Mene, noted that 54 out of the 55
member countries of the African Union signed the
AfCFTA Agreement, 33 countries ratified the
Agreement, while over 40 countries submitted
their respective tariff offers. He further stated that
the implementation of the AfCFTA Agreement was
expected to be an instrument for Africa’s
development, given the opportunities it would
provide for Small and Medium Enterprises (SMEs)
to access new markets.

Peace and Security Council Meeting of the AU
The Peace and Security Council (PSC) of the African
Union (AU) held its 973rd meeting virtually on 18
January 2021 and considered the Report of the
Multinational Joint Task Force (MNJTF) against
Boko Haram. The Peace and Security Council:
•
commended the efforts made by the
MNJTF, the Republic of Benin, and Lake
Chad Basin Countries (LCBC), namely:
Cameroon, Chad, Niger and Nigeria, in the
fight against the Boko Haram terrorist
group. It noted the significant debilitating
capability of the terrorist group;
•
strongly condemned the continued attacks
and abuses committed by the Boko Haram
terrorist group, which had resulted in a
rising number of internally displaced
persons and destruction of infrastructure in
the region;
•
expressed concerns over the continued use
of Unmanned Aerial Vehicles (UAVs) within
the MNJTF Area of Operation by Boko
Haram in its reconnaissance operations.
Consequently, the PSC requested that the
Commission on the MNJTF, in collaboration
with LCBC and the Republic of Benin, should
engage with relevant stakeholders to
explore
more
effective
options
of
responding to the threat, as well as curtail
any forms of political, military, and financial
support to the Boko Haram terrorist group;
•
requested that the AU Commission should
mobilise additional support for the activities
of the MNJTF to fill some identified
capability gaps, especially the provision of
Counter-Improvised Explosive Devices (CIED), amphibious equipment, counter drone
equipment,
force
protection
vehicles,
surveillance equipment, and Intelligence,
Surveillance and Reconnaissance (ISR)
services. Other identified gaps include Quick
Impact and Peace Strengthening Projects
and Humanitarian support for the affected
population.
•
stressed the need to fully implement the
Regional Strategy for the Stabilisation,
Recovery, and Resilience of the Boko
Haram-affected areas of the Lake Chad
Basin Region through the African Union Post
Conflict Reconstruction and Development
Centre;
•
expressed gratitude to the AU’s partners,
especially the European Union, for their
continued support to the activities of the
MNJTF, including the 60 million Euros
provided to support the MNJTF for 2021;
•
expressed concerns over the humanitarian
crisis in the affected areas of the Lake Chad
Basin region and appealed to the AU
Member States and the international

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
community to step up humanitarian support
to the affected communities; and
•
renewed the mandate of the MNJTF for
another period of twelve months, effective
from 31 January 2021.
ii.
Ordinary
Session
of
the
Economic
Community of West African States
(ECOWAS) Authority of Heads of State and
Government
The 58th Ordinary Session of the ECOWAS
Authority of Heads of State and Government was
held virtually on 23 January 2021. The meeting
considered the Report of the 85th Ordinary Session
of the ECOWAS Council of Ministers from 20 – 21
January 2021. The Authority:
•
commended Member States for the measures
taken to contain the COVID-19 pandemic;
•
approved the harmonised ECOWAS Protocol
for cross-border movement of persons and
goods during the pandemic and capped the
cost of the COVID-19 PCR test at US$50 for
ECOWAS nationals traveling within the region.
It also approved a pooled procurement
approach for
anti-COVID vaccines
and
instructed the ECOWAS Commission to set up
a Vaccine Revolving Fund;
•
noted the deterioration in attaining the
ECOWAS macroeconomic convergence in
2020, due to measures taken by the Member
States to combat COVID-19 Pandemic;
•
granted ECOWAS Member States waiver in
respect of achieving the macroeconomic
convergence criteria in 2021, given the
expected negative impact of the second wave
of the COVID-19 pandemic on Member states’
economies;
•
directed the ECOWAS Commission, the West
African Monetary Agency (WAMA), West
African Monetary Institute (WAMI), UEMOA
Commission, and Member States’ central
banks, to submit to its next Ordinary Session:
a draft of the new Convergence and
Macroeconomic
Stability
Pact
among
ECOWAS member states, with a start date of
1 January 2022, for the convergence phase;
and a new roadmap for the ECOWAS Single
Currency Programme;
•
directed the ECOWAS Commission, WAMA,
and Member States’ central banks to expedite
work toward the rapid interconnection of
ECOWAS Payments Systems and submit a
report at the following Ordinary Session
scheduled to hold in June 2021;
•
noted the commencement of the AfCFTA on 1
January
2021,
the ratification
of
the
agreement by 12 out of 15 ECOWAS Member
States, and the submission to the African
Union of common schedules of tariff
concessions for trade in goods and specific
commitments on trade in services in five
priority sectors by some Member States;
•
encouraged Member States, yet to ratify the
AfCFTA Agreement, to accelerate the process
of ratification to promote harmonious trade
liberalisation in the region and maintain the
integrity of the ECOWAS Common External
Tariff;
•
directed the ECOWAS Commission to continue
to support the Member States in the
development and implementation of national
strategies for adaptation to the rules of the
AfCFTA;
•
implored
the ECOWAS
Commission
to
continue advocacy campaigns in the Member
States for greater involvement
of all
stakeholders, and to continue to coordinate
the approaches of Member States in
negotiations under the AfCFTA;
•
expressed concerns over continued terrorist
attacks in frontline countries, particularly in
Burkina Faso, Mali, Niger and Nigeria; and

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
•
acknowledged contributions by Ghana and
Nigeria to fund the 2020 – 2024 Action Plan
implementation and urged the other Member
States to expedite payment of their voluntary
contributions.
iii.
West African Institute for Financial and
Economic Management (WAIFEM) Endof-Year Statutory Meetings
The End-of-Year Statutory Meetings of the West
African Institute for Financial and Economic
Management (WAIFEM) held virtually in February
2021. The Meeting commenced with the 43rd
Meeting of the Technical Committee from 4 - 5
February 2021, followed by the 40th Meeting of
the Board of Governors on 15 February 2021.
The Technical Committee of WAIFEM considered
and recommended the following draft reports to
the Board of Governors for approval:
•
Strategic Plan for 2021 - 2025;
•
Budget for the Year 2021;
•
Manual for WAIFEM Endowment Fund;
•
Manual for WAIFEM Research Account; and
•
the Impact Assessment of the Doctoral
Fellowship/Visiting Scholar Schemes.


iv.
West African Monetary Zone (WAMZ)
End-of-Year Statutory Meetings
The End-of-Year Statutory Meetings of the West
African Monetary Zone (WAMZ) commenced with
the 48th Meeting of the WAMZ Technical
Committee from February 8 - 9, 2021, followed by
the 42nd Meeting of the Committee of Governors
of WAMZ on 15 February 2021, and concluded
with the 45th Meeting of the Convergence Council
of Ministers and Central Bank Governors on 16
February 2021.


The following documents were considered and
recommended for approval:
•
WAMZ Macroeconomic Developments and
Convergence Report, end-June 2020;
•
Paper on Assessing the Preparedness of
WAMZ Member States’ Migration to Inflation
Targeting Framework;
•
Paper on Fiscal Convergence in the West
African Monetary Zone (WAMZ) ;
•
WAMZ Payments System Development
Project – Progress Report;
•
Proposed WAMI Work Programme and
Budget FY 2021;
•
Model Act for Specialised Deposit-taking
Institutions and Specialised Deposit-taking
Holding Companies of the West African
Monetary Zone;
•
Report of the 38th Meeting of the College of
Supervisors of the WAMZ (CSWAMZ); and
•
Report of the 3rd Meeting of the College of
Supervisors
of
Non-Bank
Financial
Institutions.
v.
West African Monetary Agency (WAMA)
End-of-Year Statutory Meeting
The End-of-Year Statutory Meeting of the West
African Monetary Agency (WAMA) was held
virtually. The Meeting commenced with the 38th
Meeting of the Technical Committee of WAMA
from 10 – 12 February 2021, followed by the 57th
Meeting of the Committee of Governors of WAMA
on 15 February 2021.
The Technical Committee of WAMA considered
and recommended the following reports to the
Committee of Governors:
•
Report on the ECOWAS Monetary
Cooperation Programme for first Half
2020;
•
Report on Exchange Rate Developments
in ECOWAS;

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
•
Establishment of a Community Solidarity
and Stabilisation Fund;
•
Update on Reserve pooling for the
ECOWAS single currency area;
•
Update on size and distribution of the
capital of the CBWA;
•
WAMA Work Programme and Proposed
Budget for 2021; and
•
Review of WAMA staff terminal benefits.

vi.
Meeting of the Technical Sub-Committee
on
the
ECOWAS
Single
Currency
Programme
ECOWAS Commission organised a virtual meeting
of the Technical Sub-Committee on the ECOWAS
Single Currency Programme via video conference,
from 7 – 9 April 2021. The Meeting reviewed the
following:
i.
draft of the new Sheet for the ECOWAS
Single Currency Programme proposed by
the Regional Institutions; and
ii.
proposal for the definition of “majority”
within the framework of the Pact for
Convergence
and
Macroeconomic
Stability between the ECOWAS Member
States.
The Meeting was attended by representatives of
the Central Banks, ECOWAS and UEMOA
Commissions, the West African Monetary Agency
(WAMA), and the West African Monetary Institute
(WAMI).
vii.
Inaugural Meeting for the Establishment
of the Proposed Trade Development
Committee of the West African Monetary
Zone
At its 45th meeting held virtually on 16 February
2021, the Convergence Council of the WAMZ
called for a Trade Development Committee to
focus on connectivity across all transport modes,
particularly maritime, to facilitate faster and

cheaper movement of goods within the zone. In
this regard, the Council directed WAMI, to
convene an inaugural meeting to establish the
Trade Development Committee of the WAMZ.
Consequently, the inaugural meeting for the
establishment
of
the
Trade
Development
Committee of the West African Monetary Zone
(WAMZ) held virtually from 13-14 April 2021 and
considered the concept note for establishing the
Trade Development Committee of the WAMZ.

viii.
African
Union
Specialised
Technical
Committee (STC) on Finance, Monetary
Affairs,
Economic
Planning,
and
Integration.

The West African Monetary Agency (WAMA)
organised a one-day virtual Seminar for the
Governors of the central banks of Member States
of the ECOWAS on ‘Policy Responses to Emerging
Extreme Events and Lessons from the European
Monetary Integration Process’ on 28 May 2021.
The Seminar discussed the experience of the Euro
Area vis-à-vis its monetary union that took off in
1999. The Governors examined the policies
adopted in their various central banks and how
they helped stabilise their economies during
similar economic crises as the current COVID-19
pandemic.
The Seminar discussed the following:
•
Monetary policy challenges in the time of
Covid-19 and COP26;
•
Banking Supervision and Climate Change,
Relevance for the ECOWAS;
•
Towards Convergence, the European and
ECOWAS Experience; and
•
Building a strong Monetary Institute, the
Role of WAMA.

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021

ix.
Continental Seminar of the Association of
African Central Banks (AACB) 2021
The first Continental Seminar of the Association of
African Central Banks (AACB) for 2021 was held
virtually from 31 May to 2 June 2021, on the
theme: Remittances, Fluctuations of Exchange
Rates and Management of Foreign Reserves:
Financing
Opportunities
for
Africa
and
Implications for African Central Banks.
The Seminar held two plenary sessions centered
around six presentations, namely:
•
contribution of remittances in enhancing
development finance in Africa;
•
leveraging FinTech to ensure efficiency
and compliance in the remittance market;
•
exchange
rate
fluctuations
and
consolidation of foreign reserves in Africa;
•
migrant workers' remittances: African
financing economies and the impact of
COVID-19;
•
fintech and the migrant remittance
market; and
•
migrant workers' remittances, current
account structure, and the consolidation
of foreign exchange reserves.

x.
Meeting of Nigerian Stakeholders on
Trade Development
The Meeting of Nigerian stakeholders on trade
developments led by the DG WAMI was held at the
CBN between 21-24 June 2021.
The WAMZ Convergence Council in February
2021 directed WAMI to organise a meeting with
the key stakeholders on trade in Nigeria before
convening the meeting of all WAMZ member
states. The meeting objectives were to harness
Nigeria’s
stakeholders'
ideas
and
outline
actionable points to promote trade in WAMZ
member countries.
During the meeting, a presentation was made by
the Nigeria Export-Import (NEXIM) Bank, titled
“The Sea Link Project.” The presentation gave an
insight into what NEXIM had done on trade
development.

5.2 NON-REGIONAL MEETINGS
i.
2021 Spring Meetings of the Boards of
Governors of the International Monetary
Fund (IMF)/World Bank Group
The 2021 Spring Meetings of the Board of
Governors of the World Bank Group (WBG), the
International Monetary Fund (IMF), and the InterGovernmental Group of Twenty-Four (G-24) on
International Monetary Affairs and Developments
were held virtually from 29 March – 9 April 2021.
The sideline meetings included those of the
International Monetary and Finance Committee
(IMFC) of the Governors of IMF, the Development
Committee (DC) of the World Bank Group, as well
as the meetings of the Ministers of the G-24. The
proceedings of the meetings were;
The G-24 Ministers:
•
noted that though the global economy
showed signs of recovery from the COVID-19
crisis, the path to broad-based and inclusive
recovery was fraught with uncertainty about
the availability and access to safe and
affordable vaccines for all and the strength of
external financial support to developing
countries;
•
noted that the pandemic had strained health
systems and severely hit economies of
developing countries, with limited policy
space to respond;
•
observed that millions of people had fallen
into extreme poverty, and food insecurity had
risen steeply, especially in the poorest

CENTRAL BANK OF NIGERIA
Half Year Economic Report, 2021
countries and those living in fragile and
conflict-affected areas;
•
indicated
that
G-24
members’
urgent
priorities were to contain the pandemic, thus,
scaling
up
vaccinations
and
rebuilding
economies to avoid a lost decade of
development and a major decline in people’s
well-being;
•
noted that international cooperation was
essential to secure a better recovery for all
countries and promote a strong pace of global
convergence of per capita income levels
between advanced and developing countries;
•
reiterated the importance of a strong global
financial safety net, with an adequately
resourced, quota-based IMF at its center; and
•
welcomed the stronger support in the IMF’s
Executive Board for a meaningful new
allocation of Special Drawing Rights (SDRs) to
address long-term global liquidity needs.
The IMFC:
•
noted that the global economy was recovering
from the crisis faster than expected due to the
unprecedented policy response and rapid
progress in vaccine development;
•
highlighted that the prospects for recovery
were highly uncertain and uneven within and
across countries due to varying policy space,
different economic structures and rigidities,
pre-existing vulnerabilities, and uneven access
to vaccines;
•
emphasised
that
elevated
financial
vulnerabilities could pose risks should global
financial conditions tighten swiftly, and that
sound policy was essential for the stability of
the international monetary system;
•
remained committed to ensure that its
exchange rates reflect underlying economic
fundamentals and noted that exchange rate
flexibility could facilitate the adjustment of
their economies; and
•
called on the IMF to make a comprehensive
proposal on a new Special Drawing Rights
(SDR) general allocation of US$650 billion to
help meet the long-term global need to
supplement
reserves
while
enhancing
transparency and accountability in the
reporting and use of SDRs.

The Development Committee:
•
noted that the COVID-19 pandemic had
caused
unprecedented
public
health,
economic and social crisis, threatening the
lives and livelihoods of millions. The economic
shock
increased
poverty,
worsened
inequalities, and reversed development gains;
•
observed that fragility, conflict, and violence
(FCV) had worsened in many regions. It was
urgent to address drivers of FCV, forced
displacement, and migration. It looked
forward to the implementation of the FCV
strategy.
•
highlighted a sustainable and inclusive
recovery required for addressing financial
sector vulnerabilities, eliminating tax evasion,
and mobilising vital investments; and
•
commended the WBG for scaling-up climate
finance over the past two years, its continued
role as the largest multilateral source of
climate investment in developing countries,
emphasis on biodiversity, and technical and
financial support for adaptation, mitigation,
and resilience.

G-24 Technical Group Meeting
The Intergovernmental Group of Twenty-Four (G24) Technical Group Meeting (TGM) was held
virtually from February 23 - March 18, 2021. The
theme was “Toward an Agenda for an Inclusive,
Resilient and Sustained Recovery.” Deliberations
were centered on the adverse economic impact of
the COVID-19 Pandemic on Emerging Markets and
Developing Countries (EMDCs).
During the meeting, sessions on Managing Capital
Flow Volatility, International Tax Cooperation,
Domestic Resource Mobilisation to Support a
Better Post-COVID Recovery and Delivering on
Climate Finance to Support Better Recovery and
Climate Goals were held.