ECONOMIC REPORT
FOURTH QUARTER 2011


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
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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

Contents


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Economic Report Fourth Quarter


Text Tables


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Appendix Tables

Figures


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Economic Report Fourth Quarter

1.0 Summary
Provisional data from the National Bureau of Statistics (NBS) showed
that gross domestic product (GDP) grew by 7.7 per cent, compared
with 7.4 per cent in the preceding quarter. The development was
attributed, largely, to the increase in the contribution of the industry
and non-oil sectors.
Broad money supply, (M2), grew by 5.4 per cent at end-December
2011 relative to the level at end-September 2011. The development
reflected the 24.3 and 7.7 per cent rise in domestic credit (net) and
foreign assets (net) of the banking system, respectively, which more
than offset the 55.0 per cent fall in other assets (net) of the banking
system. Narrow money supply, (M1), also rose by 12.7 per cent,
compared with the increase of 6.4 per cent at the end of the
preceding quarter of 2011. Reserve money (RM) increased by 34.8
per cent over the level at the end of the preceding quarter, and
was 50.8 per cent above the indicative benchmark for the fourth of
2011.
Available data indicated an upward trend in banks’ interest rates.
The spread between the weighted average term deposit and
maximum lending rates narrowed to 17.48 from 17.71 per cent in the
preceding quarter. The margin between the average savings
deposit and maximum lending rates, however, widened from 20.77
per cent in the preceding quarter to 21.80 per cent. The weighted
average interbank call rate, which stood at 8.72 per cent in the
preceding quarter, rose to 15.64 per cent, reflecting the liquidity
condition in the interbank funds market.
The value of money market assets outstanding increased by 4.4 per
cent above the level in the preceding quarter to N5,408.6 billion. The
development was attributed to the 5.3 and 4.4 per cent increase in
FGN Bonds and NTBs outstanding, respectively. Activities on the
Nigerian Stock Exchange (NSE) in the fourth Quarter 2011 were
mixed.
Total federally-collected revenue in the Fourth quarter of 2011 stood
at N3, 025.10 billion, representing a decline of 9.1 per cent from the
level in the preceding quarter, but an increase of 31.3 and 51.7 per
cent over the budget estimate and receipts in the corresponding
period of 2010, respectively. At N2,408.12 billion, oil receipts, which
constituted 79.6 per cent of the total, exceeded the budget
estimate and the level in the corresponding quarter of 2010 by 41.3
and 66.2 per cent, respectively, but was however, lower than the
level in the preceding quarter by 8.9 per cent. The decline in oil


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Economic Report Fourth Quarter

receipts relative to the preceding quarter was attributed, largely, to
the fall in the receipts from domestic crude oil and gas sales during
the period. Non-oil receipts, at N616.98 billion (20.4 per cent of the
total), was above the budget estimate and the corresponding
quarter of 2010 by 2.7 and 12.6 per cent, respectively, but was
below the level in the preceding quarter by 9.9 per cent per cent.
The decline in non-oil revenue relative to the preceding quarter’s
level largely reflected the decline in corporate taxes and National
Information Technology Development Fund (NITDF) during the
review period.
Federal Government retained revenue for the fourth quarter of 2011
was N587.71 billion, while total expenditure was N952.77 billion. Thus,
the fiscal operations of the Federal Government resulted in an
estimated deficit of N365.06 billion or 3.7 per cent of estimated
nominal GDP for fourth quarter 2011, compared with the deficit of
N161.13 billion and N715.88 billion for the preceding quarter and the
corresponding quarter of 2010, respectively.
Agricultural activities during the quarter under review were
dominated by harvesting of various crops, especially yam, Irish and
sweet potatoes, maize and groundnuts. Farmers continued with the
preparation of land and nurseries for tomatoes, pepper, carrots,
cabbage and other vegetables. In the livestock sub-sector, farmers
engaged in fattening and other management activities in
anticipation of the end of year sales.
Nigeria’s crude oil production, including condensates and natural
gas liquids, was estimated at 2.24 million barrels per day (mbd) or
206.08 million barrels for the quarter. Crude oil export was estimated
at 1.79 mbd or 164.68 million barrels for the quarter, while allocations
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)) estimated at US$112.28 per barrel, fell by
3.1 per cent below the level in the preceding quarter.
The end-period headline inflation rate (year-on-year), for the fourth
quarter of 2011, was 10.3 per cent, same as at the end of the
preceding quarter, but lower than the 11.8 per cent recorded at
end of the corresponding quarter of 2010. Inflation rate on a twelvemonth moving average basis was 10.8 per cent, compared with 11.4
and 13.7 per cent in the preceding quarter and the corresponding
quarter of 2010, respectively.
Foreign exchange inflow and outflow through the Central Bank of
Nigeria (CBN) amounted to US$13.60 billion and US$13.40 billion,
respectively, resulting in a net inflow of US$0.20 billion during the


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Economic Report Fourth Quarter

quarter. Foreign exchange sales by the CBN to authorized dealers
amounted to US$11.57 billion in the fourth quarter of 2011,
compared with US$14.51 billion in the third quarter of 2011.
The average exchange rate of the Naira vis-à-vis the US dollar
depreciated by 1.7 and 3.5 per cent to N155.85 per US dollar and
N150.65 per US dollar in the preceding quarter and corresponding
period of 2010, respectively. In the bureaux-de-change segment of
the market, the naira traded at an average of N161.63 per US dollar,
compared with N161.71 per US dollar in the preceding quarter. In the
interbank segment, the Naira exchanged at an average of N160.29
to the US dollar in the fourth quarter of 2011, compared with N154.32
and N151.65 per US dollar in the previous quarter and the
corresponding quarter of 2010, respectively. Non-oil export earnings
by Nigerian exporters, at US$974.29 million, increased by 177.3 and
43.5 per cent over the levels in the preceding quarter and the
corresponding quarter of 2010, respectively.
Major international economic developments and meetings of
relevance to the domestic economy during the quarter included:
the Sixth Ordinary Session of the ECOWAS Convergence Council of
Ministers of Finance and Governors of Central Banks held in Lome,
Togo, on October 14, 2011. The meeting adopted documents to
guide the process for the creation of a single currency in the region.
Also, the Sixth African Economic Conference (AEC) was held in
Addis Ababa from October 25-28, 2011. The conference discussed
issues relating to the environment, climate change and green
growth and how they affect Africa’s future prosperity. The
participants also reviewed over 40 research proposals and
propositions on political, economic and social issues that could help
African countries to improve their economies and agriculture without
harming the environment.
In a bid to curtail the Euro debt crisis, Euro zone leaders led by
French President Nicholas Sarkozy and German Chancellor Angela
Merkel struck a deal with private banks and insurers on October 27,
2011 to accept a 50.0 per cent loss on Greek Government bond
holdings, under a plan to lower Greece’s debt burden and to
contain the two-year old Euro zone crisis.
The 41st Council Meeting of the African Development Bank (AfDB)
held in Washington, D.C. from November 9 – 10, 2011. At the
Meeting, the Global Environment Facility (GEF) approved a grant of
USD 20.5 million for the Lake Chad Basin Regional Program for the
Conservation and Sustainable Use of Natural Resources and Energy
Efficiency. The AfDB plans to contribute USD 146 million of its


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resources to the program and was working closely with the five
implementing countries (Central African Republic, Cameroon, Niger,
Nigeria and Chad) on the program design.
Furthermore, the Seventh Ordinary Session of the Conference of
African Ministers of Trade was held in Accra, Ghana on November
29, 2011. Participants deliberated on issues related to intra-African
trade, trade with partners outside the African continent, the nondiversification of African exports with regard to products as well as
destination markets. Other issues discussed included modalities to
boost Intra-African trade, establishment of Continental Free Trade
Area (CFTA) and strengthening of supply capacities.
The inaugural Africa Trade Forum (ATF) 2011 was held at the United
Nations Conference Centre (UNCC) in Addis Ababa on November
22, 2011 with the theme “Accelerating Intra-African Trade and
Enhancing Africa’s participation in Global Trade”. The specific
objectives of the Forum were to discuss and agree on specific inputs
into the African Ministerial Conference on Trade, as well as the
African Union Heads of State Summit scheduled for January 2012, on
the theme “Boosting Intra-African Trade”. Participants at the Forum
include government policy makers, private sector operators, civil
society, parliamentarians, academia and researchers, RECs and
export promotion agencies.
Finally, the second meeting of the Working Group of the Steering
Committee of the African Central Bank (ACB) was held at the
Steering Committee Secretariat in Abuja, Nigeria from December 12
– 16, 2011. The meeting was convened to discuss and review the
Terms of Reference and to design a work programme, action plan,
timelines and a budget for the establishment of the African Central
Bank.


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Economic Report Fourth Quarter

2.0 Financial Sector Developments
2.1 Monetary and Credit Developments
The growth in the key monetary aggregate was significant at the
end of the fourth quarter of 2011. Banks’ deposit rates generally
increased, while lending rates indicated mixed developments during
the quarter under review. The value of money market assets
increased, due largely, to the rise in FGN bonds and NTBs.
Transactions on the Nigerian Stock Exchange (NSE) was mixed during
the review quarter.
Provisional data indicated that major monetary aggregate
grew significantly at the end of the fourth quarter of 2011.
Relative to the level at the end of the preceding quarter,
broad money supply, (M2), grew by 5.4 per cent to N13,300.3
billion at end-December 2011, compared with the growth of
3.6 per cent at end-September 2011. The development
reflected the 24.3 per cent and 7.7 per cent growth in
domestic credit (net) and foreign assets (net), respectively,
which more than offset the effect of the 55.0 per cent decline
in other assets (net) of the banking system. Narrow money
supply, (M1), at N6, 768.4 billion, also rose by 12.7 per cent at
the end of the fourth quarter, compared with the increase of
6.4 per cent at the end of the preceding quarter of 2011. The
development reflected the 15.9 and19.9 per cent increase in
its demand deposit and currency components, respectively.
Quasi money, at N6,531.9, declined by 1.3 per cent below the
level at the end of the corresponding quarter.
Relative to the level at end-December 2010, M2 rose by 15.4
per cent, reflecting the 42.4 and 10.4 per cent increase in
domestic credit (net) and foreign assets (net) of the banking
system, respectively. Similarly, M1 grew by 21.5 per cent, owing
to the 15.0 and 23.1 per cent increase in its currency outside
banks and demand deposit components, respectively (Fig. 1,
Table 1).
Key monetary
aggregate grew
moderately
during Q4 2011.


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Economic Report Fourth Quarter

Figure 1: Growth Rate of Narrow Money (M1) and Broad Money (M2)1

Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Quarterly (%)
Cumulative (%)
QM1 (RHS)
QM2 (RHS)
CM1 (LHS)
CM2 (LHS)

At N12,403.2 billion, aggregate banking system credit (net) to
the domestic economy, rose by 24.3 per cent at the end of
the fourth quarter of 2011, compared with 12.1 per cent at the
end of the preceding quarter. The development reflected
largely, the 53.6 and 16.3 per cent increase in claims on the
Federal Government and the private sector, respectively.
Banking system’s credit (net) to the Federal Government, at
the end of the review quarter, rose by 53.6 per cent to
negative N531.2 billion, in contrast to a decline of 7.5 per cent
in the preceding quarter. The development was accounted
for largely by the increase in banking system’s holdings of
Federal government securities, particularly FGN Bonds and
Treasury Bills. The Federal Government, however, remained a
net lender to the banking system at the end of the review
quarter.
At the end of fourth quarter 2011, banking system’s credit to
the private sector rose by 16.3 per cent to N12,934.3 billion,
compared with the increase of 11.6 per cent at the end of the

1 QM1 and QM2 represent quarter-on-quarter changes, while CM1a and CM2 represent
cumulative changes (year-to-date).


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Economic Report Fourth Quarter

preceding quarter. The development was attributed, wholly,
to the 15.8 per cent increase in claims on the core private
sector (Fig. 2, Table 1).
Figure 2: Growth Rate of Aggregate Domestic Credit to the Economy2


-20
-10

Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Quarterly (%)
Cumulative (%)
QCP (RHS)
QCG (RHS)
QAC (RHS)
CCP (LHS)
CCG (LHS)
CAC (LHS)

At N7,180.6 billion, foreign assets (net) of the banking system
increased by 7.7 per cent at the end of the fourth quarter of
2011, compared with the increase of 3.4 per cent at the end
of the preceding quarter of 2011. The development was
attributed to the increase of 11.4 per cent in CBN’s holdings of
foreign assets. Quasi-money fell by 1.3 per cent to N6,531.9
billion, in contrast to the growth of 1.2 per cent at the end of
the preceding quarter of 2011. The development reflected the
rise in two of its components namely, time and savings
deposits of the DMBs.
Other assets (net) of the banking system rose by 55.9 per cent,
to N6,283.5 billion, compared with the increase of 26.6 per
cent at end-September 2011. The increase reflected, largely,
the rise in unclassified assets of both the CBN and the DMBs.


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).
Banking system
credit to the
private sector
rose at the end
of the fourth
quarter of 2011.
Foreign assets
(net) of the
banking system
increased at the
end of the
quarter under
review.


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Economic Report Fourth Quarter

Table 1: Growth in Monetary and Credit Aggregates (Percent)
Mar.09
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
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)

Currency-in-circulation (CIC) and Deposits at
the CBN
At N1, 565.8 billion, currency in circulation rose by 16.6 per
cent at the end of the fourth quarter of 2011, in contrast to the
decline of 1.5 per cent at the end of the preceding quarter of
2011. The development was attributed, largely, to the 23.0 per
cent increase in currency outside the banking system.

Total deposits at the CBN amounted to N5,893.7 billion,
indicating an increase of 13.3 per cent, compared with 9.8
per cent at the end of the preceding quarter of 2011. The
development reflected the 115.3 and 8.5 per cent increase in
DMBs and private sector deposits, respectively, which more
than offset the 0.2 per cent decline in Federal Government
Deposit. Of the total deposits, the shares of the Federal
Government, banks and ‘’others’’ were N4,072.5 billion (69.1
per cent), N1,218.5 billion (20.7 per cent) and N602.8 billion
(10.2 per cent), respectively.
Consistent with the trends in DMBs’ deposits with the CBN, the
reserve money (RM), increased by 34.8 per cent to N2,784.3
billion, from N1,908.9 billion at the end of the preceding
quarter.
2.3
Money Market Developments
Following the monetary tightening stance of the Bank, most
financial market indicators trended upward during the review
period. The Bank was proactive in the implementation of its
monetary policy. In In order to ensure that major inflows such
as the purchase of N1.84 trillion worth of Asset Management
Reserve money
(RM) increased
at the end of the
fourth quarter of
2011.


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Economic Report Fourth Quarter

Corporation (AMCON) Bond by the Bank did not distort the
market, stabilization security worth N373.73 billion was sold to
the DMBs to mop up the surplus created.
Following the completion of the process of recapitalization of
most of the intervened banks during the review quarter, the
financial markets became more stable with stronger banks
emerging. The development resulted in the reduction of
volume requested at both the SLF and repurchase transaction
(REPO) segments.
Provisional data indicated that the value of money market
assets outstanding at the end of the fourth quarter of 2011
stood at N5,408.6 billion, showing an increase of 4.4 per cent,
compared with the increase of 3.8 per cent recorded at the
end of the third of 2011. The development was attributed to
the 5.3 and 4.4 per cent increase in FGN Bonds and Nigerian
Treasury Bills outstanding, respectively.
2.3.1
Interest Rate Developments
Available data indicated an upward trend in banks’ interest
rates in the fourth quarter of 2011. With the exception of the
average savings deposit, which declined by 0.16 percentage
point to 1.41 per cent, all other rates on deposits of various
maturities rose from a range of 2.13 – 5.81 per cent in the third
quarter of 2011 to 3.37 – 7.09 per cent. Similarly, at 5.73 per
cent, the average rate on term deposit, increased by 1.10
percentage point above the level in the preceding quarter.
The maximum and prime lending rates also rose by 0.87 and
0.80 percentage points to 23.21 and 16.69 per cent,
respectively, in the fourth quarter. Consequently, the spread
between the weighted average term deposit and maximum
lending rate narrowed to17.48 percentage points from 17.71 in
the preceding quarter. The margin between the average
savings deposit and the maximum lending rate, however,
widened from 20.77 per cent in the preceding quarter to 21.80
percentage points. With headline inflation rate of 10.3 per
cent at end-December 2011, all rates, with the exception of
lending rates, were negative in real terms.
At the interbank call segment, the weighted average interbank call rate, which stood at 8.72 per cent at end
September 2011, rose significantly by 6.92 percentage points
All deposits of
various
maturities
trended upwards
in Q4 2011.
The spread
between the
weighted -
average term
deposit and
maximum lending
rates widened.
All interbank
money market
rates trended
upwards in Q4
2011.


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Economic Report Fourth Quarter

to 15.64 per cent in the fourth quarter of 2011, reflecting the
liquidity condition in the inter-bank funds market. The
weighted average rate at the Open Buy Back (OBB) segment,
increased to 13.52 per cent at the end of the review quarter
from 8.8 per cent in the preceding quarter. The Nigeria Interbank Offered Rate (NIBOR) for the 7- and 30-day tenors also
increased to 15.83 and 16.30 per cent, respectively, in the
review quarter from 10.33 and 11.25 per cent in the third
quarter of 2011 (Fig. 3, Table 2).
Figure 3: Selected DMBs Interest Rates (Average)

Q1-09Q2-09Q3-09Q4-09Q1-10Q2-10Q3-10Q4-10Q1-11Q2-11Q3-11Q4-11
Percent per Annum
Percent per Annum
Prime
Interbank
Maximum
Average Term Deposits

Table 2: Selected Interest Rates (Percent, Averages)
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Average Term Deposits

Prime Lending

Interbank

Maximum Lending


2.3.2
Commercial Paper (CP)
The value of Commercial Paper (CP), held by DMBs declined
by 3.0 per cent to N203.0 billion at the end of the fourth
quarter of 2011, as against an increase of 11.0 per cent at the
end of the preceding quarter. Thus, CP constituted 3.8 per
cent of the total value of money market assets outstanding,
compared with 4.0 per cent as at the end of the preceding
quarter.


Investment in
CPs by DMBs
declined in the
fourth quarter
of 2011.


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Economic Report Fourth Quarter

2.3.3
Bankers’ Acceptances (BAs)
The value of BAs held by DMBs fell by 15.6 per cent to N73.4
billion at the end of the review quarter, as against the rise of
45.1 per cent at the end of the preceding quarter. The
development reflected the decline in investments in BAs by
deposit money banks and discount houses. Consequently, BAs
accounted for 1.4 per cent of the total value of money
market assets outstanding at the end of the review quarter,
compared with 1.7 per cent at the end of the preceding
quarter.
2.3.4
Open Market Operations
Maturities ranging from 6 to 356 days were used to mop up
excess liquidity at the Open Market Operation (OMO). Total
sales in the fourth quarter was N1,416.12 billion, while the bid
rates ranged from 11.00 – 20.69 per cent. The issue rates for the
review period ranged from 12.31 – 17.05 per cent. The fourth
quarter allotment showed an increase of 130.8 per cent,
compared with the previous quarter allotment of N613.49
billion.
2.3.5
Primary Market
At the primary market segment, NTBs of 91-, 182- and 364-day
tenors, amounting to N907.50, N1,462.78 and N872.79 billion,
respectively, were offered, subscribed to and allotted in the
fourth quarter of 2011, compared with the respective sums of
N782.16 billion, N1396.4 billion and N709.22 billion in the
preceding quarter. The bid rates ranged from 10.0100 to
19.0100 per cent for the 91- day tenor, 11.2500 to 19.1100 per
cent for the 182-day tenor and 12.5000 to 20.0000 per cent for
the 364-day tenor, compared with the range of 6.80 to 10.23,
7.09-12.99 and 8.4-13.50 per cent for the same tenors in the
preceding quarter. Patronage
at
the primary
market
remained
impressive
and
reflected
market
players’
preference for risk-free government securities with attractive
yields.
2.3.6
Bonds Market
FGN Bonds of 3-, 5- and 10-year tranches were re-opened
during the fourth quarter of 2011. The total amount allotted for
the 3-, 5- and 10-year tenors were N8.00 billion, N17.67 billion,
and N159.10 billion, respectively. The marginal rates were
Patronage at the
primary market
remained
impressive due to
market players’
preference for
risk-free
government
securities.
Subscription for
FGN Bonds of
various maturities
was impressive and
driven by market
players’ confidence
in the economy
and their
perception about
stable and
attractive yields.
DMBs’
holdings of
BAs fell during
Q4 of 2011.


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Economic Report Fourth Quarter

15.50 – 18.00, 16.30 - 18.00 and 15.00-18.00 per cent,
respectively, for the 3-, 5- and 10- year tenors. The increase in
yield in the fourth quarter was attributed to further monetary
tightening through the upward review of MPR by the Bank,
from 8.75 in July to 9.25 per cent in September 2011 and to
12.0 per cent in October 2011.
2.3.7
CBN Standing Facilities
The total Standing Lending Facility (SLF) granted during the
review
period
was
N10,448.41
billion,
compared
with
N12,886.59 billion in third the quarter 2011. The development
was due mainly to the stronger position of some DMBs that
had recently completed the process of recapitalization and
the inflow from the AMCON Bond proceeds.
2.4
Deposit Money Banks’ Activities
Available data indicated that the total assets and liabilities of
the DMBs stood at N19,396.6 billion at the end of the fourth
quarter of 2011, representing a decline of 2.0 per cent from
the level at the end of the preceding quarter. The funds,
which were sourced, largely, from increased deposit liabilities
and recovery of loans from the private sector, were used
mainly to purchase Federal Government Securities, acquisition
of unclassified liabilities and accretion to capital accounts.
Central Bank’s credit to the DMBs largely, loans and
advances, declined by 25.6 per cent to N295.0 billion at the
end of the review quarter.
At N12,632.0 billion, DMBs’ credit to the domestic economy,
increased by 2.4 per cent above the level in the preceding
quarter. The development was attributed, wholly, to the 43.7
per cent increase in claims on the Federal Government.
Total specified liquid assets of the DMBs stood at N6,090.9
billion, representing 42.0 per cent of their total current
liabilities. At that level, the liquidity ratio rose by 22.0 and 12.0
percentage points above the levels at the end of the
preceding quarter and the stipulated minimum ratio of 30.0
per cent, respectively. The loans-to-deposit ratio, at 44.8 per
cent, also increased by 1.4 percentage points above the level
at the end of the preceding quarter, but was 35.2 percentage
points below the prescribed minimum ratio of 80.0 per cent.

The liquidity ratio
in December 2011
at 42.0 per cent
was above the
stipulated
minimum liquidity
ratio by 12.0
percentage points.
Loan-to-deposit
ratio fell below
the prescribed
minimum by 35.2
percentage points.
The MPR and SLF
rates were 12.0
and, 14.0 per cent,
while the SDF was
10.0 per cent.


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Economic Report Fourth Quarter

2.5
Discount Houses’ Activities
Total assets/liabilities of the discount houses stood at N305.9
billion at the end of fourth quarter of 2011, indicating a
decline of 8.4 and 15.6 per cent below the levels at the end of
the preceding quarter and the corresponding quarter of 2010,
respectively. The fall in assets was accounted for, largely, by
the
50.9
per
cent
decline
in
claims
on
“others”.
Correspondingly, the fall in total liabilities was attributed,
largely, to the decline of 30.3 per cent in the level of moneyat-call during the period.
Discount houses’ investment in Federal Government securities
of less than 91-day maturity increased by 12.2 per cent to
N62.5 billion and represented 20.4 per cent of their total
deposit liabilities. At this level, discount houses’ investment was
also 27 percentage points below the prescribed minimum
level of 60.0 per cent for fiscal 2011. Total borrowing by the
discount houses was N3.0 billion, while their capital and
reserves stood at N49.6 billion. This resulted in a gearing ratio of
1.2:1, compared with the stipulated maximum of 50:1 for fiscal
2011.
2.6
Capital Market Developments
2.6.1
Secondary Market

Activities on the Nigerian S tock Exchange (NSE) were mixed.
The volume and value of traded securities rose by 23.6 and 4.8
per cent to 23.6 billion shares and N140.9 billion, respectively,
in 428,993 deals, compared with 19.09 billion shares, valued at
N134.44 billion, in 317,002 deals in the preceding quarter. The
Banking sub-sector remained the most active on the
Exchange with a traded volume of 939.01 billion shares,
valued at N77.01 billion in 111,645 deals. This was followed by
the insurance sub-sector with a traded volume of 8.93 billion
shares, valued at N13.7 billion in 7,482 deals.


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 4: Volume and Value of Traded Securities

Table 3: Traded Securities on the Nigerian Stock Exchange (NSE)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Volume (Billion)

Value (N Billion)


2.6.2
Over-the-Counter (OTC) Bonds Market
Transactions on the Over-the-Counter (OTC) bonds market,
indicated a turnover of 1.83 billion units worth N1.4 trillion in
13,206 deals in the review quarter, compared with 2.6 billion
units, valued at N1.3 trillion, in 17,944 deals in the third quarter
of 2011.
2.6.3
New Issues Market
There were four (4) supplementary issues in the fourth quarter
of 2011 as shown below.
Table 4: New and Supplementary Securities Issue
S/N
Company
Additional Shares (billion)
Reasons

Premier Breweries Plc
0.86
Conclusion of Rights issue

Sovereign Trust Insurance Plc
1.7
Conclusion of Right Issue

Ecobank Transnational Incorp.
2.5
Acquisition of Oceanic Bank Inter. Plc

Sterling Bank Plc
3.1
Merged with Equitorial Trust Bank Ltd

2.6.4
Market Capitalization
The market capitalization of the 186 listed securities rose by 1.1
per cent to N10.28 trillion over the preceding quarter’s level of
N10.17 trillion. The equities sub-sector, accounted for 63.61
per cent of the total market capitalization (N10.28 trillion).
Market
capitalization
increased, while
All-Share Index
trended
downwards during
Q4 2011.


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

Economic Report Fourth Quarter

2.6.5
NSE All-Share Index
The All-Share Index of listed securities which opened at
23,373.0 at the beginning of the quarter, closed at 20,730.63,
representing a decline of 12.7 per cent below the level in the
preceding quarter. Three of the four sectoral indices, the NSE
Food/Beverage, Banking and Insurance, increased by 0.9,
0.14 and 0.04 per cent, respectively, while Oil/Gas index
declined by 0.42 per cent.
Figure 5: Market Capitalization and All-Share Index

Table 5: Market Capitalization and All Share Index (NSE)
Q1-09
Q2-09
Q3-09
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Market Capitalization (N trillion)

All-Share Index (Equities)


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

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

3.0
Fiscal Operations
3.1
Federation Account Operations
Available data showed that total federally-collected revenue
during the fourth quarter of 2011 stood at N3,025.10 billion,
representing a decline of 9.1 per cent from the level in the
preceding quarter, but an increase of 51.7 per cent above
the level in the corresponding quarter of 2010 (Fig. 6, Table 5).
Figure 6: Components of Gross Federally Collected Revenue

Q1-09
Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Oil Revenue Gross
Non-Oil Revenue

Table 6: Gross Federation Account Revenue (N billion)
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Federally-collected revenue (Gross)

Oil Revenue

Non-Oil Revenue


At N2,408.12 billion, gross oil receipts, which constituted 79.6
per cent of the total, exceeding the budget estimate by 41.3
per cent, but was lower than the level in the preceding
quarter by 8.9 per cent. The decline in oil receipts relative to
the preceding quarter was attributed, largely, to the fall in the
receipts from petroleum profit tax (PPT) and royalties (Fig. 7,
Table 7).
Gross federally
collected revenue
fell by 9.1 per cent
below the level 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

Figure 7: Gross Oil Revenue and Its Components
-


Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
N billion
Others
PPT/Royalties
Crude oil/Gas Sales


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


Non-oil receipts, at N616.98 billion (20.4 per cent of the total),
was above the budget estimate by 2.7 per cent, but was
below the level in the preceding quarter by 9.9 per cent. The
decline in non-oil revenue relative to the preceding quarter
reflected, largely, the decline in Corporate Taxes and National
Information Technology Development Fund (NITDF) during the
review period (Fig. 8, Table 8).


Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
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
-

Q1-09
Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
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)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Non-Oil Revenue

Value-Added Tax (VAT)

Companies Income Tax & Other Taxes

Customs & Excise Duties

Others


As a percentage of projected fourth quarter 2011 nominal
GDP, oil and non-oil revenue were 24.2 and 6.2 per cent,
respectively.
Of the gross federally-collected revenue during the review
quarter, the sum of N1,404.18 billion (after accounting for all
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
N663.50
billion,
while
the
states
and
local
governments received N336.54 billion and N259.46 billion,
respectively. The balance of N144.68 billion went to the 13.0%
Derivation Fund for distribution to the oil-producing states.
Also, the Federal Government received N23.72 billion from the
VAT Pool Account, while the state and local governments
received N79.05 billion and N55.34 billion, respectively. During
the period under review, the sum of N257.08 billion was drawndown from the excess crude account to bridge the short-fall in
revenue for the period and was shared as follows: Federal
(N117.82 billion), state (N59.76 billion) and local governments
The sum of
N1404.18 billion
out of the
federally
collected revenue
was set aside for
distribution by
the three tiers of
government and
the 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

(N46.07 billion). Thus, the total allocation to the three tiers of
government in the fourth quarter of 2011 amounted to
N1,849.83 billion.
3.2
The Fiscal Operations of the Three Tiers of
Government
3.2.1
The Federal Government

At N587.71 billion, the Federal Government retained revenue
for the fourth quarter of 2011 was lower than the quarterly
budget estimate, receipts in the preceding quarter and the
corresponding quarter of 2010 by 34.7, 50.4, and 34.8 per cent,
respectively. Of this amount, the Federal Government share
from the Federation Account was N423.20 billion (72.07%), the
VAT
Pool
Account
was
N15.55
billion
(2.65%),
FGN
Independent Revenue N39.51 billion (6.64%), while “Others”
accounted for N109.45 billion (18.64%), respectively (Fig. 9,
Table 8).
Figure 9: Federal Government Retained Revenue
Federation Account
(72.07%)
VAT Pool
Account (2.65%)
FGN Independent
Revevue (6.64%)
Others
(18.64%))

Table 9: Federal Government Fiscal Operations (N billion)
Q1-09
Q2-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Retained Revenue

Expenditure

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


Total expenditure for fourth quarter stood at N952.77 billion,
indicating lower outlay relative to the levels in the quarterly
budget estimate and the preceding quarter by 19.6 and 29.2
Federal government
estimated retained
revenue was lower
than the
proportionate
budget estimate,
while total
expenditure was
lower than the
proportionate 2011
budget provision for
the 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

per cent, respectively. The development was attributed to the
delay in capital releases during the period. A breakdown of
total expenditure showed that the recurrent component
accounted for 76.4 per cent, capital component 14.3 per
cent, while statutory transfers accounted for the balance of
9.3 per cent (Fig. 10). Further breakdown of the recurrent
expenditure
showed
that
the
non-debt
component
accounted for 79.5 per cent, while debt service payments
accounted for the balance of 20.5 per cent.
Thus, the fiscal operations of the Federal Government resulted
in an estimated deficit of N365.06 billion or 3.7 per cent of
GDP, compared with the quarterly budget deficit and the
preceding period deficit of N284.16 billion and N161.13 billion,
respectively. The deficit was financed mainly from domestic
sources, particularly through the issuance of additional FGN
Bonds.
Figure10: Federal Government Expenditure
Recurrent
Capital
Transfers
Capital
(14.29%)
Transfers
(9.31%)
Recurrent (76.4%)


3.2.2
Statutory Allocations to State Governments

Total receipts, including the 13.0 per cent Derivation Fund and
share of VAT of the state governments from the Federation
Account stood at N672.38 billion during the review quarter.
This represented an increase of 8.9 and 53.8 per cent, over the
levels in the preceding quarter and the corresponding 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

of 2010, respectively.
Further breakdown showed that, at N79.05 billion, receipts
from the VAT Pool Account declined by 6.7 per cent from the
level in the preceding quarter, while receipts from the
Federation Account stood at N593.32 billion. Of the Federation
Account receipts, N490.32 was from statutory allocation, while
N182.06 billion was from the 13% Derivation Fund. On a
monthly basis, the sum of N229.09 billion, N220.85 billion and
N222.44 billion was allocated as statutory allocations and VAT
receipts to the 36 state governments in October, November
and December 2011, 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 2011,
stood at N372.40 billion. This amount was lower than the level
in the preceding quarter by 24.6 per cent, but higher than the
level in the corresponding quarter of 2010 by 37.1 per cent. Of
the total amount, allocation from the Federation Account was
85.1 per cent, while VAT Pool Account accounted for the
balance of 14.9 per cent. On a monthly basis, the sum of
N122.36 billion, N127.92 billion and N122.12 billion was
allocated as statutory allocations and VAT receipts to the 774
local governments in October, November and December
2011, respectively.
The fiscal
operations of the
FG resulted in an
estimated deficit
of 3.7 per cent of
GDP in Q4 2011,
financed through
domestic
borrowing.


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Economic Report Fourth Quarter

4.0
Domestic Economic Conditions
Aggregate output growth measured by the real gross domestic
product (GDP) grew by 7.7 per cent, compared with 7.4 per cent in
the preceding quarter. The development was attributed largely to
the 9.1 per cent growth in the non-oil sector. Crude oil production
was estimated at 2.24 million barrels per day (mbd) or 206.08 million
barrels for the quarter. The end-period inflation rate for the fourth
quarter of 2011, on year-on-year basis, was 10.3 per cent, compared
with 10.3 and 11.8 per cent in the preceding quarter and the
corresponding quarter of 2010, respectively. The inflation rate on a
12-month moving average basis was 10.8 per cent, compared with
the 11.4 and 13.7 per cent in the preceding quarter and
corresponding period of 2010.
4.1
Aggregate Output
Aggregate output in the fourth quarter measured by gross
domestic product (GDP) at 1990 basic prices grew by 7.7 per
cent, compared with 7.4 per cent recorded in the preceding
quarter. The rise in the review quarter was attributed largely to
the growth in the non-oil sector. Relative to the corresponding
quarter of 2010, the real GDP grew at approximately 8.4 per
cent.
Real non-oil GDP stood at 9.1 per cent and accounted for
85.6 per cent of total GDP in the review quarter. Real oil GDP,
comprising crude petroleum and natural gas, grew by 6.5 per
cent when compared with the level at the preceding quarter
of 2011 and accounted for 14.4 per cent of the total GDP (Fig.
11, Table 10).


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 11: Real GDP Growth Rate and Share of Oil and Non-oil in GDP

-2

Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
% of GDP
Percent
Oil Share of GDP (RHS)
Non-Oil Share of GDP (RHS)
GDP Growth (LHS)
Oil GDP Growth(LHS)
Non-oil GDP Growth (LHS)


Table 10: Growth Rate of Real GDP and Sectoral Shares (Percent)
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Growth Rate (%)
Real GDP

Oil (Crude Petroleum/Natural Gas)

Non-oil

Share in Real GDP (%)
Real GDP

Oil (Crude Petroleum/Natural Gas)

Non-Oil


4.2
Agricultural Sector
Agricultural activities during the fourth quarter of 2011 were
dominated by harvesting of various crops, especially yam, Irish
and sweet potatoes, maize and groundnuts. Farmers
continued with the preparation of land and nurseries for
tomatoes, pepper, carrots, cabbage and other vegetables. In
the livestock sub-sector, farmers engaged in fattening and
other management activities in anticipation of the end of year
sales.
A total of N3, 378.8 million was guaranteed to 15,405 farmers
under the Agricultural Credit Guarantee Scheme (ACGS) in
the fourth quarter of 2011. This represented a decline of 4.9
per cent from the level in the preceding quarter, but an
increase of 12.9 per cent above the level in the corresponding
quarter of 2010.


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

Economic Report Fourth Quarter

A sub-sectoral analysis of the loans guaranteed indicated that
the food crops sub-sector received the largest share of N2,
015.9 million (59.7 per cent) for 11,328 beneficiaries, while the
livestock sub-sector got N761.0 million (22.5 per cent) for 1,481
beneficiaries. Also, 1,085 beneficiaries in the fisheries subsector obtained N316.9 million (9.4 per cent); ‘Others’ subsector obtained N136.8 million (4.0 per cent) guaranteed to
231 beneficiaries. In the mixed crop sub-sector, 1,232
beneficiaries received N122.4 million (3.6 per cent), while
N25.7 million (0.8 per cent) was disbursed to 48 beneficiaries in
the cash crop sub-sector. Further analysis showed that, 35
states benefited from the scheme during the quarter, with the
highest and lowest sums of N431.3 million (12.8 per cent) and
N2.3 million (0.07 per cent) guaranteed to farmers in Kano and
Ondo states, respectively.
At end-December 2011, the total amount released by the
CBN during the fourth quarter under the Commercial
Agriculture Credit Scheme (CACS) since inception to the
participating banks stood at N151.02 billion (for one hundred
and ninety projects). The beneficiaries included twenty six
state governments (Table 10).


The retail prices of most staples recorded decline in the fourth
quarter of 2011. Ten of the fourteen commodities monitored
The retail prices
of most staples
fell during Q4
2011.
Table 11: Disbursement of Credit Under the Commercial Agriculture Credit Scheme (CACS)
S/N
Participating Banks
Amount Disbursed (N billion) Number of Projects/State Governments

United Bank for Africa (UBA) Plc
38.41

Zenith Bank
18.54

First Bank of Nigeria Plc
16.23

Union Bank Nigeria PLC
14.86

Unity Bank Plc
12.30

Access Bank Plc
9.93

Stanbic IBTC Bank
9.25

Skye Bank Plc
8.67

Fidelity Bank Plc
7.56

GTBank Plc
5.55

Oceanic Bank Plc
2.62

Sterling Bank Plc
2.45

Mainstreet Bank Plc
2.00

Citibank Plc
1.50

Diamond Bank Plc
0.99

Wema Bank Plc
0.16

TOTAL
151.02

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

Economic Report Fourth Quarter

recorded price decline from their levels in the preceding
quarter ranging from 1.8 per cent for local rice to 13.1 per
cent for yam flour. Palm oil, white garri, yellow garri and brown
beans, however, recorded price increase of 0.2, 0.5, 0.9 and
1.9 per cent, respectively. The price development was, largely,
attributed to the dampening effect of good harvest on food
prices. When compared with their levels in the corresponding
period of 2010, all the commodities monitored recorded price
increase, which ranged from 1.0 per cent for brown beans to
0.1 per cent for eggs (medium).
4.3
Industrial Production
Industrial activities during the fourth quarter of 2011 indicated
an improvement relative to the level in the preceding quarter.
At 135.1 (1990=100), the estimated index of industrial
production rose by 1.5 and 7.4 per cent, over the levels
attained in the preceding quarter and the corresponding
quarter of 2010, respectively. The development reflected the
increased activities in the manufacturing sub-sector.
The estimated index of manufacturing production, at 103.9
(1990=100), increased by 2.1 and 8.4 per cent, over the levels
in the preceding quarter and the corresponding period of
2010, respectively. The estimated capacity utilization also
increased by 3.8 percentage points to 59.9 per cent over the
level in the corresponding period of 2010. The development
was attributed to the increased business confidence arising
from the relative economic stability reflected in the higher
growth of GDP (Fig. 12, Table 11).
The improvement
in industrial
activities during
Q4 2011 was
accounted for by
the increased
activities in the
manufacturing
sub-sector.
Industrial
capacity
utilization was
estimated to
have increased
by 3.8
percentage
points relative to
the level in the
corresponding
period of 2010.


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 12: Capacity Utilization Rate

Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Percent

At 144.8 (1990=100), the index of mining production declined
by 0.6 per cent from the level attained in the preceding
quarter, but rose by 8.0 per cent over the level in the
corresponding quarter of 2010. The decline in mining
production during the quarter was accounted for by the fall in
quarrying and other mining activities.
At 3,213.75 MW/h, estimated average electricity generation
fell by 1.6 per cent, from the level attained in the preceding
quarter. The development resulted from the fall in gas supply
to the thermal stations as well as the fall in water level at the
hydro stations.
At 2,733.56 MW/h, estimated average electricity consumption,
fell by 4.2 per cent over the level in the preceding quarter. The
development was attributed to the decline in electricity
generation and consequent fall in power supply (Fig. 13, Table
12).
Average
electricity
generation and
consumption
declined during
the quarter
under review.


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 13: Index of Industrial Production (1990=100)

Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11
Index
Mining
Electricity
All Sectors
Manufacturing

Table 12: Index of Industrial Production and Manufacturing Capacity Utilization Rate
Q3-09
Q4-09
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
All Sectors (1990=100)

Manufacturing

Mining

Electricity

Capacity Utilization (%)

Petroleum Sector
Nigeria’s crude oil production, including condensates and
natural gas liquids, was estimated at 2.24 million barrels per
day (mbd) or 206.08 million barrels during the fourth quarter of
2011, compared with 2.19 mbd or (201.48 million barrels) in the
preceding quarter. This represented an increase in production
level of 0.05 mbd or 2.28 per cent. Consequently, crude oil
export was estimated at 1.79 mbd or (164.68 million barrels) in
the review period, compared with 1.74 mbd in the preceding
quarter, representing an increase of 2.9 per cent. The increase
was attributed to the restoration of major oil pipelines, which
supplies crude to Warri and Kaduna refineries as well as the
success of the amnesty programme introduced by the Federal
government. Allocation of crude oil for domestic consumption
was 0.45 mbd or 41.4 million barrels during the period under
review.
At an estimated average of US$112.28 per barrel, the price of
Nigeria’s reference crude, the Bonny Light (37o API), fell by
3.14 per cent, from the level in the preceding quarter. The
Crude oil and
natural gas
production
increased to 2.24
mbd during Q4
2011.
Crude oil export
also recorded
an increase in
Q4 2011.


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

Economic Report Fourth Quarter

average prices of other competing crudes namely, the West
Texas Intermediate, the U.K Brent and the Forcados also fell, to
US$88.59, US$110.85 and US$113.4 per barrel, respectively,
from US$88.71, US$114.21 and US$116.79 per barrel in the
preceding quarter. Similarly, the average price of OPEC’s
basket of eleven crude streams also fell by 0.5 per cent from
the level in the preceding quarter to US$107.9. The
development was attributed largely to the improved supply
situation in the North Sea and the return of Libyan production
(Fig. 14, Table 13).
Figure14: Trends in Crude Oil Prices

Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11
US$ per barrel
Bonny Light
OPEC Basket


Table 13: Average Crude Oil Prices in the International Oil Market
Q3-09
Q4-09
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Bonny Light

OPEC Basket


4.5
Consumer Prices3
Available
data
showed
that
the
all-items
composite
Consumer Price Index (CPI) at the end of the fourth quarter of
2011, was 126.0 (November 2009=100), representing an
increase of 1.6 and 10.3 per cent over the levels in the

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.
Average crude oil
prices, including
Nigeria’s
reference crude,
Bonny Light (37o
API), fell in the
international
crude oil market
in Q4 2011.


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

Economic Report Fourth Quarter

preceding quarter and the corresponding quarter of 2010,
respectively. The development was attributed, largely, to the
increase in the prices of food items and non-alcoholic
beverages, as well as clothing and foot wear, kerosene and
diesel and transport.
The urban all-items CPI at the end of the fourth quarter 2011,
was 122.3 (November 2009=100), indicating an increase of 1.9
and 9.0 per cent over the levels in the preceding quarter and
the corresponding quarter of 2010, respectively. Similarly, at
129.0 (November 2009=100), the rural all-items CPI at the end
of the quarter, increased by 1.3 and 11.3 per cent over the
levels in the preceding quarter and the corresponding quarter
of 2010, respectively (Fig. 15, Table 14).
Figure15: Consumer Price Index

Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Index
Composite
Urban
Rural

Table 14: Consumer Price Index (November 2009=100)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Composite

Urban

Rural

The end-period inflation rate for the fourth quarter of 2011, on
a year-on-year basis remained at the preceding quarter’s
level of 10.3 per cent, but lower than the level of 11.8 per cent
at the end of the corresponding quarter of 2010. The inflation
rate on a twelve-month moving average basis for the fourth
quarter, was 10.8 per cent, compared with 11.4 and 13.7 per
cent in the preceding quarter and the corresponding quarter
of 2010, respectively (Fig. 16, Table 15).
The general price
level rose in Q4
2011 relative to Q3
2011. This was on
account of the
increase in the
prices of food
items and nonalcoholic
beverages, as well
as clothing and
footwear,
kerosene and
diesel and
transport.
The headline
inflation (y-o-y)
decreased by 1.7
percentage point, in
Q4 2011.


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 16: Inflation Rate

Table 15: Headline Inflation Rate (%)
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
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

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Economic Report Fourth Quarter

5.0
External Sector Developments
Provisional data indicated that foreign exchange inflow through the
CBN in the fourth quarter of 2011 declined by 0.5 per cent below the
level in the preceding quarter but rose by 86.1 per cent over the
level in the corresponding quarter of 2010. Outflow also decreased
by 5.1 per cent below the level in the preceding quarter but was
higher than the level in the corresponding quarter of 2010 by 41.5
per cent. Total non-oil export receipts by banks rose significantly by
177.3 per cent over the level in the preceding quarter. The average
Naira exchange rate vis-à-vis the US dollar, depreciated by 1.7 and
3.9 per cent to N155.85 and N160.29 per dollar at the Wholesale
Dutch Auction System (WDAS) and Interbank segments of the
market, respectively. It however appreciated by 0.05 per cent to
N161.63 at the Bureau De Change (BDC) segment. The gross
external reserves rose by 0.3 per cent from the preceding quarter’s
level to US$32.64 billion.
5.1
Foreign Exchange Flows
Foreign exchange inflow and outflow through the CBN in the
fourth quarter of 2011 amounted to US$13.60 billion and
US$13.40 billion, respectively, resulting in a net inflow of US$0.21
billion. Relative to the levels in the preceding quarter, inflow
and outflow fell by 0.5 and 5.1 per cent, respectively. The fall
in inflow and outflow was attributed to the 14.0 per cent
decline in oil receipts and the decline in the funding of the
wDAS segment of the foreign exchange market, respectively
(Fig. 17, Table 15).
Figure17: Foreign Exchange Flows Through the CBN
-10,000
-5,000


Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
US$ million
Inflow
Outflow
Netflow


Foreign exchange
inflow and
outflow through
the CBN fell by 0.5
and 5.1 per cent,
respectively to
post a net inflow
of US$0.21 billion.


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Economic Report Fourth Quarter

Table 16: Foreign Exchange Flows Through the CBN (US$ million)
Q4-09
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Inflow

Outflow

Netflow


Available data on aggregate foreign exchange flows through
the economy indicated that total inflow amounted to
US$25.11 billion, representing a decline of 11.8 and 6.5 per
cent below the level in the preceding quarter and the level in
the corresponding quarter of 2010, respectively. Oil sector
receipts, which accounted for 42.3 per cent of the total, stood
at US$10.61 billion, compared with the respective levels of
US$12.33 billion and US$7.06 billion in the preceding quarter
and corresponding quarter of 2010.
Non-oil public sector inflows, which accounted for 11.9 per
cent of the total foreign exchange flows, increased
significantly by 123.1 per cent above the preceding quarter’s
level , while autonomous inflow, which accounted for 45.8 per
cent, declined by 22.2 per cent below the preceding
quarter’s level.
At US$13.83 billion, aggregate foreign exchange outflow from
the economy fell by 4.0 below the level in the preceding
quarter, but increased by 42.0 per cent over the level in the
corresponding quarter of 2010. The fall, relative to the
preceding quarter, was accounted for by a 6.5 per cent
decline in the funding of wDAS.
5.2
Non-Oil Export Earnings by Exporters
Total non-oil export earnings by Nigerian exporters stood at
US$974.29 million. This indicated an increase of 177.3 and 43.5
per cent over the levels in the preceding quarter and the
corresponding quarter of 2010, respectively. The development
was attributed largely to the increase in the exports of
industrial, food and manufactured products during the review
quarter. A breakdown of the proceeds in the review quarter
showed that, manufactured products, industrial, agricultural
products, mineral, food products and transport earned
Autonomous
inflows into the
economy declined
by 22.2 per cent, in
Q4 2011 relative to
the preceding
quarter.
Total non-oil export
earnings by
exporters increased
during the fourth
quarter of 2011 on
account of an
increase in the prices
of most traded
commodities.


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Economic Report Fourth Quarter

US$516.4 million, US$288.1 million, US$98.1, US$56.4 million,
million, US$13.0 million, and US$2.3 million, respectively.
The shares of manufactured products, industrial, agricultural
products, minerals, food products and transport in non-oil
export proceeds were 53.0, 29.6, 10.1, 5.8, 1.3 and 0.2 per
cent, respectively.
5.3
Sectoral Utilisation of Foreign Exchange

The mineral and oil sector accounted for the bulk (27.7 per
cent) of total foreign exchange disbursed in the fourth quarter
of 2011, followed by industrial sector (21.7 per cent). Other
beneficiary sectors, in a descending order included: invisibles
(21.4), manufactured products (14.0 per cent), food (9.9 per
cent), transport sector (5.0 per cent) and agricultural products
(0.3 per cent) (Fig.18).
Figure18: Sectoral Utilisation of Foreign Exchange

Percent of Total
Q2-11
Q3-11
Q4-11
Invisibles
Minerals& Oil
Manufactures
Transport
Agriculture
Industrial
Food

5.4
Foreign Exchange Market Developments
Foreign exchange demand by the authorized dealers stood
at US$11.57 billion, indicating a decline of 20.2 below the level
in the preceding quarter but an increase of 54.5 per cent
above the level in the corresponding period of 2010. The sum
of US$9.54 billion, (excluding inter-bank sales and swaps) was
sold by the CBN during the review period, indicating a
.
The minerals and
oil sector
accounted for the
bulk of the total
foreign exchange
disbursed during
Q4 2011.
Demand for
foreign exchange
by authorized
dealers decreased
during Q4 2011,
below the level in
Q3 2011 but
increased by 54.5
per cent above
the
corresponding
period of 2010.


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Economic Report Fourth Quarter

decrease of 21.4 per cent below the level in the preceding
quarter, but an increase of 39.4 per cent over the level in the
corresponding quarter of 2010 (Fig. 19, Table 17).
Figure 19: Demand for and Supply of Foreign Exchange


Table 17: Demand for and Supply of Foreign Exchange (US$ billion)
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Forex Sales at WDAS

Forex Demand at WDAS

Supply of Forex to BDC

Total Forex Supply(BDC and WDAS)


Under the wDAS, the average exchange rate of the Naira visà-vis the US dollar depreciated by 1.7 per cent to N155.85 per
US dollar from N153.32 in the preceding quarter. It also
depreciated by 3.5 per cent relative to the level in the
corresponding quarter of 2010. In the bureau-de-change
segment of the market, the naira traded at an average of
N161.63 per US dollar, compared with N161.71 per US dollar in
the preceding quarter. In the interbank segment, the Naira
exchanged at an average of N160.29 to the US dollar in the
fourth quarter of 2011, compared with N154.32 and N151.65
per US dollar in the previous quarter and the corresponding
quarter of 2010, respectively (Fig. 20, Table 17).
The premium between the wDAS and the bureau-de-change
rates narrowed from 5.2 per cent in the preceding quarter to
3.6 per cent, while that between the wDAS and interbank
widened from 0.7 per cent in the preceding quarter to 2.8 per
The Naira exchange
rate vis-à-vis the US
dollar depreciated
at the wDAS and
interbank segments
but appreciated at
the BDC segment of
the foreign
exchange market in
Q4 2011.
The premium
between the wDAS
rate and the rates in
the other two
segments were 2.8
per cent for the
interbank and 3.7
per cent for the BDC
segment.


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Economic Report Fourth Quarter

cent (Fig. 21, Table 16).
Figure 20: Average Exchange Rate Movements


Table 18: Exchange Rate Movements and Exchange Rate Premium
Q4-09
Q1-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
Average Exchange Rate (N/US$)
WDAS/RDAS

BDC

Interbank

Premium (%)
WDAS/BDC

WDAS/Interbank


Figure 21: Exchange Rate Premium

Q4-08
Q1-09
Q2-09
Q3-09
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Percent
WDAS/BDC
WDAS/Interbank


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Economic Report Fourth Quarter

5.5
Gross External Reserves
Gross external reserves at the end of the fourth quarter of 2011
stood at US$32.64 billion, indicating an increase of 0.3 per cent
above the US$32.53 billion recorded at the end of the
preceding quarter. A breakdown of the reserves showed that
CBN holding stood at US$24.29 billion (74.4 per cent), Federal
Government holding was US$3.19 billion (9.8 per cent) and the
Federation Account portion (Excess Crude) was US$5.16billion
(15.8 per cent) (Fig. 22, Table 18).

Figure 22: Gross External Reserves


Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
US$ million


Table 19: Gross External Reserves (US$ million)
Q4-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Q2-11
Q3-11
Q4-11
External Reserves


Gross external
reserves rose
during the fourth
quarter of 2011.


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Economic Report Fourth Quarter

6.0 Global Economic Conditions
6.1 Global Output
The prospects for rapid growth in global output in 2012
remains unlikely as the impact of the financial turmoil in
Europe has spread to the developing and other high-income
countries, which were previously unaffected. The contagion
has raised borrowing costs in many parts of the world, pushed
down major stock market indices and adversely affected
capital flows to developing countries. Europe appeared to
have entered a recession and growth in several major
developing countries recorded slower rates than in 2010.
According to the revised World Bank Global Economic
Prospects, the global economy was revised downwards to
grow at 2.5 per cent in 2012 and 3.1 per cent 2013. Highincome country was expected to grow by 1.4 and 2.0 per
cent in 2012 and 2013, respectively. Growth in developing
countries was also revised downwards to 5.4 and 6.0 per cent.

6.2 Global Inflation
Inflationary movement in the quarter under review was mixed.
While Inflation declined rapidly in most of the high-income
countries, outcomes in developing countries were varied.
Generally, in 2011, commodity price shocks had a major and
sustained
impact
on
inflation,
especially
among
the
industrialized economies. Oil prices surged to near-record
highs, following the cut-off of Libyan crude oil in 2011, driving
both increases in fuel and food prices.

6.3 Global Commodity Demand and Prices
Projections by the World Bank put oil prices at an average of
over US$100/pbl during the fourth quarter of 2011, due to
weakening oil demand, recovery of oil production in Libya,
and surplus conditions in the U.S.
Global commodity prices peaked in early 2011, before it

The global economy
experienced sluggish
growth for most of
2011 due to the
persistence of the
Euro area debt crisis
and continue
protests at the
MENA.


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Economic Report Fourth Quarter

declined in late 2011 due to expected weak outlook in output
of advanced countries and slow demand in emerging
markets. Price of metals declined the most, with agricultural
raw materials having the largest individual fall, especially
cotton and rubber; edible oils such as coconut and palm
kernel oil; and cocoa.

6.4 International Financial Markets
Global financial markets recorded large volatile movement in
the fourth quarter. This development was attributed to the
downgrade
of
U.S.
sovereign
ratings
and
increased
uncertainty as a result of the European debt crisis, which
adversely affected most emerging markets. In addition, the
contagion from high-income countries affected the riskpremium, yields, stock markets, capital flows and currencies of
developing countries.
In the period under review, performance of international
stocks was mixed. In Africa, the Egyptian EGX CSE 30 index lost
the most with 12.4 per cent, while the South African JSE AS
index was the major gainer with an increase of 7.8 per cent.
Nigeria’s AS index had an increase of 1.8 per cent.
In North America, the S&P 500, Mexico Bolsa and the S&P/TSX
Composite indices gained by 11.2, 10.7 and 2.8 per cent,
respectively. In South America, the Argentine Merval index
and Brazilian Bovespa index rose by 18.1 and 8.5 per cent,
respectively, while the Columbian IGBC General index fell by
1.9 per cent.
Europe’s FTSE 100, DAX, CAC 40, and MICEX indices increased
by 8.7, 7.2, 6.0 and 2.6 per cent, respectively, while Asia’s
stock markets did not fare so well, with India’s BSE Sensex,
Japan’s Nikkei 225 and China’s Shanghai Stock Exchange
indices declined by 6.1, 2.8 and 2.3 per cent, respectively.
The performance of the U.S. Dollar against major world
currencies as at end–December 2011 was mixed. In Africa, the
Nigerian
Naira,
Egyptian
Pound
and
Ghanaian
Cedi
depreciated against the U.S. Dollar by 1.36, 1.17 and 2.50 per
cent, respectively; while the South African Rand and Kenyan


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

Economic Report Fourth Quarter

Shilling appreciated against the US dollar by 0.12 and 15.15
per cent, respectively. In Europe, the British Pound remained
stable, the Euro depreciated against the U.S. Dollar by 2.67
percent, while the Russian Ruble appreciated against the U.S
Dollar by 0.12 per cent.

6.5 Other International Economic Developments
and Meetings
Other major international economic developments and
meetings of relevance to the domestic economy during the
review quarter included: the Sixth Ordinary Session of the
ECOWAS Convergence Council of Ministers of Finance and
Governors of Central Banks held in Lome, Togo, on October
14, 2011. The meeting adopted documents to guide the
process for the creation of a single currency in the region.
Also, the Sixth African Economic Conference (AEC) was held
in Addis Ababa from 25th to 28th of October, 2011. The
Conference, with the theme “Green Economy and Structural
Transformation” discussed issues relating to the environment,
climate change and green growth and how they affect
Africa’s future prosperity. Over 40 research proposals and
propositions on political, economic and social issues that
could help African countries to improve their economies
without harming the environment were also reviewed.
Furthermore, the International Monetary fund (IMF) October
2011 Regional Economic Outlook on Sub-Saharan Africa was
released in Washington D.C in October 2011. The outlook
revealed that growth will remain strong as in recent years at
an average of over 5.0 per cent.
The Euro debt crisis driven by events in Greece, Italy and Spain
continued to trouble the Euro area and the global economy.
In a bid to curtail the Euro debt crisis, Euro zone leaders struck
a deal with private banks and insurers in October 2011 to
accept a 50.0 per cent loss on Greek Government bond
holdings and lower Greece’s debt burden.


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Economic Report Fourth Quarter

The 41st Council Meeting of the African Development Bank
(AfDB) was held from November 9 – 10, 2011. At the Meeting,
the Global Environment Facility approved a grant of USD 20.5
million for the Lake Chad Basin Regional Program for
conservation and sustainable use of natural resources and
energy efficiency. The AfDB plans to contribute USD 146 million
to the program, which comprises six projects in Central African
Republic, Cameroon, Niger, Nigeria, Chad and one for the
Lake Chad Basin Commission – (LCBC).
Also, the Seventh Ordinary Session of the Conference of
African Ministers of Trade was held in Accra, Ghana on
November 29, 2011. Issues discussed include intra-African
trade performances, traditional trade with partners outside the
African continent, the non-diversification of African exports
with regard to products, modalities to boost Intra-African
trade, establishment of Continental Free Trade Area (CFTA)
and strengthening of supply capacities.
The inaugural Africa Trade Forum (ATF) 2011 was held in Addis
Ababa on November 22, 2011 with the theme “Accelerating
Intra-African Trade and Enhancing Africa’s participation in
Global Trade”. They discussed specific inputs into the African
Ministerial Conference on Trade, as well as the African Union
Heads of State Summit scheduled for January 2012, on the
theme “Boosting Intra-African Trade”.
Finally, the second meeting of the Working Group of the
Steering Committee of the African Central Bank (ACB) was
held at the Steering Committee Secretariat in Abuja, Nigeria
from December 12 – 16, 2011.


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APPENDIX TABLES


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Economic Report Fourth Quarter

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Economic Report Fourth Quarter

Table A1: Money and Credit Aggregates
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
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
--
--
--
Banks

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

Central Bank

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)

DMBs Demand Deposit with CBN

N billion

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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Economic Report Fourth Quarter

Table A2: Money and Credit Aggregates (Growth Rates)
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
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)


-2.6
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
107.2
3.7
2.9

19.2
1.9
Claims on Non-financial Public Enterprises
--
--
Foeign Asset (Net)

Other Asset (Net)

Total Monetary Assets (M2)


1.1
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)
Q2-09
Q1-10
Q2-10
Q3-10
Q4-10
Q1-11
Retained Revenue

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Crude

Others

Expenditure

Recurrent

Capital

Transfers

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


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