ECONOMIC REPORT
FOURTH QUARTER 2014


CENTRAL BANK OF NIGERIA


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

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

Contents


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Text Tables


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Appendix Tables
Figures


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1.0 Summary
Provisional data indicated that growth in key monetary aggregate
was moderate in the fourth quarter of 2014. Over the level at the
end of the preceding quarter, broad money supply, (M2), grew by
0.1 per cent, compared with 4.0 per cent at the end of the
preceding quarter. The development relative to the preceding
quarter reflected, largely, the growth of 5.4 per cent in other assets
(net) which more than offset the effects of the 5.1 per cent decline
in foreign assets (net) of the banking system during the review
quarter.
Available data indicated that banks’ deposit and lending rates
trended upward in the fourth quarter. The spread between the
weighted average term deposit and maximum lending rates at
17.44 percentage points, same as in the preceding quarter. The
margin between the average savings deposit and the maximum
lending rates, however, widened by 0.12 percentage point to 22.36
per cent. The weighted average inter-bank call rate rose by 3.7
percentage points to 14.75 per cent in the fourth quarter of 2014,
reflecting the liquidity condition in the inter-bank funds market.
Provisional data indicated that the value of money market assets
outstanding at the end of the fourth quarter of 2014 increased by
3.52 per cent to N7,667.09 billion, compared with the increase of
2.92 per cent at the end of the preceding quarter. The development
was attributed to the 3.46 and 24.69 per cent increase in FGN Bonds
and Banker’s Acceptance outstanding, respectively. Available data
indicated that developments in the Nigerian Stock Exchange (NSE)
were mixed during the fourth quarter of 2014.
Total federally-collected revenue
stood at
N2,299.18 billion,
representing a decline of 15.4 and 17.4 per cent below the
proportionate budget estimate and receipts in the preceding
quarter, respectively. At N1,466.22 billion, oil receipts, which
constituted 63.8 per cent of the total, fell below the proportionate
budget estimate and the level in the preceding quarter by 18.1 and
14.9 per cent, respectively. The fall in oil receipts was attributed,
largely, to a decline in crude oil and gas exports during the review
quarter.
Non-oil receipts, at N832.95 billion, was lower than the budget
estimate and the receipts in the preceding quarter by 10.2 and
21.46 per cent, respectively. Federal Government retained revenue
was N928.14 billion, while total expenditure was N1,149.94 billion.
Thus, the fiscal operations of the Federal Government resulted in an


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Economic Report Fourth Quarter

estimated deficit of N221.80 billion in the fourth quarter of 2014,
compared with the quarterly budget and the preceding quarter’s
deficit of N241.05 billion and N143.56 billion, respectively.
Activities in the agricultural sector were dominated by harvesting of
tubers, fruits and vegetables. Nigeria’s crude oil production,
including condensates and natural gas liquids, averaged at 1.99
million barrels per day (mbd) or 183.08 million barrels for the quarter.
Crude oil export stood at 1.54 mbd or 141.68 million barrels for the
quarter, while deliveries to the refineries for domestic consumption
remained at 0.45 mbd or 41.4 million barrels. The average price of
Nigeria’s reference crude, the Bonny Light (370 API), declined by 24.6
per cent below the level in the preceding quarter.
The end-period headline inflation rate (year-on-year) was 8.0 per
cent, compared with the 8.3 and 8.0 per cent recorded at the end
of the preceding quarter and the corresponding quarter of 2013,
respectively. Inflation rate on a twelve-month moving average basis
was 8.0 per cent, the same level as in the preceding quarter.
Provisional data indicated that foreign exchange inflow and outflow
through the Central Bank of Nigeria (CBN) amounted to US$10.36
billion and US$14.21 billion, respectively, resulting in a net outflow of
US$3.85 billion. Foreign exchange sales by the CBN to the authorized
dealers amounted to US$12.46 billion, compared with US$10.20 billion
in the preceding quarter. The average exchange rate of the naira
vis-à-vis the US dollar at the rDAS window was N162.33 per US dollar,
compared with N157.29 per US dollar in the preceding quarter.
Relative to their respective levels in the preceding quarter, the naira
depreciated by 5.2 and 5.7 per cent at both the bureau-de-change
and inter-bank segments of the market.
The World Bank in its “Global Economic Prospects” noted that the
global recovery had been weaker than anticipated, partly due to
lower than expected growth outturns in the euro area, Japan,
Emerging Europe (Russia) and Latin America. In particular, the lower
growth in the euro area and Japan accounted for more than half of
the downward revisons to global growth in 2014. Global growth
picked up only marginally to 2.6 percent in 2014 from 2.5 percent in
2013.
World crude oil demand was estimated at 92.69 mbd in the fourth
quarter of 2014, representing an increase of 1.0 per cent above the
91.73 per cent recorded in the third quarter of 2014. World crude oil
supply was estimated at an average of 93.23 mbd, representing an
increase of 0.9 per cent above the level recorded in the preceding
quarter. The OPEC Reference Basket price of eleven selected crude


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Economic Report Fourth Quarter

streams stood at US$73.49 per barrel in the fourth quarter of 2014,
compared with US$100.86/b and US$107.67/b recorded in the
preceding quarter and the corresponding quarter of 2013,
respectively. The prices of the UK Brent, the West Texas Intermediate
and the Forcados, also declined to close at US$76.80, US$73.21 and
US$77.99 per barrel, respectively.
Other major international economic developments and meetings of
importance to the domestic economy during the review quarter
included: the 2014 Annual Meetings of the Board of Governors of the
World Bank Group and the International Monetary Fund (IMF), held
in Washington D.C., USA between October 6 and 13, 2014; the
African Development Bank Group’s (AfDB) Board of Executive
Directors approved a new Regional Integration Policy and Strategy
(RIPoS) for the period 2014 - 2023 on Wednesday, November 19,
2014; also, the AfDB and the Alliance for a Green Revolution in Africa
(AGRA) Kenya signed a grant agreement to support the growth and
formalization of 54 African seed companies in eleven countries on
November 14, 2014, in Nairobi; a high level strategy meeting was
held on Thursday, October 9, 2014 in Washington D.C., USA between
the AfDB and the IMF Managing Director, Christine Lagarde, UN
Secretary General, Ban Ki-moon and World Bank President Jim Yong
Kim, on efforts at combating the Ebola scourge; and final the
Bureau Meeting of the Association of African Central Banks (AACB)
was held on December 4, 2014 in Port Louis, Mauritius, at the Bank of
Mauritius Tower.


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2.0 Financial Sector Developments
2.1 Monetary and Credit Developments
Provisional data indicated that growth in key monetary aggregate
was moderate at the end of the fourth quarter of 2014.
Developments in banks’ deposit and lending rates were mixed
during the review quarter. The value of money market assets
outstanding increased, due largely, to the increase in FGN Bonds.
Moreover, developments in the Nigerian Stock Exchange (NSE) were
mixed.
Provisional data indicated that growth in the key monetary
aggregate was moderate at the end of the fourth quarter of
2014. Relative to the level at the end of the third quarter of
2014, broad money supply, (M2), grew marginally by 0.1 per
cent to N16,833.2 billion, compared with the growth of 4.0 and
7.3 per cent at the end of the preceding quarter and the
corresponding quarter of 2013, respectively. The development
relative to the preceding quarter reflected, largely, the growth
of 5.4 per cent in other assets (net), which more than offset the
effects of the 5.1 per cent decline in foreign assets (net) of the
banking system. Relative to the level at end-December 2013,
M2 grew by 7.3 per cent, driven largely, by the increase in
domestic credit (net) and other asset (net)of the banking
system.
Narrow money supply (M1), at N6,266.7 billion, fell by 8.7 per
cent, at the end of the review quarter, in contrast to the
increase of 0.4 per cent at the end of the preceding quarter.
The development, relative to the preceding quarter, was
attributed to the decline of 12.8 per cent in its currency
outside banks component. Relative to the level at endDecember 2013, M1 declined by 10.9 per cent, due largely, to
the 12.3 and 5.5 per cent fall in its demand deposit and
currency components.
Quasi-money rose by 6.2 per cent to N10,566.6 billion at the
end of the fourth quarter of 2014, compared with the increase
of 6.6 per cent at the end of the preceding quarter. The
development was attributed to the increase in time and
savings deposits with banks (Fig. 1, Table 1).
Growth in key
monetary
aggregate was
moderate during
Q4 2014.


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Economic Report Fourth Quarter

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

-15
-10
-5

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

At N16,129.5 billion, aggregate banking system’s credit (net)
to the domestic economy grew marginally by 0.2 per cent at
the end of the fourth quarter of 2014, compared with the
growth of 7.2 and 11.1 per cent at the end of the preceding
quarter and the corresponding period of 2013, respectively.
The development relative to the level at the end of the third
quarter of 2014 reflected the growth of 2.6 per cent in net
claims on private sector.
Banking system’s credit (net) to the Federal Government, at
the end of the review quarter, fell by 27.3 per cent to negative
N2,017.5 billion, in constrast to the increase of 19.7 and 48.1
per cent at the end of the preceding quarter and the
corresponding period of 2013, respectively. The development
relative to the level at the end of the preceding quarter was
attributed to the decline in banking system’s holding of
Federal Government treasury securities, particularly treasury
bills.
At the end of the fouth quarter of 2014, banking system’s
credit to the private sector rose by 2.6 per cent to N18,147.0

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

Banking system
credit to the
Federal
Government fell by
27.3 per cent at
the end of the
fourth quarter of
2014.


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Economic Report Fourth Quarter

billion, compared with 4.1per cent increase in the preceding
quarter, but was in contrast to the 0.5 per cent decline in the
corresponding quarter of 2013. The development relative to
the preceding quarter reflected the growth of 2.7 per cent in
claims on the core private sector (Fig. 2, Table 1).
Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy2
-30
-20
-10

-50

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

At N7,358.2 billion, foreign assets (net) of the banking system
fell by 5.1 per cent at the end of the fourth quarter of 2014, in
contrast the growth of 1.1 per cent at the end of the
preceding
quarter.
The
development
relative
to
the
preceding quarter was attributed, largely, to the 26.3 per cent
fall in banks holdings of foreign assets.
Other assets (net) of the banking system rose by 5.4 per cent
to negative N6,654.4 billion at the end of the review quarter, in
contrast to the decline of 5.4 per cent at the end of the
preceding quarter of 2014, but showed an increase of 1.9 per
cent when compared with the leval at end of the
corresponding quarter of 2013.


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


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Economic Report Fourth Quarter

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

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Foreign Assets (Net)

Other Assets (Net)

Broad Money Supply (M2)

Quasi-Money

Narrow Money Supply (M1)

Memorandum Items:
Reserve Money (RM)


2.2
Currency-in-circulation (CIC) and Deposits at
the CBN
At N1,798.0 billion, currency-in-circulation rose by 16.2 per cent
at the end of the fourth quarter, compared with the increase
of 3.2 and 4.3 per cent at the end of the preceding quarter
and the corresponding quarter of 2013, respectively. The
development
relative
to
the
preceding
quarter
was
attributed, largely, to the 10 per cent increase in currency
outside banks.

Total deposits at the CBN rose by 10.0 per cent to N7,826.0
billion, compared with the increase of 3.1 per cent at the end
of the third quarter of 2014. The development reflected,
largely, the 22.7 per cent increase in banks deposits, which
more than offset the 57.6 per cent fall in the deposits of
“Others”. Of the total deposits, the shares of the Federal
Government, banks and ‘’Others’’ were N3,427.4 billion (43.8
per cent), N4,166.8 billion (53.2 per cent) and N231.8 billion
(3.0 per cent), respectively.
Reserve money (RM), at N5,964.8 billion, rose by 20.7 per cent,
compared with the 3.2 per cent increase recorded at the end
of the preceding quarter. The development, relative to the
level at the end of the preceding quarter, was attributed to
the increase of 16.2 and 22.7 per cent in its currency and
demand deposit components.

Reserve money
(RM) rose at the
end of the fourth
quarter of 2014.


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Economic Report Fourth Quarter

2.3
Money Market Developments
Financial market indicators became volatile during the review
quarter, partly attributed to the policy measures introduced
during the quarter. These measures included; the restriction on
the sale of foreign exchange at the official window to certain
transactions which were subsequently required to be funded
at the inter-bank foreign exchange market, the daily
maximum limit of N7.5 billion placed on the standing deposit
facility (SDF) and the increase in the Cash Reserve
Requirements (CRR)on private sector funds, which resulted in
shortage of liquidity and triggered a spike in the pricing of
inter-bank transactions. Open Market Operations (OMO) was
deployed to manage the level of liquidity in the system.
Patronage of the Federal Government securities was low
during the quarter. Money market rates reflected the liquidity
condition in the system, following the implementation of the
the upward review in CRR on private sector funds from 15.0
per cent to 20.0 per cent.
Provisional data indicated that the total value of money
market assets outstanding at the end of the fourth quarter of
2014 stood at N7,667.09 billion, showing an increase of 3.5 per
cent, compared with the increase of 2.9 per cent at the end
of the preceding quarter. The development was attributed,
largely, to the 3.5 and 24.7 per cent increase in the FGN Bonds
and Bankers’ Acceptance (BA), respectively.

2.3.1
Interest Rate Developments
Available data indicated an upward trend in banks’ deposit
and lending rates, with the exception of prime lending rate,
during the fourth quarter of 2014. All rates on deposits of
various maturities rose from a range of 3.36 – 9.57 per cent in
the third quarter of 2014 to 3.44 – 9.99 per cent in the fourth
quarter. Similarly, at 8.36 per cent, the average term deposit
rate rose by 0.16 percentage point above its level in the
preceding quarter. The maximum lending rate also rose by
0.16 percentage point above its level in the preceeding
quarter to 25.80 per cent. However, prime lending rate
declined by 0.21 percentage point below the level in the
preceding quarter to 16.28 per cent. Consequently, the
spread between the weighted average term deposit and
Money market
rates were high
during the review
period.
The spread
between the
weighted –
average term
deposit and
maximum
lending rates
remained the
same as in the
preceeding
quarter.


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Economic Report Fourth Quarter

maximum lending rates remained at 17.44 percentage points,
same as in the preceding quarter. The margin between the
average savings deposit and the maximum lending rates,
however, widened by 0.08 percentage point to 22.36 per cent
from 22.28 per cent in the preceeding quarter. With the
headline inflation rate at 8.0 per cent at end-December 2014,
most deposit and lending rates were positive in real terms.
At the interbank funds segment, the weighted average interbank call rate, which stood at 11.05 per cent at the end of the
preceding quarter, rose by 3.7 percentage points to 14.75 per
cent in the fourth quarter of 2014, reflecting the liquidity
condition in the banking system. Similarly, the weighted
average rate at the Open-Buy-Back (OBB) segment rose by
3.45 percentage points to 14.41 per cent, from 10.96 per cent
in the preceding quarter. The Nigeria Inter-bank Offered Rate
(NIBOR) for the 7-day tenor rose to 16.19 per cent, above
11.28 per cent in the preceding quarter. Similarly, the 30-day
tenor rose from 12.58 per cent in the preceding quarater to
12.75 per cent in the fourth quarter of 2014 (Fig. 3, Table 2).
Figure 3: Selected DMBs Interest Rates (Average)

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


Interbank call rate
rose in Q4 2014.


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Economic Report Fourth Quarter

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

Prime Lending

Interbank

Maximum Lending


2.3.2
Commercial Paper (CP)
Commercial Paper (CP) outstanding held by DMBs fell by 8.2
per cent to N9.8 billion at the end of the fourth quarter of
2014, compared with the value of N10.67 billion at the end of
the preceding quarter. The development was due to the
decline in investment in CP by the commercial banks during
the review quarter. Thus, CP constituted 0.13 per cent of the
total value of money market assets outstanding, during the
review period, compared with 0.14 per cent at the end of the
preceding quarter.
2.3.3
Bankers’ Acceptances (BAs)

At the end of the review quarter, BAs increased by 24.7 per
cent to N36.60 billion, compared with N29.38 billion at the end
of the preceding quarter. The development was attributed to
the increase in investment in BAs by the commercial banks
during the quarter. Consequently, BAs accounted for 0.5 per
cent of the total value of money market assets outstanding,
compared with 0.4 per cent at the end of the preceding
quarter.
2.3.4 Open Market Operations
In the Open Market Operations (OMO), bills with tenors
ranging from 97-179 days were used for liquidity management
in the fourth quarter of 2014. Total sales was N1,482.74 billion
and subscription was N1,976.55 billion. The bid rates ranged
from 10.50 – 15.00 per cent, while the stop rates were between
10.80 – 13.00 per cent. Matured bills amounting to N2,247.70
billion were repaid, translating to a net withdrawal of N764.96
billion in the review period.
2.3.5
Primary Market
At the primary market segment, NTBs of 91-, 182- and 364-day
tenors were offered. Total amount offered, allotted and
subscribed to was N924.15 billion, N1,059.48 billion and N924.13
Investment in
CP by banks fell
in the fourth
quarter of 2014.
DMBs’ holdings of
BAs increased
during Q4 of
2014.


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Economic Report Fourth Quarter

billion, respectively. At the 91-day segment, total subscription
and allotment were N242.49 billion and N223.43 billion,
respectively, with bid rates ranging from 8.00 to 18.00 per cent,
while the stop rates were from 9.7 – 11.25 per cent. For the
182-day segment, total subscription and allotment amounted
to N289.79 billion and N247.89 billion, respectively. The bid
rates ranged from 9.00 –18.19 per cent, while the stop rates
were between 10.20 -14.48 per cent. At the 364-day segment,
total subscription and allotment was N527.20 billion and
N457.33 billion, respectively, with bid rates ranging from 9.50 –
17.44 per cent, while stop rates ranged from 10.79 – 15.99 per
cent.
2.3.6
Bonds Market
FGN Bonds of 3-, 10- and 20-year tranches were reopened
during the review period. The total amount offered,
subscribed to and allotted was N203.61 billion, N314.32 billion
and N182.11 billion, respectively. In addition, N10.33 billion of
the 10-year bond was allotted on a non-competitive basis.
The marginal rates for the bonds ranged from 12.00-15.49 per
cent, compared with 11.00 -12.99 per cent in the preceding
quarter. The rise in yield during the review period could be
attributed to the fall in both the demand and the level of
liquidity in the system, arising from further monetary tightening.
2.3.7
CBN Standing Facilities
Total request for the standing lending facility (SLF) granted
during the review period was N1,395.97 billion (inclusive of
intra-day liquidity facility converted to overnight repo) with
total interest earned amounting to N0.90 million, compared
with the total request of N331.78 billion and total interest of
N0.18 million in the preceding quarter.
Total standing deposit facility (SDF) granted during the review
period was N10,986.01 billion, while the cost incurred stood at
N3.96 billion, compared with the request of N17, 960.61 billion
and total cost of N7.63 billion in the preceding quarter.


Subscription for FGN
Bonds of various
maturities decreased
during the fourth
quarter of 2014.


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2.4
Deposit Money Banks’ Activities
Available data indicated that the total assets and liabilities of
the commercial banks stood at N27,413.58 billion at the end of
the fourth quarter of 2014, representing an increase of 5.7 per
cent over the level at the end of the preceding quarter. Funds
were sourced, largely, from increased mobilization of time,
savings and foreign currency deposits, issuance of bond and
claims on the central government. The funds were used
mainly, for accretion to reserves, reduce unclassfified liabilities
and demand deposits.
At N13,812.3 billion, banks’ credit to the domestic economy,
fell by 1.2 per cent compared with the level at the end of the
preceding quarter. The development was attributed to the
48.0 per cent decline in claims on the Federal Government in
the review period.
Central Bank’s credit to the commercial banks fell by 7.7 per
cent to N224.6 billion at the end of the review quarter,
reflecting the decrease in CBN loans and advances to banks.
Total specified liquid assets of the banks stood at N6,243.2
billion, representing 34.5 per cent of their total current
liabilities. At that level, the liquidity ratio fell by 3.2 percentage
points below the level in the preceding quarter, but was 4.5
percentage points above the stipulated minimum ratio of 30.0
per cent. The loans-to-deposit ratio, at 63.6 per cent, was 30.2
percentage points above the level at the end of the
preceding quarter, but was 16.6 percentage points below the
prescribed maximum ratio of 80.0 per cent.
2.5
Discount Houses’ Activities
Total assets/liabilities of the discount houses stood at N131.3
billion at the end of the fourth quarter of 2014, indicating a
decline of 15.5 and 1.9 per cent below the levels in the
preceding quarter and the corresponding quarter of 2013,
respectively. The decline in assets relative to the preceding
quarter was accounted for, mainly, by the significant fall of
81.2 per cent in claims on banks, which more than offset the
effect of the marginal increase in claims on others, fixed assets
and cash and balances with banks. Correspondingly, the
decline in total liabilities was attributed to the 99.6 per cent
decline in borrowings which more than offset the increase in
At 34.5 per cent,
liquidity ratio in Q4
2014 was 4.5
percentage points
above the
stipulated
minimum ratio,
while the Loan-todeposit ratio was
below the
prescribed
maximum of 80
per cent.


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Economic Report Fourth Quarter

other amount owed to and other liabilities.
Discount houses’ investment in Federal Government securities
of less than 91-day maturity rose by 9.3 per cent to N57.6
billion and represented 60.4 per cent of their total deposit
liabilities. At this level, discount houses’ investment was 0.4
percentage point above the prescribed minimum level of 60.0
per cent for fiscal year 2014. Total borrowing by the discount
houses was N23.6 billion, while their capital and reserves stood
at N29.8 billion. This resulted in a gearing ratio of 0.8:1,
compared with the stipulated maximum of 50:1 for the fiscal
year.
2.6
Capital Market Developments
2.6.1
Secondary Market
Available data indicated that developments in the Nigerian
Stock Exchange (NSE) were mixed in the fourth quarter of
2014. Aggregate volume of traded securities increased
marginally by 7.8 per cent to 28.9 billion shares, while value of
traded shares declined by 28.2 per cent to N316.99 billion in
279,274 deals, compared with 26.80 billion shares valued at
N441.25 billion in 312,482 deals, in the third quarter of 2014.
Provisional data indicated that the Financial Services Industry
(measured by volume) led the activity chart with 21.8 billion
shares valued at N173.2 billion traded in 149,100 deals; thus
contributing 75.4 and 54.6 per cent to the total equity turnover
volume and value respectively, compared with 20.6 billion
shares valued at N203.6 billion traded in 149,030 deals
recorded in the previous quarter. The Banking subsector of the
Financial Services sector was the most active subsector
(measured by volume) during the review quarter.
.


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Figure 4: Volume and Value of Traded Securities

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


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

Value (N Billion)


2.6.3
New Issues Market
There were two (2) new & four (4) supplementary listings in the
review month (see table 4 below).
Table:4 New & Supplementary Listing on the Nigerian Stock Exchange Fourth Quarter

S/N Company
Additional Shares (Units)
Reasons
Listing
1 Unity Bank Plc
78.45 billion ordinary shares
Rights Issue
Supplementary
2 Omoluabi Savings & Loans Plc
5 bilion ordinary shares
New
New
3 Daar Communication Plc
4.0 billion Ordinary share
Bonus Issue
Supplementary
4 Lotus Halal
62 million Halal Equity Fund
New
New
5 Oando Plc
215.6 million ordinary shares
Conversion
Supplementary
6 Champion Breweries Plc
6.3 billion ordinary shares
Rights Issue
Supplementary

2.6.4
Market Capitalization
Aggregate market capitalization for all listed securities
(Equities and Bonds) stood at N16.9 trillion at the end of the
quarter under review, indicating a decline of 10.9 per cent
below the N18.9 trillion recorded in the preceding quarter.
Total market
capitalization and
All-Share Index
declined during Q4
2014.


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

Economic Report Fourth Quarter

Similarly, market capitalization for the listed equities fell by 15.6
per cent to N11.5 trillion at the end of the review quarter,
compared with the N13.6 trillion recorded in the preceding
quarter. Listed equities accounted for 68.1 per cent of the
aggregate market capitalization.
2.6.5 NSE All-Share Index
The All-Share Index, which opened at 41,210.10 at the
beginning of the quarter, closed at 34,657.15 representing a
decline of 15.9 per cent below the level at the end of previous
quarter. At end-December 2014, the NSE Insurance and the
NSE AseM indices rose by 0.3 and 27.6 per cent respectively,
above their levels in the preceding quarter to 149.65 and
1,213.36, while the other five sectoral indices closed below
their levels in the preceding quarter. The NSE Banking, NSE
Consumer goods, NSE Oil/Gas, NSE Lotus Islamic and NSE
Industrial indices fell by 17.3, 12.5, 17.5, 17.7 and 21.8 per cent,
to close at 351.40, 903.54, 380.11, 2,43.89 and 2,139.55,
respectively, at the end of the review period.
Figure 5: Market Capitalization and All-Share Index


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


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

Economic Report Fourth Quarter

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

All-Share Index (Equities)
28,078.80

33,536.25

36,164.31

36,585.08

41,329.19

38,748.01

42,482.48

41,210.10

34,657.15

3.0
Fiscal Operations
3.1
Federation Account Operations
Available data showed that total federally-collected revenue
during the fourth quarter of 2014 stood at N2,299.18 billion,
reflecting a decline of 17.4 and 15.4 per cent, when
compared with the levels in the preceding quarter and the
proportionate quarterly budget estimate, respectively. The
development relative to the budget estimate was attributed
to the decline in oil revenue (Fig. 6, Table 6).
Figure 6: Components of Gross Federally Collected Revenue

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

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

Oil Revenue

Non-Oil Revenue


At N1,466.22 billion, gross oil receipts, which constituted 63.8
per cent of the total, fell by 14.9 per cent below the receipts in
Gross federally -
collected
revenue
declined by 17.4
per cent below
the level in the
third quarter of
2014.


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

Economic Report Fourth Quarter

the preceding quarter. It also fell below the proportionate
budget estimate by 18.1 per cent. The development relative
to the budget estimate was attributed, largely, to the fall in
crude oil and gas exports during the review quarter (Fig. 7,
Table 7).

Figure 7: Gross Oil Revenue and Its Components
-


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

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


Non-oil receipts (gross), at N832.95 billion (36.2 per cent of the
total), was below the proportionate budget estimate by 10.2
per cent. It also fell below the level in the third quarter of 2014
by 21.4 per cent. The fall in non-oil revenue relative to the
proportionate budget estimate was due, largely, to the
decline in corporate tax during the review quarter. (Fig. 8,
Table8).
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Oil Revenue

Crude oil/Gas Sales

PPT/Royalties

Others


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

Economic Report Fourth Quarter

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

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

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

Value-Added Tax (VAT)

Companies Income Tax & Other Taxes

Customs & Excise Duties

Others/1

1/ Include FGN Independent Revenue, Education Tax, NITDF & Customs Federation/Non-Federation
Account Levies (Port, Sugar, ETLS, Steel, CISS & Cement Levies)
Of the gross federally-collected revenue during the review
quarter, the sum of N1,342.81 billion (net deductions and
transfers) was transferred to the Federation Account for
distribution among the three tiers of government and the
13.0% Derivation Fund. The Federal Government received
N638.38 billion, while the state and local governments
received N323.79 billion and N249.63 billion, respectively. The
balance of N131.0 billion went to the 13.0% Derivation Fund for
distribution among the oil-producing states. Also, the Federal
Government received N27.77 billion from the VAT Pool
Account, while the state and local governments received
N92.58 billion and N64.81 billion, respectively.
Furthermore, the sum of N2.77 billion, being distribution from
Excess crude, was shared among the three tiers of
governments as follows: Federal Government (N1.27 billion),
State Governments (N0.64 billion), and local government
(N0.50 billion) and 13% Derivation Fund (N0.36 billion).
The
sum
of
N1,342.81 billion
out of the gross
federally collected
revenue
was
distributed among
the three tiers of
government
and
13.0% Derivation
Fund
for
oil
producing states.


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

Economic Report Fourth Quarter

The sum of N106.65 billion was also distributed as Subsidy ReInvestment and Empowerment Programme (SURE-P) among
the three tiers of government and the 13% Derivation Fund as
follows:
Federal
Government
(N48.88
billion),
State
Governments (N24.79 billion), Local Governments (N19.11
billion) and 13% Derivation Fund (N13.86 billion).
Thus, the total allocation to the three tiers of government in
the fourth quarter of 2014 amounted to N1,748.11 billion,
compared with N1,982.20 billion in the preceding quarter and
the proportionate quarterly budget estimate of N2,095.20
billion.
3.2
The Fiscal Operations of the Three Tiers of
Government

3.2.1
The Federal Government

At N928.14 billion, the Federal Government retained revenue
for the fourth quarter of 2014 was lower than the provisional
budget estimate and the receipt in the preceeding quarter
by 13.0 and 9.3 per cent, respectively. Of this amount, the
Federal Government’s share from the Federation Account,
Sure-P, VAT, FGN Independent Revenue and “Others” were
N638.38 billion, N48.88 billion, N27.77 billion, N150.81 and
N21.80 billion, respectively (Fig. 9, Table 9).
Figure 9: Federal Government Retained Revenue
Federation Account (68.8 %)
VAT Pool
Account (3.0%)
Others(6.7 %)
FGN Independent
Revenue (16.2%)
Sure-P (5.3%)


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


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

Economic Report Fourth Quarter

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

Expenditure

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


Total estimated expenditure for the fourth quarter of 2014
stood at N1,149.94 billion, indicating decline of 12.1 and 1.4
per cent, below the quarterly budget estimate and the level in
the preceding quarter, respectively. The development relative
to
the
proportionate
quarterly
budget
estimate
was
attributed, mainly, to the fall in the capital component during
the period. A breakdown of the total expenditure showed that
the recurrent component accounted for 78.9 per cent, while
capital and statutory transfers segment accounted for 16.7
and 4.4 per cent, repectively (Fig. 10). A further breakdown of
the
recurrent expenditure
showed that the
non-debt
component accounted for 72.6 per cent, while debt service
payments accounted for the balance of 27.4 per cent.
Thus, the fiscal operations of the Federal Government resulted
in an estimated deficit of N221.80 billion, compared with the
provisional quarterly budget deficit of N241.05.

Figure10: Federal Government Expenditure
Recurrent
Capital
Transfers
Capital
(16.7%
)
Transfers
(4.4%)
Recurrent
(78.9%)

Fiscal
operations
of
the FG resulted
in an estimated
deficit
of
N221.80 billion
in Q4 2014.


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

Economic Report Fourth Quarter

3.2.2
Statutory Allocations to State Governments

Total
allocation
to
state
governments
(including
the
Federation Account, 13.0% Derivation Fund and VAT) stood at
N620.29 billion during the review quarter. This was lower than
the level in the preceding quarter and the corresponding
quarter of 2013 by 10.7 and 14.9 per cent, respectively. Further
breakdown showed that receipts from the Federation
Account was N527.71 billion (85.1 per cent), while VAT
contributed N92.58 billion (14.9 per cent). The share of
Federation Account was 12.3 and 15.2 per cent lower than
the level in the preceeding quarter and the corresponding
quarter of 2013, respectively. Receipts from the VAT Pool
Account fell below the level in the preceding quarter and the
proportionate quarterly budget estimate by 0.4 and 8.5 per
cent, respectively.

3.2.3
Statutory Allocations to Local Government Councils

Total receipts by the local governments from the Federation
and VAT Pool Accounts during the fourth quarter of 2014,
stood at N349.99 billion. This was below the level in the
preceding and the corresponding quarters of 2013 by 12.1
and 13.5 per cent, respectively. Of the total amount,
allocation from the Federation Account was N285.19 billion
(81.5 per cent), while VAT Pool Account accounted for the
balance of N64.81 billion (18.5 per cent).


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

Economic Report Fourth Quarter

Domestic Economic Conditions
The dominant activities in the Agricultural subsector, in the fourth
quarter of 2014, were harvesting of tubers, fruits and vegetables and
preplanting operations. In the livestock sub-sector, farmers were
engaged in fattening of stocks in anticipation of the end of year
sales. Crude oil production was estimated at 1.99 million barrels per
day (mbd) or 183.08 million barrels for the quarter. The end-period
inflation rate for the fourth quarter of 2014, on year-on-year basis,
was 8.0 per cent, compared with 8.3 and 8.0 per cent at the end of
the preceding quarter and the corresponding quarter of 2013,
respectively. The inflation rate on a 12-month moving average basis
remained at 8.0 per cent, same as in the preceding quarter, but was
0.5 percentage point lower than the level in the corresponding
quarter of 2013.
4.1
Agricultural Sector
Available data indicated that agricultural activities were
centered on harvesting of tubers, fruits and vegetables as well
as pre-planting operations in preparation for dry season
planting. In the livestock sub-sector, farmers were engaged in
fattening of stocks in anticipation of the end of year sales.
However, vast areas in the North-Eastern part of the country
were undercultivated due to insecurity that displaced most of
the farmers in the area.
A total of N3,658.9 million was guaranteed to 19,291 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the fourth quarter of 2014. This amount represented an
increase of 7.3 and 25.6 per cent above the levels in the
preceding quarter and the corresponding period of 2013,
respectively. A sub-sectoral analysis showed that food crops
obtained the largest share of N1,516.1 million (41.4 per cent)
guaranteed to 10,765 beneficiaries. This was followed by
livestock, N806.9 million (22.1 per cent) guaranteed to 2,553
beneficiaries, mixed crops had N741.3 million (20.3 per cent)
guaranteed to 3,394 beneficiaries, while ‘Others’ received
N274.7 million (7.5 per cent) guaranteed to 887 beneficiaries.
About N211.2 million (5.8 per cent) was guaranteed to 887
beneficiaries in the Cash Crop sub-sector, while Fisheries subsector received N108.7 million (2.9 per cent) guaranteed to
399 beneficiaries.


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

Economic Report Fourth Quarter

Analysis by state showed that all the 36 states including the
Federal Capital Territory benefited from the Scheme in the
fourth quarter of 2014, with the highest and lowest sums of
N666.1 million (18.2 per cent) and N1.3 million (0.04 per cent)
guaranteed to Delta and Niger states, respectively.
At end-December 2014, the total amount released by the
CBN under the Commercial Agriculture Credit Scheme
(CACS) to the participating banks for disbursement stood at
N262.8 billion for 343 (three hundred and forty three) projects
(Table 10).


4.2
Industrial Production
Industrial activities rose marginally during the fourth quarter of
2014 relative to the level in the preceding quarter. At 139.45
(1990=100), the estimated index of industrial production rose
marginally by 0.3 and 0.2 per cent above the levels in the
preceding quarter and the corresponding quarter of 2013,
respectively. The improved performance was attributed to a
marginal rise in industrial activities in all the sub-sectors.
Industrial activities
rose in the review
quarter due to
marginal increase
in activities in all
the sub-sector.
Table 10: Disbursement of Credit Under the Commercial Agriculture Credit Scheme (CACS)
S/N
Participating Banks
Amt Disbursed (N billion)
Number of Projects/State Governments

United Bank for Africa (UBA) Plc
43.8

Zenith Bank
44.3

First Bank of Nigeria Plc
32.7

Unity Bank Plc
23.9

Union Bank Nigeria PLC
18.2

Stanbic IBTC Bank
17.2

Sterling Bank Plc
15.6

Access Bank Plc
12.6

Fidelity Bank Plc
10.9

Skye Bank Plc
9.7

GTBank Plc
5.8

FCMB Plc.
6.1

ECOBANK
6.4

Heritage Bank Plc
3.2

Diamond Baqnk Plc
3.7

Citibank Plc
3.0

Keystone Bank
2.1

Mainstreet Bank

Wema Bank
1.1

Enterprise Bank
0.5

TOTAL
262.8

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

Economic Report Fourth Quarter

The estimated index of manufacturing production, at 108.98
(1990=100), rose by 0.5 per cent, compared with the level in
the preceding quarter. However, it declined by 2.0 per cent
relative to the level in the corresponding period of 2013.
Estimated capacity utilization, at 60.3 per cent, rose by 0.4
percentage point above the level in the preceding quarter.
The
development
was
attributed
to
the
increase
in
manufacturing activities occasioned by increased investment
in the pharmaceutical, food, beverages and auto-mobile subsectors. (Fig.11).
Figure 11: Manufacturing Capacity Utilization Rate

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

At 147.59 (1990=100), the index of mining production rose by
0.1 and 0.6 per cent relative to the levels attained in the
preceding quarter and the corresponding period of 2013,
respectively. The increase in mining production during the
review quarter, was accounted for by the increase in crude oil
and gas production.
At 3,150 MW/h, estimated average electricity generation rose
by 8.6 per cent, compared with the level attained in the third
quarter of 2014. The development was attributed to the
improvement in power generation across the country.
At 3,012 MW/h, estimated average electricity consumption
increased by 5.0 per cent, compared with the level attained
Actual industrial
capacity utilization
rose by 0.4
percentage point
during the review
quarter.
Average
electricity
generation and
consumption
both rose during
the review
quarter.


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

Economic Report Fourth Quarter

in the third quarter of 2014. The rise in electricity consumption
was attributed to the low power outages as a result of
improvement in power generation (Fig. 12, Table 11).
Figure 12: Index of Industrial Production (1990=100)

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

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

Manufacturing

Mining
147.12
146.19
146.25


Capacity Utilization (%)


4.3
Petroleum Sector
Nigeria’s crude oil production, including condensates and
natural gas liquids, averaged 1.99 mbd or 183.08 million barrels
(mb) in the review quarter. This represented an increase of
0.01 mbd (0.5 per cent), compared with the 1.98 mbd or
182.16 million barrels produced in the preceding quarter.
Crude oil export was estimated at 1.54 mbd or (141.68 million
barrels), representing an increase of 0.7 per cent, compared
with 1.53 mbd or 140.76 million barrels (mb) recorded in the
preceding quarter. The development was attributed to
improved surveillance around oil installations which curtailed
the incessant oil theft, illegal bunkering and production cuts
Crude oil and natural
gas production
increased in the
fourth quarter 2014.
Crude oil export
rose in Q4 2014.


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

Economic Report Fourth Quarter

experienced in the early part of the year. Allocation of crude
oil for domestic consumption was 0.45 mbd or 41.4 million
barrels during the review period.
At an estimated average of US$77.74 per barrel, the price of
Nigeria’s reference crude, the Bonny Light (37o API), fell by
24.6 per cent below the level in the third quarter of 2014. The
average prices of other competing crudes, namely the U.K
Brent, the West Texas Intermediate and the Forcados also fell
to US$76.80, US$73.21 and US$77.99 per barrel, compared with
US$101.77, US$96.38 and US$103.49 per barrel, respectively, in
the preceding quarter. At US$73.49 per barrel, the average
price of OPEC’s basket of eleven crude streams fell by 27.1
and 31.7 per cent, below the average of US$100.86 and
US$107.67/b recorded in the preceding quarter and the
corresponding period of 2013, respectively. Increased supply
of shale oil from North America which outweighed demand
has continued to exert downward pressure in crude oil prices.
Also, slow pace of economic activities in China and Russia as
well as a strong US dollar further contributed to the downturn
in crude oil prices (Fig. 13, Table 12).
Figure13: Trends in Crude Oil Prices

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


Average crude
oil prices,
including
Nigeria’s Bony
Light (37o API)
fell in the
international
crude oil
market in Q4
2014.


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

Economic Report Fourth Quarter

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

OPEC Basket


4.4
Consumer Prices3
Available
data
showed
that
the
all-items
composite
Consumer Price Index (CPI) at the end of the third quarter of
2014 was 164.4 (November 2009=100), representing an
increase of 1.9 and 7.9 per cent over the levels in the
preceding
and
the
corresponding
quarters
of
2013,
respectively. The development relative to the previous quarter
was driven largely by increase in the relative contributions of
food and non-alcoholic beverages.
The urban all-items CPI at the end of the fourth quarter of 2014
was 163.4 (November 2009=100), indicating an increase of 1.9
and 7.9 per cent over the levels in the preceding quarter and
the corresponding period of 2013, respectively. Similarly, the
rural all-items CPI, at 165.5 (November 2009=100), represented
an increase of 1.9 and 7.9 per cent over the levels in the
preceding quarter and the corresponding period of 2013,
respectively (Fig. 14, Table 13).

3 New CPI with November 2009 = 100 as base and new weight based on the 2003/2004 Nigeria
Living Standard Survey (NLSS) was released by the National Bureau of Statistics (NBS) ON 18TH
October 2010.
The general price
level rose in Q4 2014
on account of the
increase in the prices
of food items and
non-alcoholic
beverages.


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

Economic Report Fourth Quarter

Figure14: Consumer Price Index

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

Table 13: Consumer Price Index (November 2009=100)
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Composite
141.1


Urban


Rural
142.1
145.3
147.9


The inflation rate for the fourth quarter of 2014, on a year-onyear basis, stood at 8.0 per cent, compared with 8.3 per cent
in the third quarter of 2013. This indicated 0.3 percentage
point decline below the level in the preceding quarter. The
inflation rate on a twelve-month moving average basis
remained at 8.0 per cent, the same as in the third quarter (Fig.
15, Table 14).
The headline
inflation (y-oy) stood at 8.0
per cent in Q4
2014.


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

Economic Report Fourth Quarter

Figure 15: Inflation Rate

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


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

Year-on-Year


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

Economic Report Fourth Quarter

5.0
External Sector Developments
Provisional data indicated that foreign exchange inflow through the
CBN in the fourth quarter of 2014 declined by 20.9 per cent below
the level in the preceding quarter, but rose by 9.4 per cent above
the level in the corresponding quarter of 2013. Outflow through the
Bank, however, rose by 20.4 and 31.7 per cent above the levels in
the preceding quarter and the corresponding quarter of 2013,
respectively. Total non-oil export receipts fell by 40.1 per cent below
the level in the preceding quarter, but was 66.6 per cent above the
level in the the corresponding quarter of 2013. Relative to the
preceding quarter, the average naira exchange rate at the rDAS visà-vis the US dollar, depreciated by 3.1 per cent to N162.33 per dollar.
At the BDC segment of the market, the average naira exchange
rate, at N178.24 vis-à-vis the dollar also depreciated by 5.2 per cent,
relative to the level in the preceding quarter. Similarly, at the interbank segment, the average naira exchange rate, relative to the
preceding quarter, depreciated to N172.16 per dollar. The gross
external reserves fell by 10.5 per cent to US$34.25 billion, compared
with its level at the end of the preceding quarter.
5.1
Foreign Exchange Flows
Provisional data indicated that foreign exchange inflow
through the CBN in the fourth quarter of 2014 amounted to
US$10.36 billion, representing a decline of 20.9 per cent below
the level in the preceding quarter, but was an increase of 9.4
per cent above the level in the corresponding quarter of 2013.
The development was due to the fall in both its oil and non-oil
components.
Foreign
exchange
outflow
amounted
to
US$14.21 billion, showing an increase of 20.4 and 31.7 per cent
above the levels in the preceding quarter and the
corresponding quarter of 2013, respectively. The higher
outflow, relative to the preceding quarter, was attributed,
largely, to the increase in rDAS utilization and other official
payments. The development resulted in a net outflow of
US$3.85 billion, compared with the net outflow of US$1.32
billion in the corresponding quarter of 2013, but was in
contrast to the net inflow of US$1.29 billion recorded in the
preceding quarter (Fig.16, Table 15).


Foreign exchange
inflow through
the CBN declined
by 20.9 per cent,
while outflow
rose by 20.4 per
cent, resulting in
a net outflow of
US$3.85 billion in
Q4 of 2014.


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Economic Report Fourth Quarter

Figure 16: Foreign Exchange Flows Through the CBN


Table 15: Foreign Exchange Flows Through the CBN (US$ million)
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Inflow
11,168.38

10,304.46

9,442.91

11,857.35

9,465.52

10,221.43

12,667.31

13,094.23

10,359.39

Outflow
7,817.12

6,313.04

12,542.53

12,667.33

10,789.61

15,695.66

12,806.25

11,804.98

14,211.63

Netflow
3,351.26

3,991.42

(3,099.62)

(809.98)

(1,324.09)

(5,474.23)

(138.94)

1,289.25

(3,852.24)


Provisonal data on aggregate foreign exchange flows
through the economy indicated that total inflow amounted to
US$36.15 billion, representing a decline of 18.3 per cent below
the level in the preceding quarter but an increase of 2.8 per
cent above the level in the corresponding quarter of 2013. The
development was attributed, largely, to the decline in receipts
from crude oil sales and inflow through autonomous sources.
Oil sector receipts, which accounted for 21.5 per cent of the
total, stood at US$7.77 billion, compared with the US$9.95
billion and US$8.49 billion recorded in the preceding quarter
and the corresponding quarter of 2013, respectively.
Non-oil public sector inflow, at US$2.59 billion (7.2 per cent of
the total), fell by 17.5 per cent below the level in the
preceding quarter, but indicated an increase of 165.4 per
cent above the level in the corresponding quarter of 2013.
Autonomous inflow, which accounted for 71.3 per cent of the
total, fell by 17.3 per cent below the level in the preceding
quarter.
Autonomous inflows
into the economy fell
by 17.3 per cent in
Q4 2014 .
-10,000
-5,000


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


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Economic Report Fourth Quarter

At US$14.50 billion, aggregate foreign exchange outflow from
the economy rose by 17.7 and 29.3 per cent above the levels
in the preceding quarter and the corresponding quarter of
2013, respectively. The increase, relative to the preceding
quarter, was accounted for, mainly, by rise in rDAS utilization
and other official payments, especially NNPC/JVC cash calls.
Overall, a net inflow of US$21.64 billion was recorded in the
fourth quarter of 2014, compared with US$31.93 billion and
US$23.95
billion
in
the
preceding
quarter
and
the
corresponding quarter of 2013, respectively.
5.2
Non-Oil Export Earnings by Exporters
Total non-oil export earnings by Nigerian exporters during the
fourth quarter of 2014 stood at US$2.57 billion, indicating a
decline of 40.1 per cent below the level in the preceding
month, but was an increase of 66.6 per cent above the level
in the corresponding quarter of 2013. The development,
relative to the preceding quarter was attributed, mainly, to
the significant fall in receipts from agricultural sector. A
breakdown of the proceeds showed that agricultural
products, manufactured products, industrial sector, minerals,
and food products earned US$0.92 billion, US$0.86 billion,
US$0.74 billion, US$0.03 billion, and US$0.02 billion, respectively.
The shares of agricultural products, manufactured products,
industrial sector, minerals and food products in non-oil export
proceeds were 35.8, 33.6, 28.7, 1.1 and 0.8 per cent,
respectively.
5.3
Sectoral Utilisation of Foreign Exchange

Available data indicated that the invisible sector accounted
for the bulk (48.2 per cent) of total foreign exchange
disbursed in the fourth quarter of 2014, followed by industrial
sector (17.6 per cent). Other beneficiary sectors, in a
descending order included: mineral and oil sector (16.0 per
cent), manufactured products (7.9 per cent), food products
(7.1 per cent), transport sector (2.4 per cent) and agricultural
products (0.8 per cent) (Fig.17).
.
The invisible
sector accounted
for the bulk of
the total foreign
exchange
disbursed during
Q4 2014.
Total non-oil
export earnings
by exporters fell
during the
fourth quarter
of 2014.


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Economic Report Fourth Quarter

Figure17: Sectoral Utilisation of Foreign Exchange


Percent of Total
Q2-14
Q3-14
Q4-14

5.4
Foreign Exchange Market Developments
Foreign exchange demand by the authorized dealers in the
review quarter was estimated at US$14.86 billion, indicating
increase of 34.2 and 23.9 per cent above the levels in the
preceding quarter and the corresponding quarter of 2013,
respectively. The development, relative to the preceding
quarter
was
attributed,
largely,
to
arbitrage
activities
occasioned by the falling price of crude oil especially towards
the end of the review quarter. The sum of US$12.46 billion was
sold by the CBN during the review quarter, indicating increase
of 22.6 and 36.9 per cent above the levels in the preceding
quarter and the corresponding quarter of 2013, respectively
(Fig. 18, Table 16).
Figure 18: Demand for and Supply of Foreign Exchange

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


Demand and supply
of foreign exchange
by authorized dealers
rose during Q4 2014.


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

Forex Demand at RDAS

Supply of Forex to BDC

Total Forex Supply(BDC and RDAS)


Under the rDAS, the average exchange rate of the naira vis-àvis the US dollar, at N162.33 per US dollar, depreciated by 3.1
per cent a piece below the levels in the preceding quarter
and the corresponding quarter of 2013. At the bureau-dechange segment of the market, the naira traded at an
average of N178.24 per US dollar, indicating a depreciation of
5.2 and 5.8 per cent relative to the levels in the preceeding
quarter and the corresponding quarter of 2013, respectively.
Similarly, at the inter-bank segment, the naira exchanged at
an average of N172.16 to the US dollar, indicating a
depreciation of 5.7 and 7.5 per cent relative to the levels in
the preceding quarter and the corresponding quarter of 2013,
respectively (Fig. 19, Table 17).
The premium between the rDAS and the bureau-de-change
rates widened to 9.8 per cent in the fourth quarter of 2014
from 7.4 per cent in the preceding quarter. Simialrly, the
premium between the rDAS and inter-bank widened to 6.1 per
cent from 3.2 per cent in the preceding quarter (Fig. 20, Table
17).
The average naira
exchange rate visà-vis the US dollar
depreciated in all
the segments of
the foreign
exchange market
in Q4 2014.
The premium
between the
rDAS and the BDC
rates, and
between rDAS
and the interbank
widened in the
review quarter.


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Economic Report Fourth Quarter

Figure 19: Average Exchange Rate Movements

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


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

BDC

Interbank

Premium (%)
rDAS/BDC

RDAS/Interbank


Figure 20: Exchange Rate Premium

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


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5.5
Gross External Reserves
Gross external reserves at the end of the fourth quarter of 2014
stood at US$34.25 billion, indicating a decline of 10.5 per cent,
from the level recorded at the end of the third quarter of 2014.
The development was attributed, mainly, to increased funding
of the rDAS utilization and intervention at the inter-bank
market to stabilize the naira exchange rate. A breakdown of
the reserves showed that CBN reserves stood at US$27.79
billion (81.1 per cent), Federation reserves, US$3.32 billion (9.7
per cent) and the Federal Government reserves, US$3.14
billion (9.2 per cent) (Fig. 21, Table 18).
Figure 21: Gross External Reserves


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


Table 18: Gross External Reserves (US$ million)
Q4-12
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
External Reserves
43,830.4

47,884.1

44,957.0

44,108.5

42,847.3

37,376.4

37,330.0

38,278.6

34,246.4


Gross external
reserves fell
during the
fourth quarter
2014.


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Economic Report Fourth Quarter

6.0 Global Economic Conditions
6.1 Global Output
The World Bank in its “Global Economic Prospects” noted that
the global recovery had been weaker than anticipated,
partly due to lower than expected growth outturns in the euro
area, Japan, Emerging Europe (Russia) and Latin America. In
particular, lower growth prospects in the Euro area and Japan
accounted for more than half of the downward revisons to
global growth in 2014, as global growth moderated to 2.6 per
cent in 2014, compared with 2.6 per cent in 2013.
Growth in the middle and low income countries fell to 4.4 per
cent in 2014, attributed, largely, to cyclical factors, domestic
policy tightening, structural factors, (including a trend slow
down in productivity) and political tensions which dampened
growth prospects over the medium-term. Growth in the East
Asia and Pacific region slipped to 6.9 per cent in 2014, while
China, though still at a robust pace, slowed to 7.4 per cent
due to structural reforms and continued prudential measures.
In Europe, growth is estimated to have slowed to a lower-thanexpected 2.4 per cent in 2014 due to the slow recovery in the
euro area, severe slowdown in Russia and economic downturn in Ukraine.
In the Middle East and North Africa, growth remained fragile
and uneven following years of turmoil. Growth in oil importing
economies was broadly flat, while activity in oil-exporting
countries recovered slightly. Growth in Sub-Saharan Africa,
improved to 4.5 per cent for the second consecutive year,
despite strong headwinds from declines in commodity price
and the Ebola epidemic in West Africa. Growth in the region
was strengthened on the back of rising public investment,
robust capital inflows and solid harvests.
6.2 Global Inflation
Global inflation eased, reflecting economic slowdown and
declining crude oil prices. Inflation in advanced economies
remained low, indicating the existence of output gaps and
deflation concerns. In the United states, Inflation, measured
with the personal consumption expenditure deflator, was
estimated at 1.6 per cent in 2014. In the United Kingdom,


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Economic Report Fourth Quarter

inflation measured by its consumer price index, declined to 1.0
per cent in November from 1.3 per cent in October, 2014.
euro-area inflation was estimated at 1.0 per cent. Provisonal
estimates from Eurostat indicated that Euro zone annual
inflation was expected to reach negative 0.2 per cent at the
end of 2014. In Japan, headline inflation rose by 2.4 per cent
in November and was projected to increase to an annual
average of 2.7 per cent in 2014, due to the increase in
consumption tax and underlying price increases.
In Ghana, annual inflation rate rose to a four year high of 17.0
per cent in November above 16.9 per cent in October, driven
by housing, gas and electricity prices. The deceleration in
global inflation reflected to a large extent, the decline in
commodity prices. There are expectations that global inflation
will remain subdued as persistent output gaps, weak credit
conditions and financial fragmentation combine to contain
price pressures.
6.3 Global Commodity Demand and Prices
World crude oil demand was estimated at 92.69 mbd in the
fourth quarter of 2014, representing an increase of 1.0 per cent
above the 91.7 per cent recorded in the third quarter of 2014.
World crude oil supply was estimated at an average of 93.23
mbd, representing an increase of 0.9 per cent above the level
recorded in the preceding quarter.
The OPEC Reference Basket price of eleven selected crude
streams stood at US$73.49 per barrel in the fourth quarter of
2014, compared with US$100.86/b and US$107.67/b recorded
in the preceding quarter and the corresponding quarter of
2013, respectively. Increased supply, particularly from North
America, which has remained significantly higher than
demand, has continued to exert downward pressure on crude
oil prices.
The prices of the UK Brent, the West Texas Intermediate and
the Forcados, also declined to close at US$76.80, US$73.21 and
US$77.99 per barrel, respectively.
6.4
International Financial Markets
Developments across global financial markets were mixed
during the fourth quarter of 2014 as reflected in the major


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Economic Report Fourth Quarter

indices. In North America, the S&P 500 index increased by 4.4
per cent, while the Mexican Bolsa and S&P/TSX Composite
Indices declined by 4.1 and 2.2 per cent, respectively. In South
America, the Brazilian Bovespa, Argentine Merval indices and
Columbian IGBC general indices fell by 7.6, 26.7 and 9.2 per
cent, respectively.
European stocks declined in the midst of weak economic
growth,
increasing
deflationary
pressures
and
a
fast
depreciating euro. In Europe, the German DAX index rose by
3.5 per cent, while the UK’s FTSE 100, France’s CAC 40, and
Russia’s MICEX indices declined by 0.9, 3.2 and 1.0 per cent,
respectively.
In Asia, India’s BSE Sensex, Japan’s Nikkei 225 and China’s
Shanghai Stock Exchange-A indices increased by 3.3, 7.9 and
37.0 per cent, respectively.
In Africa, the Kenyan Nairobi NSE 20, Egyptian EGX CSE 30 and
the Nigerian All Share Indices declined by 2.7, 9.0 and 15.9 per
cent, respectively, while the South African JSE AS and
Ghanaian GSE All-Share indices increased by 0.9 and 1.0 per
cent, respectively. In Nigeria, the equities market was weighed
down by several factors including unimpressive companies’
earnings performance, observed increase in capital outflows,
steady decline in international crude oil prices as well as
uncertainty related to the forthcoming 2015 general elections.
During the fourth quarter of 2014, almost all currencies under
review depreciated against the US Dollar. In North America,
the Canadian Dollar and Mexican Peso depreciated against
the US Dollar by 3.45 and 8.95 per cent, respectively. In South
America, the Brazilian Real, Argentine Peso and Colombian
Peso depreciated against the US Dollar by 7.89, 0.47, and
14.80 per cent, respectively. In Europe, the British Pound, Euro
and Russian Ruble depreciated against the US Dollar by 3.13,
4.82 and 34.80 per cent, respectively.
In Asia, the Japanese Yen, Chinese Yuan and Indian Rupee
depreciated against the US Dollar by 8.46, 1.13 and 2.03 per
cent, respectively. In Africa, the Ghanaian Cedi appreciated
against the US Dollar by 2.48 per cent, while the Nigerian
naira, South Africn Rand, Kenyan Shilling and Egyptian Pound


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Economic Report Fourth Quarter

depreciated against the US Dollar by 3.1, 2.42, 1.38 and 0.1
per cent, respectively.

6.5 Other International Economic Developments
and Meetings
Other major international economic developments and
meetings of importance to the domestic economy during the
review quarter included: the 2014 Annual Meetings of the
Board of Governors of the World Bank Group and the
International Monetary Fund (IMF), held in Washington D.C.,
USA between October 6 and 13, 2014. During the meeting, the
G-24 ministers noted that although the global economic
recovery continued to be tepid and uneven, emerging
market and developing countries (EMDC) fundamentals were
generally strong and were expected to continue to account
for the bulk of global growth.
Also, the African Development Bank Group’s (AfDB) Board of
Executive Directors approved a new Regional Integration
Policy and Strategy (RIPoS) for the period 2014 - 2023 on
Wednesday, November 19, 2014. The new RIPoS replaces the
previous Regional Integration Strategy (RIS) and is focused on
creating larger and more attractive markets and linking
landlocked countries to international markets as well as
supporting intra-African trade to foster the continent’s
development.
In a related development, the AfDB and the Alliance for a
Green Revolution in Africa (AGRA), Kenya signed a grant
agreement to support the growth and formalization of 54
African seed companies in eleven countries on November 14,
2014, in Nairobi, Kenya. The Fund for African Private Sector
Assistance (FAPA) managed by the Bank provided US$1.00
million to fund a technical assistance project in the form of
Business Development Services for the 54 seed companies.
A high level strategy meeting was held on Thursday, October
9, 2014 in Washington D.C., USA between the AfDB and the
IMF Managing Director Christine Lagarde, UN Secretary
General Ban Ki-moon and World Bank President Jim Yong Kim,
on efforts at combating the Ebola scourge. At the meeting,


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the AfDB noted that it had already contributed more than
$200 million to support the fight against the spread of EVD and
it assured the meeting that it will play its part to arrest the
spread of the disease.
Finally, the Bureau Meeting of the Association of African
Central Banks (AACB) was held on December 4, 2014 at the
Bank of Mauritius Tower, Port Louis, Mauritius. The Meeting was
convened to discuss pending issues following the deferment
of the 2014 Annual Meetings (Bureau Meeting, Ordinary
meeting of the Assembly of Governors’ Symposium) as a result
of the out-break of Ebola virus.


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APPENDIX TABLES


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Economic Report Fourth Quarter

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

Economic Report Fourth Quarter

Table A1: Money and Credit Aggregates

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

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


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

Claims on Federal Government (Net)

Central Bank (Net)

Banks

Claims on Private Sector

Central Bank

Banks

Claims on Other Private Sector

Central Bank

Banks

Claims on State and Local Government

Central Bank

DMBs

Claims on Non-financial Public Enterprises

Central Bank

DMBs and Non Interest Banks

Foreign Assets (Net)

Central Bank

DMBs and Non Interest Banks

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

Banks' Deposit with CBN

N billion


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

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector

Claims on State and Local Government

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

Other Assets (Net)

Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Domestic Credit (Net)

Claims on Federal Government (Net)

Claims on Private Sector

Claims on Other Private Sector


Claims on State and Local Governments

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

Other Asset (Net)
-22.23
-19.92
-7.89

6.29
11.33
Total Monetary Assets (M2)

Quasi-Money 1/

Money Supply (M1)

Currency Outside Banks

Demand Deposits 2/

Total Monetary Liabilities (M2)

Memorandum Items:
Reserve Money (RM)

Currency in Circulation (CIC)

DMBs Demand Deposit with CBN

Percentage Change Over Preceding Quarter
Percentage Change Over Preceding December

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


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

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Crude

Others/SURE-P

Expenditure

Recurrent

Capital

Transfers

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


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