This document is for CBN internal consumption


CENTRAL BANK OF NIGERIA
ECONOMIC REPORT


First Quarter

i

ABOUT THE REPORT

The Central Bank of Nigeria (CBN) Economic Report is a compilation and
analysis of economic developments in Nigeria within the review period. The
Report, which is published on a monthly and quarterly basis, provides
insights into the current developments in the real, fiscal, financial, and
external sectors of the Nigerian economy and the global economic
developments. It also reflects the policy initiatives of the Bank within the
period.

The Report is targeted at a wide range of readers, including economists,
policymakers, financial analysts in government and the private sectors,
and the general public. Free copies of the Report, both current and past
issues, can be obtained from the CBN website: www.cbn.gov.ng. Please
direct all publications inquiries to the Director, Research Department,
Central Bank of Nigeria, P.M.B. 187, Garki, Abuja, Nigeria.


Contents


iii

Tables
Table 6: Federally-Collected Revenue and Distribution to the Three-Tiers
Table 10: Money and Credit Growth over preceding December (Per cent)
Table 13: Listings on the Nigerian Stock Exchange at end-March 2022 .. 36

Figures
Figure 3: Inflation Rates in Selected Advanced Economies, Average (per
Figure 12: Top 19 Subsectors with largest Contribution to GDP Growth
Figure 13: Subsectors with Least Contribution to GDP Growth and their
Figure 16: Federal Government Expenditure (₦ Billion) First Quarter


iv

Figure 31: Secondary Income Balance and Remittances Inflow (US$
Figure 33: Foreign Exchange Transactions through the Bank (US$ Billion)
Figure 34: Foreign Exchange Sales to Authorised Dealers (US$ Billion) .. 45

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EXECUTIVE SUMMARY
Global economic activity slowed in 2022Q1, due, mainly, to geopolitical
tensions in Europe, residual impact of COVID-19, tight financial conditions,
and slowdown in China. In Advanced Economies (AEs), the performance of
economic activity was mixed. The PMI in most AEs, though declined,
remained above the threshold of 50.0 index points, except in Japan.
Economic performance in Emerging Market and Developing Economies
(EMDEs) slowed because of the Russian-Ukraine war and the restrictions
following the increased incidence of COVID-19 infections, especially from
the Omicron variant. Inflation developments in the selected countries
continued to rise because of the sanctions imposed on Russia and various
trade blockades that worsened supply-chain disruptions. The global
financial market indices experienced increased volatility from geopolitical
tensions and rising inflationary pressures. Total world crude oil production
increased as OPEC+ supply rose in line with the continued implementation
of the production agreement, while crude oil spot prices rose on account
of supply hiccups, associated with Russia-Ukraine conflicts.
On the domestic front, the economy grew, for the sixth consecutive
quarter after the COVID-19 pandemic-triggered recession in the second
half of 2020, driven by continued fiscal and monetary interventions. Real
GDP grew by 3.11 per cent (y-on-y) in 2022Q1, compared with 3.98 per
cent in the preceding quarter, driven by the non-oil sector, which grew by
6.08 per cent, and accounted for 93.37 per cent of economic activities.
However, the oil sector contracted by 26.04 per cent, thus constituting a
drag on the overall growth. Inflationary pressures heightened, due to
increase in non-food components, such as logistics and transportation
costs, arising, mainly from the disruptions in the supply of petroleum
products. Thus, the headline inflation, (y-on-y), increased to 15.92 per cent,
from 15.63 per cent, in 2021Q4. In the same vein, core inflation (y-on-y)
rose marginally to 13.91 per cent in 2022Q1, from 13.87 per cent in the
previous quarter. On the other hand, food inflation moderated to 17.20 per
cent (y-on-y) in 2022Q1, compared with 17.37 per cent in 2021Q4,
attributed to the effect of CBN and government stimuli that supported the
increased supply of processed farm produce. The Bank continued its
intervention programmes in critical sectors to boost output and address
structural rigidities in the economy.
Fiscal conditions in 2022Q1 improved, relative to the preceding quarter,
as the fiscal deficit narrowed by 11.8 per cent. The improvement was
enabled by the 12.6 per cent rise in FGN retained revenue, driven, majorly,
by strong performance of FGN Independent Revenue and improved
management of resources. However, relative to proportionate targets,
aggregate expenditure of the FGN fell by 3.1 per cent and 35.5 per cent,

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ECONOMIC REPORT, FIRST QUARTER 2022

relative to 2021Q4 and the benchmark for 2022Q1, respectively. The FGN
share of total public debt remained within sustainable thresholds, at
N35,097.79 billion or 19.9 per cent of GDP, as at end-March 2022.
Monetary and financial developments in 2022Q1 reflected the underlying
growth in broad money and credit. The Bank continued to promote growth
and productivity in the real sector by ensuring credit availability at an
affordable cost. Monetary conditions eased with the growth of broad
money, increased credit supply, and decreased money market rates. Broad
money supply (M3) grew by 4.19 per cent, driven, mainly by the increase
in domestic claims, particularly claims on central government and public
non-financial corporations. In response to increased banking system
liquidity, key money market rates declined, while long-term interest rates
remained relatively stable. Overall, the financial sector remained stable, as
the key financial soundness indicators were within regulatory thresholds,
while activities on the Nigerian Exchange Limited (NGX) sustained a bullish
run, on the back of portfolio switching from fixed-income investments to
equities and eased financial conditions.
The Russia-Ukraine conflict that disrupted global economic activities led to
a surge in international crude oil prices and helped improve Nigeria’s trade
balance. Consequently, the current account recorded an impressive surplus
of US$2.58 billion, compared with US$0.05 billion in the preceding quarter,
attributed largely to improved export earnings. However, the financial
account posted a lower net acquisition of financial assets of US$0.78 billion
(0.7 per cent of GDP), compared with US$5.15 billion (4.3 per cent of GDP)
in 2021Q1, reflecting higher incurrence of financial liabilities. External
reserves stood at US$39.28 billion, at end-March 2022, relative to
US$40.23 billion, at end-December 2021, and could cover 6.4 months of
import of goods and services or 8.4 months of import of goods only. The
naira exchange rate remained relatively stable at the I&E window, relative
to the preceding quarter.
On the outlook, the performance of the global economy is expected to
slow significantly in 2022, a consequence of shocks induced by the RussiaUkraine conflict, amidst elevated global inflation. On the domestic front,
the economy is expected to sustain its positive growth trajectory in the
near term, while inflation aligns with the global trend. The fiscal outlook
for the near term is less optimistic, as government revenue remains
impaired by PMS subsidy burden and lower-than-expected crude oil
production. The outlook of the external sector is moderately optimistic, due
to the prospect of higher external reserves, arising from favourable crude
oil prices.


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1.0
GLOBAL ECONOMIC DEVELOPMENTS
1.1
Global Economic Activity
Global economic activity slowed due to geopolitical tensions in Europe that
disrupted supply chains. The average J.P. Morgan Global Composite
Purchasing Manager’s Index (PMI), declined by 2.03 index points to 52.50
index points in 2022Q1 (see Table 1). Delays in the supply chain and
heightened inflationary pressures slowed the manufacturing sector's
output in major economies and reduced global trade flows. Consequently,
the manufacturing and services PMI declined to 53.27 index points and
52.90 index points, from 54.23 index points and 55.27 index points, in
2021Q4, respectively. This was attributed to rising input costs and
geopolitical tensions hampered producers’ confidence, especially in
Eastern Europe. Consequently, the employment level declined to 52.00
index points from 52.57 index points in the preceding quarter, due to a
drop in the backlog of works.
Table 1: Global Purchasing Managers' Index (PMI)


Sources: JP Morgan, IHS Markit

2021Q3
2021Q4
2022Q1
Composite
53.87
54.53
52.50
Manufacturing
54.53
54.23
53.27
Services (Business Activity)
54.30
55.27
52.90
Employment Level
51.93
52.57
52.00

The performance of Advanced Economies (AEs) was mixed. The PMI in
most AEs, though declined, remained above the threshold of 50.0 index
points, except in Japan. Economic activities in the UK improved slightly as
the PMI rose to 58.33 index points from 57.93 index points in 2021Q4,
supported service expansion. However, in the United States, the PMI
declined to 54.0 index points, from 58.1 index points in 2021Q4, due to a
surge in COVID-19 infections in the winter that worsened labour
shortages. Similarly, Germany and Italy recorded weak expansion, as their
PMIs declined to 55.4 index points and 51.9 index points, from 57.5 index
points and 62.0 index points, respectively, in 2021Q4. Also, economic
activities in Japan contracted, as composite PMI fell to 48.3 index points
from 54.0 index points in 2021Q4, due to a rapid increase in average cost
arising from the increase in aggregate input prices.
.

Economic activity in
Advanced
Economies
Global Economic
Conditions

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Figure 1: Selected Advanced Economies’ PMIs (Index Points)

Sources: Trading Economics/Various countries’ websites

Activities in Emerging Market and Developing Economies (EMDEs) slowed
due to the effect of the Russian-Ukraine war and the restrictions, following
the increased incidence of COVID-19 infections, especially from the
Omicron variant. In India, economic expansion was slower in 2022Q1
relative to the preceding quarter, as the PMI fell to 53.6 index points, from
56.3 index points, due to the new wave of COVID-19 cases in the period.
Economic activities in Turkey slowed marginally to 50.1 index points, from
51.8 index points, due to a reduction in new orders, attributed to
continued inflationary pressures arising from currency depreciation. In
China, economic activities contracted as the PMI fell to 48.0 index points,
from 50.5 index points in the preceding quarter, owing to a steep decline
in business activities in the manufacturing and services sectors. This was
attributed to the resurgence of COVID-19 infections and erosion of
business confidence induced by the war in Ukraine. Economic activities in
Nigeria moderated slightly, as the PMI slowed to 55.0 index points, from
55.2 index points in the preceding quarter due to elevated price pressures
that dampened demand and adversely affected new orders. However,
economic activities in South Africa expanded slightly as the PMI improved
to 51.1 index points from 49.6 index points in the previous quarter.
Economic activity increased due to improved demand and a reduction in
COVID-19 cases.


US
UK
Germany
Italy
Japan
2021Q3
2021Q4
2022Q1
50-point Threshold

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Figure 2: PMIs in Selected EMDEs (Index Points)

Sources: Trading Economics and Various countries’ websites

1.2
Global Inflation
Inflation continued to rise in 2022Q1, due to the sanctions imposed on
Russia and the various trade blockade that worsened supply-chain
disruptions. In most Advanced Economies (AEs), monetary authorities
struggled to contain rising inflation in the face of fragile economic
recovery. The headline inflation rate in the US rose to a 40-year high. It
stood at 7.95 per cent in 2022Q1 compared to 6.67 per cent in 2021Q4.
The surge was driven, mainly, by rising energy and food prices amid
supply-demand imbalances. In Germany, consumer prices hit an average
of 5.77 per cent, from 5.01 per cent in the previous quarter, with the
Russia-Ukraine war driving higher prices of heating oil, motor fuels and
natural gas, as well as food products. Similarly, inflation in the UK surged
to 6.23 per cent, from 4.70 per cent in 2021Q4, attributed to pressure on
transport, furniture and household services, as well as clothing and
footwear. In Japan, the sharp rise in food prices, coupled with the rising
cost of fuel, electricity, and water charges, led to a rise in inflation to 0.87
per cent from 0.50 per cent in the previous quarter.


China
India
Turkey
South Africa
Nigeria
2021Q3
2021Q4
2022Q1
50-point Threshold
Global Inflation

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Figure 3: Inflation Rates in Selected Advanced Economies, Average (per cent)

Source: OECD
Note: US, UK, JP, CDN, GM, FRN and IT represents United States, United Kingdom, Japan,
Canada, Germany, France, and Italy, respectively

Inflationary pressures remained elevated in most Emerging Market and
Developing Economies (EMDEs). In India, headline inflation averaged 6.34
per cent, compared with 4.99 per cent in the fourth quarter of 2021,
driven, mainly, by rising prices of essential food items owing to disruptions
in the global supply chain. Also, in Mexico, price pressure persisted despite
the continuous monetary tightening by the Bank of Mexico, as headline
inflation inched up to 7.27 per cent from 6.99 per cent in the previous
quarter. The increase was triggered by a surge in food, beverages, tobacco
and housing prices. South Africa also recorded an uptick in headline
inflation, as consumer prices rose to 5.77 per cent from 5.48 per cent in
the fourth quarter of 2021. Increased transportation, food and nonalcoholic beverage prices accounted for the increased inflation. In Turkey,
inflation soared to 54.76 per cent from 25.76 per cent as prices of utilities
increased and the domestic currency depreciated. Conversely, China’s
inflation declined to 1.10 per cent from 1.77 per cent in the fourth quarter
of 2021, as the cost of food, particularly pork, continued to fall.


US
UK
JP
CND
GM
FRN
IT
Q1-2021
Q4-2021
Q1-2022

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Figure 4: Average Inflation Rates in Selected EMDEs (per cent)

Source: OECD
Note: CHN, IND, IN, MEX, TUR ,SA and NIG represents China, India, Indonesia, Mexico,
Turkey, South Africa, and Nigeria, respectively.

1.3 Global Financial Markets
Geopolitical tensions in Europe and rising inflationary pressures
increased volatility in global financial market indices. Financial markets
across the globe were adversely affected as equity markets declined and
bond yields rose. In the US, the NASDAQ, S&P500 and Dow Jones stocks
declined by 8.89 per cent, 4.95 per cent and 4.57 per cent, respectively,
due to the sanctions imposed on Russia. Similarly, the NIKKEI 225, declined
by 3.37 per cent in 2022Q1, following tight financial conditions induced by
the war in Ukraine and the restrictions aimed at stemming the rising cases
of COVID-19 in Hong Kong and China.
Stock market performance in Europe was mixed as equities of the EURO
STOXX50 dipped by 9.21 per cent as a result of shocks from the RussiaUkraine war. However, in the UK, large capital equities, tracked by the
FTSE 100 index, rose by 1.78 per cent in 2022Q1, driven by improvements
in the oil, mining, healthcare and banking sectors. Also, the geopolitical
tensions in Europe led to a mixed performance of financial markets in
EMDEs as Egypt’s EGX case 30 declined by 2.19 per cent, while Nigeria’s
NSE gained 9.95 per cent.


CHN
IND
IN
MEX
TUR
SA
NIG
Percentage
Q1-2021
Q4-2021
Q1-2022

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Figure 5: Global Stock Market Equity Indices

Source: Bloomberg
Government bond yields rose sharply on the back of the hawkish
monetary policy stance adopted by most central banks. The magnitude of
change in bond yields across markets was diverse. The US 10-year
Treasury yield rose from 1.51 per cent to 2.35 per cent, following the Fed’s
implementation of a 25 basis-point rate hike. The UK 10-year yield rose
from 0.97 per cent to 1.61 per cent following two-time rate hikes over
concerns about the economic outlook and higher cost of living. Also, in
Germany and Italy, 10-year treasury bond yields increased from -0.18 per
cent and 1.18 per cent to 0.55 per cent and 2.04 per cent, respectively.
Figure 6: 10-Year Government Bond Yields, 2021Q4 and 2022Q1

Source: Bloomberg

The performance of emerging market currencies against the US dollar was
mixed during the review period. The South African rand and Chinese RMB
appreciated by 1.0 per cent and 0.7 per cent, respectively, relative to the
levels in the preceding quarter. However, the Russian rouble depreciated
against the dollar by 18.4 per cent, in the first quarter of 2022.


S&P500
FTSE100
Nasdaq-100
Dow Jones
EURO
STOXX50
NIKKEI 225
TOPIX
DAX
NGSEINDX
EGX30
2021Q4
2022Q1
-2

US
CANADA
GERMANY
EURO AREA
UK
FRANCE
JAPAN
CHINA
BRAZIL
2021Q4
2022Q1

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Figure 7: EMEs Currency Values to the US dollar
Sources: Central Bank Nigeria & Reuters

Table 2: EMDEs Currency Rates to the US dollar
Period
Chinese RMB
Nigerian
Naira
South African
Rand
Russian
Rubble
2021Q1
6.48

14.96
74.45
2021Q4

2022Q1

Sources: Central Bank of Nigeria & Reuters

1.4 Central Banks’ Policy Rates
Tight monetary policy stance remained dominant as central banks aimed
to contain rising inflationary pressure, in the face of fragile economic
recovery. The US Fed embarked on incremental monetary tightening,
increasing the Fed rate for the first time in three years, and reducing asset
holdings. Similarly, the Bank of England raised the benchmark interest rate
by 0.25 percentage points, to 0.75 per cent from 0.50 per cent during the
quarter. The Bank of Mexico continued monetary tightening during the
quarter, raising the rate by 100 basis points (cumulative), to 6.5 per cent,
to rein in the inflationary pressures from the Russia-Ukraine conflict.
Conversely, China continued a dovish monetary stance, bringing down the
rates to 3.75 per cent, from 3.85 per cent in the previous quarter.
However, Central Banks of Japan, Canada, Euro Area, India and Nigeria,
among others, retained their policy rates.


Chinese RMB
Nigerian Naira
South African Rand
Russian Ruble
Depreciation/Appreciation
Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022

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Table 3: Central Bank Policy Rates (Per cent)
Country
2021Q2
2021Q3
2021Q4
2022Q1
United States

United Kingdom

Japan

Canada

Euro Area

China

India

Mexico

Indonesia

Turkey

South Africa

Ghana
13.5
13.5
14.5

Nigeria

Source: Various Central Banks’ websites.
1.5
Global Oil Market
World crude oil production increased in 2022Q1, as OPEC+ supply rose in
line with the continued implementation of the production agreement. The
total world crude oil supply increased by 0.08 per cent to 92.40 million
barrels per day (mbpd) in 2022Q1, from 92.33 mbpd in the preceding
quarter. The increase was driven, largely, by supply from non-OECD
producing countries, particularly the OPEC+ countries, following the
continued implementation of the agreement to increase average monthly
production by 400,000 bpd up to March 2022.
OPEC’s aggregate production, including non-crude liquids, rose by 0.97
per cent to 30.24 mbpd in 2022Q1, from 29.95 mbpd in the preceding
quarter. The rise was driven, mainly, by OPEC’s crude portion, which
increased by 200,000 bpd to 25.08 mbpd. The main drivers of the increase
in OPEC crude supply were Saudi Arabia, Kuwait, and United Arab Emirates
(UAE). The non-crude portion increased by 90,000 bpd to 5.16 mbpd.
On the demand side, total world demand declined by 0.57 per cent to
94.09 mbpd in 2022Q1 from 94.63 mbpd in the preceding quarter. Global
crude oil demand declined as lockdown measures resurfaced in China over
the new wave of the COVID-19 pandemic. Overall, the global oil market
recorded a narrower supply deficit of 1.69 mbpd in 2022Q1, compared
with the deficit of 2.3 mbpd in the preceding quarter.
Domestic crude oil production and export remained unchanged, quarteron-quarter, driven by the force majeure declared by Shell and Eni on the
export of Bonny Light and Brass crude oil grades, respectively. Nigeria’s
average crude oil production (including Agbami crude) and export
remained unchanged at 1.45 mbpd and 1.00 mbpd, respectively as
World Crude Oil Supply
and Demand
Domestic Crude Oil
Production
and Export

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Nigeria’s production levels fell short of its OPEC quota by about 270,000
bpd in 2022Q1. Force majeures declared on Bonny and Brass terminals
over increased cases of explosions and pipeline vandalism, affected
production levels in 2022Q1. In addition, some International Oil
Companies (IOCs) decided to sell off some of their assets in the upstream
sector because of rising operational costs due to insecurity, agitations
from host communities and the destruction of oil pipelines, which
impacted Nigeria’s output level negatively.
Crude oil spot prices rose sharply in 2022Q1, owing to supply uncertainties
in the global oil market on account of sanctions imposed on Russia over its
invasion of Ukraine. The average spot price of Nigeria’s reference crude
oil, the Bonny Light (34.9° API), rose by 29.05 per cent to US$103.81 per
barrel (pb) in 2022Q1, compared with US$80.44 pb in the preceding
quarter. The prices of Brent, at US$104.15 pb, Forcados at US$103.85 pb,
WTI at US$96.42 pb and OPEC Reference Basket (ORB) at US$98.29 pb all
exhibited similar trends (Figure 8). The rise in crude oil prices was
attributed, largely, to investors’ concern about supply disruptions in the
global crude oil market on account of sanctions imposed on Russia by the
US and other countries in Europe over its invasion of Ukraine. In addition,
some OPEC members, including Nigeria, could not meet their OPEC
production quotas.

Figure 8: Crude Oil Prices for 2022Q1 (US$ per barrel)

Source: Reuters Data

Average spot prices of gold, silver and platinum increased in 2022Q1,
except for the price of palladium. The average spot prices of gold, silver
and platinum rose by 3.52 per cent, 2.96 per cent and 2.99 per cent,
quarter-on-quarter, to sell at US$1,878.12 per ounce, US$24.02 per ounce

Q1 2021
Q2 2021
Q3 2021
Q4 2021
Q1 2022
Bonny Light
Brent
Forcados
WTI
OPEC Refernce Basket
Crude Oil Prices
Other Mineral
Commodities

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ECONOMIC REPORT, FIRST QUARTER 2022

and US$1,026.61 per ounce, respectively, compared with US$1,814.20
per ounce, US$23.33 per ounce and US$996.79 per ounce in the
preceding quarter. However, the price of palladium declined by 2.43 per
cent, to sell at US$2,325.43 per ounce, compared with US$2,383.32 per
ounce in the preceding quarter (Figure 9). Gold, silver, and platinum prices
rose as investors sought safe-haven assets to guard against the negative
impact that sanctions imposed on Russia could have on the world
economy. The price of palladium, which is majorly used in car catalytic
converters, declined following a semi-conductor chip shortage.
Figure 9: Price Changes in Selected Metals (per cent) for 2022Q1

Source: Refinitiv Eikon (Reuters)

1.6 Global Commodity Market
Prices of most agricultural export commodities maintained an upward
trend in 2022Q1, fuelled largely by tighter supply conditions.
Consequently, the average price index for all the monitored commodities
rose by 8.5 per cent to 100.85 index points from 92.99 index points in the
previous quarter. This was driven by increased prices of soya beans, palm
oil, cotton, and wheat by 19.9 per cent, 18.4 per cent, 13.1 per cent, and
12.6 per cent, respectively. Other monitored commodities that recorded
increases were rubber and cocoa, which increased by 2.2 per cent and 1.8
per cent, respectively. The development was driven largely by the RussiaUkraine war, labour shortages and adverse weather conditions in key
producing countries.
Of note, the higher wheat price was influenced by the Russia-Ukraine
crisis, which obstructed production and supply. Similarly, the early frost in
the farming belts of the world’s largest producer, Argentina, hampered
the soya bean production. Furthermore, cotton and palm oil witnessed
price increases during the quarter due to poor weather conditions and
labour shortages, respectively, amid higher market demand.

Gold
Silver
Platinum
Palladium
With corresponding quarter
With preceding quarter
Agricultural Commodity
Prices

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Increased demand for rubber and allied products, especially tyres, and
adverse weather conditions drove rubber prices. Similarly, the same
factors induced price increases for cocoa and chocolate-based
confectionaries. However, the price of groundnut and coffee decreased
by 2.2 per cent and 1.2 per cent, respectively, compared with the previous
quarter, largely, on the back of increased supply.
Table 4: Selected Agricultural Export Commodities, 2022Q1
Indices of Average World Prices of Nigeria's Major Agricultural Export
Commodities for 2022Q1 (in dollars; Jan 2010=100)
COMMODITY
2021Q1
2021Q

2022Q

% Change

(1) & (3)
(2) & (3)

All Commodities


Cocoa


Cotton


Coffee


Wheat


Rubber


Groundnut


Palm Oil


Soya Beans


Source: World Bank Pink Sheet


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2.0 DOMESTIC ECONOMIC DEVELOPMENTS
2.1 REAL SECTOR DEVELOPMENTS
The economy grew for the sixth consecutive quarter, after the COVID-19
pandemic-triggered recession that occurred in the second half of 2020.
Sustained growth was driven by continued fiscal and monetary interventions
in the economy, particularly in the real sector. Real GDP grew by 3.11 per cent
(y-o-y) in 2022Q1, compared with 3.98 per cent in the preceding quarter. The
growth was driven by the non-oil sector, which grew by 6.08 per cent, and
accounted for 93.37 per cent of economic activities within the quarter.
However, the oil sector contracted by 26.04 per cent, thus weighing down
growth outcomes.
Figure 10: Real GDP Growth Rate, 2020Q1-2022Q1

Source: National Bureau of Statistics

2.1.1 Sectoral Performance
The Services and Agriculture sectors grew, in real terms, in 2022Q1, while the
Industry sector contracted. The Services sector contributed the most (4.02
per cent) to the growth in overall output, growing by 7.45 per cent (y-on-y).
The growth witnessed was higher than the 5.58 per cent in the previous
quarter. The Services sector's performance was mainly driven by Finance and
Insurance, Information and Communication Technology (ICT), Trade and
Human Health & Social Services subsectors, which grew by 23.24 per cent,
12.07 per cent, 6.54 per cent and 5.91 per cent, respectively. The observed
performance of the sub-sectors was attributed to the early implementation
of the 2022 fiscal appropriation act, increased activities in finance and
insurance, replacement of depleted stocks after the festive season, and
increased usage of online platforms for businesses.

2020Q1
2020Q2
2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
Per cent
Oil GDP
Non-oil GDP
Total GDP
Domestic
Output

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Figure 11: Sectoral Growth Rate of Real GDP, 2020Q1-2022Q1
Source: National Bureau of Statistics (NBS)

The Agriculture sector grew by 3.16 per cent, compared with 3.58 per cent in
the preceding quarter. The slower growth in agriculture was due, mainly, to
seasonal factors (planting and restocking of livestock), which are not
associated with harvests. Analysis of the sector shows that crop production,
livestock, forestry, and fishery subsectors grew by 2.97 per cent, 5.55 per
cent, 1.37 per cent and 3.14 per cent, respectively, compared with 3.87 per
cent, 0.41 per cent, 1.41 per cent and a negative 3.97 per cent, in the
preceding quarter.

The Industry sector contributed negatively to real GDP growth. It contracted
by 6.81 per cent in 2022Q1, compared with a contraction of 0.05 per cent in
2021Q4. The observed trend was due to the poor performance of the Mining
and Quarrying subsector, occasioned by the contractions in Crude Petroleum
and Natural Gas, Coal mining and quarrying and other Minerals subsectors,
by 26.04 per cent, 12.97 per cent and 13.72 per cent, respectively. The
development in the Crude Petroleum and Natural Gas sub-sector was due to
lower crude oil production provided by the National Bureau of Statistics at
1.49 mbpd in 2022Q1, compared with 1.72 mbpd in 2021Q1, notwithstanding
higher crude oil prices in the quarter. This was attributed to the persisting
damages to some key pipelines and terminals, the frequent shut-in, and the
force majeure, declared on Bonny and Brass terminals over increased cases
of pipeline vandalism.


2020Q1
2020Q2
2020Q3
2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
Per cent
Agriculture
Industry
Services
Total GDP

16 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

Figure 12: Top 19 Subsectors with largest Contribution to GDP Growth and Growth Rates

Source: National Bureau of Statistics

Figure 13: Subsectors with Least Contribution to GDP Growth and their Growth Rates

Source: National Bureau Statistics

2.1.2 Index of Industrial Production (Quarter on Quarter)
Industrial activities improved in the first quarter of 2022 on the back of the
sustained economic recovery, increased manufacturing, and mining
activities. The index of Industrial Production, at 102.3 (2010=100), showed
a 13.7 per cent increase, compared with 90.0 points in the fourth quarter
of 2021. This development was driven by improvement in manufacturing
and crude petroleum and natural gas output.
Mining sector activities increased in the review period. At 59.3
(2010=100), the mining production index in 2022Q1 rose by 27.5 per cent,
from the 49.5 index points in 2021Q4. The increase in mining activities was

(3.73%)Administrative and Support Services
(1.37%)Forestry
(2.30%)Arts, Entertainment & Recreation
(1.93%)Accommodation and Food Services
(3.14%)Fishing
(13.22%)Water supply, sewage, waste Mang.
(1.92%)Public Administration
(1.87%)Education
(5.91%)Human Health & Social Services
(1.85%)Professional, Scientific & Technical Serv.
(5.55%)Livestock
(3.14%)Other Services
(4.83%)Construction
(4.44%)Real Estate
(2.97%)Crop Production
(5.89%)Manufacturing
(23.24%)Financial and Insurance
(6.54%)Trade
(12.07%)Information and Communication

(-11.20%) Electricity,Gas,Steam & Air
conditioner
(-17.41%) Transportation and Storage
(-25.89%) Mining and Quarrying

Industrial Production
Mining

17 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

driven mainly by improved crude petroleum and natural gas, and metal
ores output
At 202.1 (2010=100), the manufacturing production index increased by
9.4 per cent above the 184.8 points in the preceding quarter. The
improvement was attributed to increased domestic demand, which
propelled production activities. Furthermore, modest improvement in
business and consumer confidence contributed to the rise in
manufacturing activities.
Similarly, the estimated average capacity utilisation at 55.4 (2010=100)
increased by 0.3 percentage points from the 55.1 per cent in the
preceding quarter. The rise in capacity utilisation resulted from an
increase in manufacturing activities.
The performance of the energy sector waned, with the fall in electricity
generation leading to the breakdown in the national grid during the
quarter. Shortage in gas supply to the thermal stations and low water level
at the hydro generation stations contributed to the decrease in electricity
generation. Vandalism of transmission and distribution infrastructure also
led to the decline in energy sector performance. Thus, the estimated
average electricity generation in 2022Q1 decreased to 3,380.7 MW/h
from 4,379.11 MW/h in the previous quarter, reflecting a decline of 22.8
per cent.

Similarly, the estimated average electricity consumption decreased to
2,885.45 MW/h for 2022Q1, compared with 3,408.65 MW/h in the
preceding quarter, a decline of 15.4 per cent.
2.1.3 Consumer Prices
Headline inflation rose in 2022Q1, attributed to the increase in the nonfood components. Headline inflation (y-on-y) increased to 15.92 per cent,
from 15.63 per cent in 2021Q4. The rise in headline inflation was
attributed to logistics and transportation costs, due, mainly, to the
disruptions in the supply of petroleum products, such as Premium Motor
Spirit (PMS), diesel and aviation fuel. The persisting security challenges in
some parts of the country, also contributed to the uptick in inflation
during the period.


Electricity Generation
Electricity Consumption
Manufacturing
Capacity Utilisation
Headline
Inflation

18 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022


Figure 14: Headline, Food and Core Inflation (y-o-y)

Source: NBS

Core inflation rose marginally to 13.91 per cent in 2022Q1, from 13.87 per
cent in the previous quarter. The increase in core inflation was driven by
rise in the cost of manufacturing inputs, due to the rise in
transportation/logistic costs arising from the disruption in the supply of
petroleum products. Also, disruptions to the global commodities supply
chain due to the invasion of Ukraine by Russia and persisting internal
security issues in the country further exacerbated inflationary pressures.
Food inflation moderated to 17.20 per cent (y-on-y) in 2022Q1, compared
with 17.37 per cent in 2021Q4. The moderation in food inflation was
attributed to the effect of CBN and government intervention stimuli that
supported an increased supply of processed farm produce, particularly,
tubers, maize, millet, yellow garri and sorghum.
2.1.4 Socio-Economic Developments
The rate of new infections and the number of active cases of COVID-19
continued to decline, following increased awareness and compliance with
pandemic prevention protocols. Data from the National Primary Health
Care Development Agency (NPHCDA) showed that 17.2 per cent of the
eligible target population had received the first dose of the COVID-19
vaccine at end-March 2022, compared with 9.2 per cent in the previous
quarter. Similarly, about 11.2 per cent of the target population had
received the second dose of the vaccine, compared with 4.0 per cent in
the previous quarter.
Data from the Nigeria Centre for Disease Control (NCDC) also showed that
at end-March 2022, the rate of increase of confirmed cases declined by

Per cent (%)
Headline
Core
Food
Health
Food
Inflation
Core
Inflation

19 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

5.4 per cent, relative to 17.8 per cent in the preceding quarter of 2021
(Figure 15). The rate of discharge rose by 16.5 per cent, while the rate of
COVID-19-related deaths declined by 3.7 per cent. Furthermore, the rate
of active cases declined by 89.2 per cent, relative to the preceding quarter.

Figure 15: COVID-19 Statistics

Source: NCDC

During the review period, the Japanese Government donated 859,600
doses of AstraZeneca COVID-19 vaccines to Nigeria, through the COVID19 Vaccines Global Assess Facility, COVAX. It also donated 175 Solar Direct
Drive (SDD) refrigerators to aid the COVID-19 response, deployed to states
across the Federation. Futhermore, the Nigerian Government received 3.2
million doses of Pfizer COVID-19 vaccines donated by the United States
and one million doses of the Johnson and Johnson (J&J) COVID-19 vaccine
by the Government of Greece.
In response to the Lassa Fever outbreak in some parts of the country, the
NCDC activated the national multi-sectoral and multi-disciplinary Lassa
Fever Emergency Operations Centre (EOC). So far, suspected cases have
risen to 3,542, while confirmed cases are 681 (Ondo, Edo and Bauchi
States account for 67.0 per cent). Total deaths as at March 27, 2022 was
127.
In collaboration with the private sector, the Federal Government unveiled
plans for developing Information, Education and Communication (IEC)
materials for de-worming over 10 million Nigerian students in Primary 1
to 6, under the National Home-Grown School Feeding Programme
(NHGSFP). The nationwide de-worming campaign, through mass
administration of Praziquantel (PZQ) tablets in schools and communities,

2020Q4
2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
Total Confirmed Cases
Discharged Cases

20 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

was implemented by the Federal Ministry of Humanitarian Affairs,
Disaster Management and Social Development in collaboration with the
Federal Ministry of Health.
The Federal Government granted approvals for the completion of roads
and bridges across the country. Some of these include: the realignment of
the Kano State border Birnin Kudu-Bauchi State border road for the total
sum of N10.1billion; the reconstruction of a bridge at Pada Road in Kogi
State for the sum of N4.7 billion; the construction of the Kaiama-Kishi Road
in Kwara and Oyo States for the sum of N24.1 billion; and the
reconstruction of a bridge along Ihugh-Damkori-Vandeikya-General
hospital junction-Ogoja Road in Benue and Cross River States for the sum
of N4.1 billion. These projects would provide access to the communities,
facilitate the movement of goods and services and enhance the socioeconomic well-being of citizens in the areas.
The Federal Executive Council (FEC) approved the sum of ₦92.12 billion
for the construction of a second runway at the Nnamdi Azikiwe
International Airport, Abuja and is expected to be completed in 12
months. In addition, the FEC approved the sum of N3.52 billion for projects
at the Abuja, Lagos and Kano international airports. These include the
supply and installation of two sets of high-capacity passenger security
screening systems for the Murtala Muhammed International Airport,
Lagos and Nnamdi Azikiwe International Airport, Abuja, for the sum of
N1.19 billion, as well as the supply and installation of airfield ground
lightning materials for the three airports for the sum of N2.33 billion. In
the same vein, FEC approved N9.4 billion for the continuation of works on
the Zaria-Funtua road linking Kaduna and Katsina States; the sum of N6.27
billion for the rehabilitation of the Kwayakusar-Milda Road in Borno State;
and N13.0 billion for the rehabilitation of the Uturu-Isikwato-Akara Road
in Abia State.
Six Nigerian Airlines - Air Peace, Azman Air, United Nigeria, Arik Air, Aero
Contractors and Max Air- signed a deal to form an alliance called Spring
Alliance to reduce disruptions to flight schedules and improve service
delivery. The alliance seeks to curb flight delays and provide technical
support to the six partner airlines. It will ensure that any member airlifts
passengers, irrespective of which partner airline ticket the passengers
possess.
As part of efforts toward poverty eradication and sustenance of the
National Social Investment Programmes (NSIPs), the Federal Government,
in collaboration with the CBN, flagged off the NEXIT/CBN Agri-Business
Small and Medium Enterprises Investment Scheme (AGSMEIS) for exited
Transportation
Aviation

Empowerment/
Employment

21 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

N-Power beneficiaries. Consequently, of the 400,000 trainees who
indicated interest, 75,600 would participate in the first phase of the
orientation programme, and would be eligible to access loans of up to
N3.0 million from the CBN.
2.1.5 Development Financing
The Bank sustained her intervention initiatives during the first quarter of
2022 as a total of N564.88 billion was disbursed as at March 22, 2022 to
critical sectors/segments of the economy (Manufacturing/Industry,
Energy/Infrastructure, Agriculture, Services, MSMEs, Export, and Health).
In terms of share per total, the Industrial sector got the highest with 81.04
per cent of the total amount disbursed, driven largely by the RSSF using
Differentiated Cash Reserve Ratio (RSSF-DCRR) segment as the main
intervening window. This was followed by the Agriculture sector with 8.64
per cent share per total, the manufacturing/energy segment with 4.72 per
cent, MSMEs (4.07 per cent) and, Health with 1.50 per cent share per total
disbursement.
Table 5: Intervention Funds, as of 22, March 2022
Sector
22-MAR

Cumulative
Disburs
(N'bn)
Share
(%)
Beneficiaries

Disburs.
(N'bn)
Share (%)
Agriculture
48.82
8.64


1710.78
64.34
Anchor Borrowers'
Programme
29.67
5.25
3 commodities

975.61
36.69
N200 Billion Commercial
Agricultural Credit
Scheme (CACS)
19.15
3.39
N.A

735.17
27.65
Energy/Infrastructure
26.75
4.72


275.13
10.35
Nigeria Electricity
Market Stabilization
Facility 2 (NEMSF 2)
12.64
2.23
DisCos

232.93
8.76
Nigeria Bulk Electricity
Trading-Payment
Assurance Facility
(NBET-PAF)
11.11
1.96
Power sector
players

-
-
Infrastructure facility for
National Gas Expansion
Programme (IFNGEP)
3.00
0.53
Procurement
and Installation
of 25,489
meters

42.20
1.59
MSMEs
22.98
4.07


526.42
19.80
Tertiary Institutions
Entrepreneurship
Scheme (TIES)
0.26
0.05
N.A

0.293
0.01
Targeted Credit Facility
(TCF)
AGSMEIS

N.A
Agri-Biz


Industries
457.82
81.04


29.51
1.11
100-FOR-100 PPP
29.51
5.22
-

29.51
1.11
RSSF Using
Differentiated Cash
Reserve Ratio (RSSFDCRR)
428.31
75.82
-

-
-
Health
8.514
1.50


116.91
4.39
Health Care Sector
Intervention Fund (HSIF)
HSRDIS
8.50

0.014
1.50

0.00
-


116.72

0.187
4.39

0.0
Total
564.88

2658.75

Source: Central Bank of Nigeria


22 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

2.2 FISCAL SECTOR DEVELOPMENTS
The fiscal operations of government in the review period remained
anchored on the 2022 Appropriation Act and the 2022-2024 Medium-Term
Expenditure Framework, as well as the Fiscal Strategy Papers (MTEF&FSP
2022-2024). The operations seek to achieve macroeconomic stability,
improve revenue generation, create fiscal space for infrastructural
development, enhance fiscal prudence, and ensure sustainable deficits.
Although fiscal deficits marginally expanded by 1.3 per cent in 2022Q1,
relative to the budget benchmark; it improved by 11.8 per cent compared
with the preceding quarter. The improvement was reflected 12.6 per cent
rise in FGN retained revenue, driven, majorly, by the strong performance
of FGN Independent Revenue, and fiscal tightening. The FGN share of total
public debt remained elevated at N36,761.22 billion as at 2022Q1.

2.2.1 Federation Account Operations
Receipts into the Federation Account declined by 2.5 per cent and 45.0 per
cent, relative to the preceding quarter and target, following a sharp decline
in oil revenue sources. Gross federation receipts in 2022Q1 amounted to
N2,530.49 billion. This compares with N2,594.26 billion in 2021Q4 and the
benchmark of N4,598.25 billion. Non-oil revenue accounted for 68.4 per
cent of the total collection, while oil revenue contributed 31.6 per cent.

The observed drop in federation receipts was triggered by the decline in
all components of oil revenue (crude oil and gas exports, petroleum profit
tax and royalties, domestic crude oil and gas sales, among others). At
N799.10 billion, oil receipts was 28.3 per cent below earnings in the last
quarter and 66.4 per cent under projected earnings.
In contrast, non-oil receipts, at N1,731.39 billion, outperformed collection
in the preceding quarter, but was 22.1 per cent below target. The uptick
in earnings, relative to 2021Q4, was attributed, largely, to a significant
increase in collections from Value-Added Tax and Federal Government
Independent Revenue. Improvement in these revenue components
underscored the intensification of non-oil revenue drive through
broadening the tax net and plugging of revenue leakages, particularly, in
Government-Owned Enterprises (GOEs).
A net balance of N1,865.04 billion was retained in the Federation Account
for distribution to the three tiers of government after taking account of
statutory deductions, transfers and additional inflows from Exchange Gain
and Non-oil Excess revenue. Of this amount, the Federal, State and Local
governments, received N720.22 billion, N590.44 billion and N436.37
billion, respectively; while the balance of N118.01 billion was allocated to
the 13.0 per cent Derivation Fund for distribution among oil-producing
states. Total disbursement in 2022Q1 was 10.7 per cent and 48.2 per cent

Summary
Drivers of Federation
Revenue

23 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

lower than the budget benchmark allocations in 2021Q4 and the budget
benchmark, respectively.
Table 6: Federally-Collected Revenue and Distribution to the Three-Tiers of
Government (N Billion)

2021Q1
2021Q4
2022Q1
1/

Budgeted
Federation Revenue (Gross)

Oil

Crude Oil & Gas Exports

PPT & Royalties

Domestic Crude Oil/Gas Sales

Others

Non-oil

Corporate Tax

Customs & Excise Duties

Value-Added Tax (VAT)

Independent Revenue of Fed. Govt.

Others*

Total Deductions/Transfers**

Federally-Collected Revenue

Less Deductions & Transfers
plus:


Additional Revenue

Excess Crude Revenue

Non-oil Excess Revenue

Exchange Gain

Total Distributed Balance

Federal Government

Statutory

VAT

State Government

Statutory

VAT

13% Derivation

Local Government

Statutory

VAT


Source: OAGF and CBN Staff Estimates
Notes: 1/ Provisional
* Includes Education Tax, Customs Special Levies (Federation Account), National Technology
Development, Customs Special Levies, Solid Mineral & Other Mining revenue, and other
Non-regular earnings.
** Deductions include cost of revenue collections and JVC cash calls, while transfers entails
provisions for FGN Independent revenue and other Non-Federation revenue.

2.2.2. Fiscal Operations of the Federal Government
The retained revenue of the FGN in 2022Q1 was boosted by the significant
increase in receipts from Value-Added Tax (VAT) and FGN Independent
Revenue. At N1,142.77 billion, the retained revenue of the FGN exceeded
receipts in the preceding quarter by 12.6 per cent. However, the
longstanding revenue challenge was evident, as the outcome in the
Federal government
retained revenue

24 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

quarter was 57.6 per cent short of projection in the prorated quarterly
budget.
Table 7: FGN Retained Revenue (N Billion), First Quarter 2022

Q1-21
Q4-21
Q1-22
Benchmark
FGN Retained Revenue

Federation Account

VAT Pool Account

FGN Independent Revenue

Excess Oil Revenue

Excess Non-Oil

Exchange Gain

Others*

Source: Compiled from OAGF figures
Note: * Include revenue from Special Accounts and Special Levies

Driven by lower capital spending, the provisional aggregate expenditure of
the FGN fell by 3.1 per cent and 35.5 per cent, relative to 2021Q4 and the
2022 budget benchmark, respectively. Provisional aggregate expenditure
of the FGN amounted to N2,760.61 billion in the review period. A
breakdown revealed that recurrent expenditure, capital expenditure and
transfers accounted for 75.3 per cent, 20.2 per cent and 4.5 per cent of
total expenditure, respectively.
Figure 16: Federal Government Expenditure (N Billion), First Quarter 2022

Source: CBN Staff Estimates and compilation from OAGF data


The effect of revenue increase outweighed the decline in aggregate
expenditure, inducing a contraction in fiscal deficit, relative to the
preceding quarter. At N1,617.84 billion, the provisional fiscal deficit of the
FGN was 11.8 per cent below the level in the preceding quarter, but
overshot the quarterly target of N1,596.52 billion by 1.3 per cent.


2021Q1
2021Q4
2022Q1
Benchmark
Recurrent
Statutory Transfers
Capital
Aggregate expenditure
Overall fiscal balance
Federal Government
expenditure

25 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

Table 8: Fiscal Balance (N Billion), First Quarter 2022


2021Q1
2021Q4
2022Q1
Benchmark
Retained revenue

Aggregate
expenditure

Recurrent

Non-debt

Debt Service

Statutory Transfers

Capital

Primary balance

Overall balance

Source: CBN Staff Estimates and compilation from OAGF data

Though public borrowing was in tandem with the Medium-Term Debt
Strategy (2020-2023) of the FGN, debt levels remained elevated in the
review period. At N41,604.06 billion at end-March 2022, total public debt
outstanding rose by 5.2 per cent relative to the level at end-December
2021. Domestic debt accounted for 60.1 per cent of total debt, while
external debt obligations constituted 39.9 per cent. Of the Total Public
Debt outstanding, FGN (including State governments’ external debt, which
forms part of the FGN’s contingent liability) accounted for N36,761.22
billion, while the State government’s Domestic debt stock accounted for
the balance of N4,842.84 billion.
Further analysis shows that FGN domestic debt stood at N20,144.03
billion. FGN bond issues maintained its dominance, accounting for 70.7
per cent of the total domestic debt, followed by Treasury Bills (21.9 per
cent), Promissory Notes (3.8 per cent), FGN Sukuk (3.0 per cent), and
others1 (0.6 per cent).
Regarding holders of Nigeria’s external debt, which stood at N16,617.19
billion, multilateral, commercial and bilateral loans accounted for 47.4 per
cent, 39.8 per cent and 11.3 per cent, respectively, while ‘other’ loans
constituted 1.5 per cent.
Debt service obligations in 2022Q1, amounted to N897.17 billion,
compared with N428.60 billion in 2021Q4. The rise was attributed to the
principal repayments and redemption of matured debt obligations.


1 This includes Treasury bonds (0.4 per cent), Green bond (0.1 per cent) and
Special FGN Savings bond (0.1 per cent).
Federal Government
Debt

26 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022


Figure 17: FGN External and Domestic Debt Composition (N Billion)

Source: Compiled from DMO figures

Figure 18: Composition of Domestic Debt Stock by Instrument

Source: Compiled from DMO figures


2021 Q1
2021 Q2
2 0 2 1 Q3
2021 Q4
2022 Q1
External Debt
Domestic Debt
FGN Bonds
70.7%
Treasury Bills
21.9%
Others
7.4%

27 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022


Figure 19: Composition of External Debt Stock by Holders
Source: Compiled from DMO figures


.


Multilateral
47.4%
Commercial
39.8%
Bilateral
11.2%
Others
1.5%

28 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

2.3
MONETARY AND FINANCIAL SECTOR
The central bank continued to promote growth and productivity in the real
sector by ensuring credit availability at an affordable cost. Consequently,
the broad money supply expanded, and short-term interest rates fell below
levels in the preceding quarter. The capital market sustained a bullish run
on the back of portfolio switching from fixed-income investments to
equities and increased investors’ sentiment. Overall, the banking system
remained safe and sound as gleaned from the relevant indicators.

2.3.1 Monetary Developments
Reserve money expanded in 2022Q1, driven largely, by the growth in
liabilities to Other Depository Corporations (ODCs). Reserve money grew
by 7.6 per cent to N14,301.77 billion at end-March 2022, relative to its
level at end-December, 2021. The growth was attributed to increase in
liabilities to ODCs by 10.89 per cent, due to rise in required reserves and
transferable deposits of ODCs. This outweighed the 2.4 per cent decline in
currency-in-circulation (CIC) (Table 9).

Table 9: Components of Reserve Money (N Billion)
Source: Central Bank of Nigeria

Despite the decrease of the money multiplier by 0.11 points to 3.19, the
relatively higher monetary base drove the expansion of the total broad
money supply in the review period. Consequently, the broad money
supply (M3) grew by 4.19 per cent to N45,654.46 billion from its level at
end-December 2021. From the asset side, the growth was attributed to
the 8.82 per cent growth in Net Domestic Assets (NDA). However, the Net
Foreign Assets (NFA) declined by 14.19 per cent.

The rise in NDA reflected the 22.46 per cent growth in net claims on
central government and the 3.35 per cent growth in claims on other
sectors. The rise in both the net claims on central government and claims
on other sectors, resulted in an 8.59 per cent rise in domestic claims of
the banking system. Of the total claims on other sectors, credit to the
private sector grew by 1.80 per cent. The gap between the growth in

Mar-21
Dec-21
Mar-22
Monetary Base
13,338.12
13,295.15
14,301.77
Currency-in-Circulation
2,808.73
3,325.15
3,245.60
Liabilities to ODCs
10,529.39
9,969.99
11,056.17
Money Multiplier (M3)
2.90
3.30
3.19
Summary
Broad money
supply
Reserve Money
Monetary
Aggregates

29 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

claims on other sectors and the target of 17.73 per cent for the 2022 fiscal
year indicates available credit absorptive capacity in the economy.

The decline in NFA, on the other hand, was attributed to the 5.66 per cent
increase in liabilities as claims on non-residents fell by 2.74 per cent.
Overall, the NFA constituted a drag on broad money growth by 2.85
percentage points (Table 10).

Table 10: Money and Credit Growth over preceding December (Per cent)
Source: Central Bank of Nigeria

Growth in sectoral credit allocation was in line with the Bank’s effort at
boosting productivity and output growth in the real economy. Relative to
the preceding quarter, total credit utilisation by sectors grew by 3.71 per
cent to N25,282.36 billion. Credit to the agricultural sector grew highest
by 10.08 per cent to N1,604.72 billion, from N1,457.82 billion in 2021Q4.
This was followed by the services sector with a credit expansion of 5.01
per cent to N13,660.76 billion, from N13,009.23 billion in the preceding
quarter. Similarly, credit to industry grew by 1.07 per cent to N10,016.88
billion, from its level in the previous quarter.

Contribution
to M3 growth
(Mar-22)
Mar-21
Dec-21
Mar-22

Benchmark
Net Foreign Assets


Claims on Non-residents

Liabilities to Non-residents
1.55


Net Domestic Assets

Domestic Claims

Net Claims on Central
Government

Claims on Central
Government

Liabilities to Central
Government

Claims on Other Sectors

Claims on Other Financial
Corporations

-0.15


Claims on State and Local
Government

Claims on Public
Nonfinancial Corporations

Claims on Private Sector

Total Monetary Assets (M3)

Currency Outside Depository
Corporations

Transferable Deposits

Narrow Money (M1)

Other Deposits

Broad Money (M2)

Securities Other Than Shares

Total Monetary
Liabilities(M3)

Sectoral
Utilisation of
Credit

30 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

Consumer Credit
The relative share of the sectors in total credit, services and industry
remained dominant. Relative to their values in the preceding quarter, the
share of credit to the services sector grew by 0.67 percentage points to
54.03 per cent, while the agriculture sector increased by 0.37 percentage
points to 6.35 per cent. However, the share of credit to the industry shed
1.04 percentage points to 39.62 per cent (Table 11).
Table 11: Relative Share in Total Sectoral Credit (Per cent)

Mar-21
Dec-21
Mar-22
Agriculture
5.29
5.98
6.35
Industry
41.93
40.66
39.62
Of which Construction
4.77
4.39
4.27
Services
52.78
53.36
54.03
Of which Trade/General
Commerce
6.36
7.01
7.05
Source: Central Bank of Nigeria

Personal loans drove growth in consumer credit in the period under review.
At ₦2,279.45 billion, consumer credit outstanding rose by 9.92 per cent
at end-March 2022 from ₦2,073.76 billion at end-December 2021. The
growth was driven by the increase in the volume of consumer credit
extended by the Other Depository Corporations (ODCs) for personal loans,
which grew by 14.57 per cent.
The share of consumer credit in total private sector credit rose by 9.36 per
cent, compared to an increase of 8.67 per cent in the preceding quarter
(Figure 20). The growth in consumer credit was attributed to the Bank’s
policies to deepen the financial services space and the improved Know
Your Customer (KYC) process.
Figure 20: Consumer Credit Outstanding

Source: Central Bank of Nigeria


2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
Per cent (%)
N' Million
Consumer Credit (LHS)
Consumer Credit as a Share of Private Sector Credit (RHS)

31 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

A disaggregation of consumer loans revealed that personal loans
sustained its dominance, accounting for 78.05 per cent, while retail loans
accounted for the remaining share of 21.95 per cent (Figure 21).

Figure 21: Composition of Consumer Credit (Per cent)

Source: Central Bank of Nigeria

2.3.2 Financial Developments
2.3.2.1 Money Market Developments
There was higher liquidity in the banking system during the quarter, which
resulted in a decline in short-term interest rates. The average net industry
liquidity position rose by 109.98 per cent in 2022Q1 to ₦257.65 billion,
from ₦122.70 billion in the preceding quarter, buoyed by the repayment
of matured CBN bills, treasury bills and FAAC allocation.
In a bid to ensure monetary stability, the Bank wielded Open Market
Operations (OMO) and other instruments to manage liquidity. CBN bills
with maturity of 89 -362 days were auctioned in the review quarter. Total
amount offered, subscribed and allotted, rose to ₦570.00 billion,
₦3,333.67 billion and ₦566.09 billion, respectively, from ₦247.00 billion,
₦722.68 billion and ₦237.75 billion in 2021Q4, while the bid rate declined
to 6.48 per cent (± 1.81) from 6.90 per cent (± 1.85).
Activities at the standing facility window, during the quarter, revealed
more transactions at the Standing Deposit Facility (SDF) than the Standing
Lending Facility (SLF), a reflection of increased banking system liquidity.
Applicable rates for the SLF and SDF remained at 12.50 per cent and 4.50
per cent, respectively. Total SDF rose significantly by 128.98 per cent to
₦1,363.87 billion from ₦595.64 billion in the preceding quarter.

2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
Personal

Retail

Per cent (%)
Industry Liquidity
Standing Facility
Windows
Open Market
Operations

32 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

Expectedly, transactions at the SLF decreased by 52.34 per cent to
₦902.17 billion from ₦1,893.62 billion in the preceding quarter.
At the primary market, investment in debt securities was skewed to longer
tenored instruments. A total of ₦715.57 billion, ₦2,654.78 billion, and
₦1,337.60 billion worth of NTBs, were offered, subscribed, and allotted,
compared with ₦653.62 billion, ₦2,309.44 billion, and ₦901.19 billion, in
2021Q4, respectively. Subscriptions for NTBs were skewed in favour of the
364-day tenor, which accounted for ₦2,536.04 billion or 95.53 per cent of
total subscriptions in 2022Q1, signifying investors' appetite for longer
tenor instruments, a reflection of improving confidence in the banking
system (Figure 22).
Figure 22: Primary Market NTBs, First Quarter 2022 (N billion)

Source: Central Bank of Nigeria

Tranches of the 10- and 20-year FGN bonds were reopened and offered
for sale during the review period. Subscriptions to FGN bonds increased
significantly to N1,481.38 billion in 2022Q1 from ₦650.47 billion in
2021Q4, reflecting renewed investors’ confidence in the market.
Movement in key short-term interest rates was consistent with improved
banking system liquidity. Average daily inter-bank call and Open-Buy-Back
rates were 4.50 per cent (±5.75) and 0.57 per cent (±7.36), respectively,
compared with 4.00 per cent (±10.5) and 3.52 (±7.65) in 2021Q4. The
average interbank and OBB rates shed 1.03 and 4.91 percentage points,
to 11.33 per cent and 7.05 per cent, relative to their rates in the preceding
quarter, respectively. Other rates such as the 30-day and 90-day NIBOR
traded at averages of 8.77 per cent and 10.15 per cent compared with
10.24 per cent and 11.12 per cent in 2021Q4, respectively.
With respect to policy stance, the Monetary Policy Committee (MPC) at
its meeting held in March 2022, voted to maintain the Monetary Policy
Rate (MPR) at 11.50 per cent with the asymmetric corridor for lending and

Q1 2021
(N'B)
Q4 2021
(N'B)
Q1 2022
(N'B)
Offer
853.63
653.62
715.57
Subscription
1,262.20
2,309.44
2,654.78
Allotment
738.00
901.19
1,337.60
N' billion
Primary Market
Interest Rate
Developments

33 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

deposit rates at +100/-700bps. The Cash Reserve Requirement (CRR) and
Liquidity Ratio were also retained at 27.50 per cent and 30.00 per cent,
respectively.
Figure 23: Interest Rate Developments (Per cent)
Source: Central Bank of Nigeria

Lending rates were relatively stable during the quarter, as the average
prime and maximum lending rates closed at 11.77 per cent and 28.33 per
cent, from 11.70 per cent and 27.31 per cent in 2021Q4, respectively.
However, the average term-deposit rate shed 0.49 percentage points to
3.37 per cent, leading to a widening of the spread between the average
term deposit and maximum lending rates to 24.96 percentage points from
23.46 percentage points in 2021Q4.
Figure 24: Average Deposit and Lending Rates

Source: Central Bank of Nigeria.
Note: PLR = Prime lending rate, MXLR = Maximum
lending rate, AVTD = Average term deposit rate, SPRD = Spread between AVTD and MXLR


2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
Per cent (%)
Interbank Call Rate
OBB
NIBOR 30-day
NIBOR 90-day
MPR

2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
Percentage Points
Per cent (%)
PLR
MXLR
AVTD
SPRD (RHS)

34 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

2.3.2.2 Capital Market Developments
Activities on the Nigerian Exchange (NGX) Limited sustained a bullish run
in 2022Q1, attributed to portfolio switching from fixed-income
investments and eased financial conditions. The aggregate market
capitalisation appreciated by 11.2 per cent to N46.75 trillion, from N42.05
trillion in 2021Q4 (Figure 25). A breakdown of the components showed
that equities and debt increased by 9.2 per cent and 0.1 per cent to N25.31
trillion and N21.43 trillion, respectively.

The equities market capitalisation, which constituted 54.2 per cent of the
total, rose by 9.2 per cent to N25.32 trillion, relative to N22.30 trillion at
end-December 2021. The All-Share Index (ASI) opened at 43,026.23 at the
beginning of the quarter, and closed at 46,965.48 at end-March 2022,
reflecting an increase of 9.2 per cent. The increase in the NGX ASI was
attributed to gains by blue-chip companies.

Figure 25: Market Capitalisation and All-Share Index
Figure 5: Market Capitalization and Value Index
Market Capi All-Share Index (RHS)
Q3-18
22.30
32,766.37

Q4-18
21.90
31,430.50

Q1-19
22.30
31,041.42

Q2-19
25.70
29,966.87

Q3-19
26.29
27,630.56

Q4-19
25.89
26,842.07

Q1-20
27.48
21,300.47

Q2-20
24.51
24,479.22

Q3-20
30.53
26,831.76


Index
N' Billion
Market Capitalization (LHS)
All-Share Index (RHS)

Source: Nigeria Exchange (NGX) Limited

In the review quarter, eleven (11) sectoral indices trended upward, while
seven (7) trended downward (Table 12).

The total turnover volume during the review period, fell by 9.2 per cent to
22.24 billion shares, while the value rose by 22.1 per cent to N346.24
billion, respectively, in 290,238 deals, from 24.48 billion shares worth
N283.58 billion, in 263,962 deals, at the end of 2021Q4 (Figure 26).


Market
Capitalisation
NGX All Share
Index

35 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022


Table 12: Nigeria Exchange (NGX) Limited Indices
NGX Indices
Q4 2021
Q1 2022
Changes (%)
NGX -OIL/GAS
345.01
440.44
27.66
NGX -AFR Div Yield
2,559.43
2,965.93
15.88
NGX Growth Index
1,269.66
1,446.50
13.93
NGX -MERI GROWTH
1,805.02
2,045.57
13.33
NGX -MAIN BOARD
1,748.37
1,973.01
12.85
NGX -PREMIUM
4,167.78
4,494.12
7.83
NGX -INDUSTRIAL
2,008.30
2,116.51
5.39
NGX -PENSION
1,624.09
1,704.43
4.95
NSE- 30- INDEX
1,722.30
1,791.07
3.99
NGX -LOTUS
3,009.51
3,092.84
2.77
NGX -BANKING
406.07
409.28
0.79
NGX - CG
1,278.00
1,276.56
-0.11
NGX Sovereign
860.95
858.28
-0.31
NGX- MERI VALUE
2,134.95
2,127.56
-0.35
NGX -Asem
670.65
658.99
-1.74
NGX-CONSUMER GOODS
589.28
554.16
-5.96
NGX -INSURANCE
198.11
186.16
-6.03
NGX -AFR BANK VALUE
1,038.82
968.26
-6.79
Source: Nigeria Exchange (NGX) Limited.


Figure 26: Volume and Value of Traded Securities

Volume (Billion)
Volume of traded securities (LHS)
Value of securities (RHS)

Source: Nigeria Exchange (NGX) Limited.

There were ten new and two supplementary listings in 2022Q1 (Table 13).
Access Bank Plc was delisted, while Access Holdings Plc was listed. The full
suspension of Wema Bank was lifted with the completion of capital
restructuring, and its shares were relisted at N2.76 per share. There were
also 2 change of bond names, during the review period.


36 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

Table 13: Listings on the Nigerian Stock Exchange at end-March 2022
Companies/ Securities
Units
Remarks
Listing
BUA Foods Plc
18,000,000,000
Ordinary shares at
N40.00 per share
New
7.322% FGNSB DEC 2023
99,014
Savings Bond
New
8.322% FGNSB DEC 2024
203,036
Savings Bond
New
7.220% FGNSB FEB 2024
163,689,000.00
Savings Bond
New
8.220% FGNSB FEB 2025
483,109,000.00
Savings Bond
New
9.470% FGNSB MAR 2024
626,544
Savings Bond
New
10.470% FGNSB MAR 2025
1,527,278
Savings Bond
New
13.360% ADV NOV 2028
11,444,000
7-year Bond
Senior unsecured bonds
New
13.65% ADV N0V 2031
13,856,000
10-year Bond
Senior unsecured bonds
New
Family Homes Sukuk Issuance
Program Plc
10,000,000
Sukuk Bonds
New
Abbey Mortgage Bank Plc.
3,692,307,692
Rights Issue at 82 kobo
per share
Supplementary
13.00% FGN JAN 2042
262,022,200
FGN Bonds
Supplementary
Source: Nigeria Exchange (NGX) Limited.
Notes: FGNSB = Federal Government Savings Bond; ADV = Ardova Plc.; LFZC = Lagos Free
Zone Company ; GTEED = Guaranteed ; TSL=; SPV= Special Purpose Vehicle

Table 14: Change of Bond names on the NSE at end-March 2022
Company
Old name
New name
Lagos Free Zone
Company (LFZC)
LFZC FUNDING SPV PLC BOND
13.25% LFZC GTEED SEP 2041
TSL
TSL-SPV Bond
10.00% TSL GTEED OCT 2030
Source: Nigeria Exchange (NGX) Limited.
Notes: GTEED = Guaranteed; SPV= Special Purpose Vehicle

2.3.2.3 Financial Soundness Indicators
The financial sector was stable, as key financial soundness indicators were
within regulatory thresholds. The industry Capital Adequacy Ratio (CAR)
rose by 0.1 percentage point to 14.6 per cent from 14.5 per cent in the
preceding quarter. The ratio was above the minimum threshold of 10.00
per cent. The banks’ loan quality indicator (non-performing loan ratio)
rose by 0.2 percentage point to 5.1 per cent, relative to the preceding
quarter. The industry liquidity ratio (LR) was above the regulatory
benchmark of 30.0 per cent. The LR increased by 0.9 percentage points to
55.8 per cent in the review period, compared with 54.9 per cent recorded
in the preceding quarter.


37 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

2.4.
EXTERNAL SECTOR DEVELOPMENTS
2.4.1. External Balance
The fallout of the Russia-Ukraine conflict resulted in a surge in
international crude oil prices which improved the external sector's
performance. Consequently, the current account recorded an
impressive surplus of US$2.58 billion, compared with US$0.05 billion
in the preceding quarter, attributed largely to improved export
earnings. Also, the financial account recorded a net acquisition of
financial assets of US$0.78 billion. The external reserves at endMarch 2022 was US$39.28 billion, compared with US$40.23 billion
at end-December 2021. The level could finance 8.6 months of goods
only or 6.8 months of goods and services import. Public external debt
at end-March 2022 stood at US$39.97 billion, compared with
US$38.39 billion at end-December 2021. The average exchange rate
of the naira per US dollar at the I&E window was relatively stable.
2.4.2. Current & Capital Account Developments
The favourable international crude oil and gas prices improved the balance
of trade position with increased export earnings. Consequently, the
current account balance showed a higher surplus of US$2.58 billion (2.4
per cent of GDP), compared with US$0.05 billion (0.1 per cent of GDP) in
2021Q4.
Figure 27: Current Account Balance GDP Ratio (per cent)

Source: CBN


Q32021
Q4 2021
Q1 2022
Summary

38 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

Export earnings rose by 21.9 per cent to US$17.30 billion in 2022Q1, from
US$14.19 billion in 2021Q4. A disaggregation showed that crude oil and
gas export receipts increased by 28.2 per cent to US$15.36 billion, from
US$11.98 billion in the preceding quarter. The development was driven,
majorly, by the increase in the average price of crude oil. However, nonoil and electricity export receipts declined by 11.8 per cent to US$1.95
billion, from US$2.21 billion in the preceding quarter. In terms of share of
total exports, crude oil and gas export receipts remained dominant,
accounting for 88.7 per cent, while non-oil and electricity export
accounted for the balance of 11.3 per cent.

The global supply chain disruptions, on account of the Russia-Ukraine
crisis, affected the import of non-oil products, particularly agricultural
products. Thus, merchandise import fell by 3.0 per cent to US$13.66 billion
in 2022Q1, from US$14.09 billion in the preceding quarter. This was
occasioned majorly, by the decline in the importation of non-oil products
by 8.3 per cent to US$9.45 billion, from US$10.31 billion in the preceding
quarter. Import of petroleum products, however, increased by 11.4 per
cent to US$4.21 billion, from US$3.78 billion. The share of non-oil import
remained dominant, accounting for 69.2 per cent of total import, while
petroleum products represented the balance of 30.8 per cent.

A breakdown of non-oil import by sector revealed that importation of raw
materials and machinery for industrial use accounted for the highest share
of 52.6 per cent, followed by manufactured products, with a share of 22.7
per cent. Importation of food products accounted for 11.4 per cent, while
oil, transport and mineral sectors accounted for 6.6, 2.9 and 2.6 per cent,
respectively. Agricultural sector accounted for the balance of 1.2 per cent.
The deficit in the services accounts narrowed to US$2.83 billion in
2022Q1, from US$3.25 billion in 2021Q4. A breakdown showed that
payment for services during the quarter amounted to US$3.79 billion,
while receipts for services was US$0.96 billion. Further breakdown
showed that payments for transportation and other business services
stood at US$1.64 billion and US$0.87 billion, accounting for 43.4 per cent
and 23.0 per cent of total services payments, respectively. Payment for
travel services amounted to US$0.77 billion, representing 20.3 per cent of
the total, while payment for financial and telecommunication services was
US$0.16 billion apiece or 4.3 per cent and 4.1 per cent of the total,
respectively.

Services
Export
Performance
Merchandise
Import

39 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022


Figure 28: Share of Service Payments (per cent)

Source: Central Bank of Nigeria

Analysis of services receipts showed a marginal decline of 0.6 per cent to
US$0.96 billion, from the previous quarter's level. Further breakdown
showed that receipts from transportation and travel export stood at
US$0.47 billion and US$0.21 billion, respectively, accounting for 48.7 per
cent and 21.6 per cent of total services receipts, respectively. Receipts
from government services amounted to US$0.11 billion, representing 11.7
per cent of the total, while financial services receipt was US$0.09 billion
or 9.3 per cent of the total.
Figure 29: Share of Service Receipts (per cent)

Source: Central Bank of Nigeria
Transport
34.2%
Travel
26.0%
Insurance and
pension services
4.5%
Government goods
and services
1.7%
Financial services
2.5%
charges for
the use of
intellectual
property
n.i.e
1.6%
Telecommunications,
computer, and
information services
2.8%
Other business
services
26.7%
Transport
48.7%
Travel
21.6%
Insurance and
pension services
0.8%
Government
goods and
services
11.7%
Financial services
9.3%
charges for
the use of
intellectual
property n.i.e
0.0%
Telecommunicati
ons, computer,
and information
services
6.4%
Other business
services
1.6%

40 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

Higher repatriation of dividends and profits by non-residents and interest
payments on loans widened the deficit in the primary income account. The
deficit widened by 58.0 per cent to US$3.87 billion in 2022Q1, compared
with the US$2.45 billion in 2021Q4. The compensation of employees subaccount recorded a surplus of US$0.05 billion, a decreased of 10.1 per
cent from US$0.06 in the preceding quarter.
Figure 30: Primary Income Balance (US$ Million)

Source: Central Bank of Nigeria

The inflow of Other Development Assistance (ODA) to the general
government waned in the quarter. Consequently, the surplus in the
secondary income account was US$5.63 billion, compared with US$5.65
billion in 2021Q4. The development was attributed to a decline in the
receipts of general government transfers to US$0.56 billion from US$0.73
billion. However, personal transfers, including workers’ remittances, rose
by 2.5 per cent to US$5.16 billion in 2022Q1, from US$5.03 billion in
2021Q4.
Figure 31: Secondary Income Balance and Remittances Inflow (US$ Million)

Source: Central Bank of Nigeria


2021Q1
2021Q2
2021Q3
2021Q4
2022Q1

2021Q1
2021Q2
2021Q3
2021Q4
2022Q1
Secondary Income Balance
Workers' Remittances
Secondary
Income
Primary Income

41 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

2.4.3. Financial Account
The financial account posted a lower net acquisition of financial assets,
reflecting higher incurrence of financial liabilities, relative to the preceding
period. The financial account recorded a lower net acquisition of financial
assets of US$0.78 billion (0.7 per cent of GDP), compared with US$5.15
billion (4.3 per cent of GDP) in the preceding quarter.
An inflow of US$3.33 billion was recorded in 2022Q1, contrasting with an
outflow of US$2.85 billion in the preceding quarter. The development was
due to an improved inflow of portfolio capital for the purchase of longterm securities and additional disbursement of multilateral loans to the
general government. Foreign Direct Investment (FDI) divestment of
US$0.18 billion was recorded, relative to an inflow of US$0.04 billion in
the preceding quarter, resulting from reduced investments in equity and
investment funds worth US$0.11 billion and debt instruments amounting
to US$0.07 billion. Portfolio investment inflow of US$1.54 billion was
recorded, relative to a reversal of US$3.01 billion in the previous quarter,
on account of the acquisition of money market instruments by nonresidents investors. Other investment inflow rose significantly to US$1.97
billion, from US$0.12 billion in the preceding quarter, as a result of inflow
of foreign loans to the general government.
Aggregate financial assets was US$4.11 billion in 2022Q1, compared with
US$2.30 billion in the preceding quarter, driven by the increase in other
investment assets. Foreign Direct Investments (FDI) decreased
significantly to US$0.05 billion, relative to the acquisition of US$0.75
billion in the preceding quarter, reflecting global economic uncertainties
surrounding the Russia-Ukraine conflict. Similarly, investments in portfolio
assets decreased to US$0.09 billion, compared with the acquisition of
US$0.33 billion in the preceding quarter, owing to reduced purchase of
debt securities by non-financial corporations and households, signifying
low investors’ confidence in the international debt market. However,
other investment assets rose to US$5.13 billion in 2022Q1, relative to
US$2.50 billion in the previous quarter, on account of an increase in
foreign currency and deposit holdings of non-financial corporations and
households. Furthermore, reserve assets recorded a lower depletion of
US$0.88 billion, compared with US$1.28 billion in 2021Q4.
2.4.4. External Debt
Nigeria’s public sector external debt stock at end-March 2022 stood at
US$39.97 billion (9.2 per cent of GDP). A breakdown showed that the
multilateral loans, from the World Bank, International Monetary Fund,
and African Development Bank Group, amounted to US$18.96 billion,
Net Acquisition of
Asset
Public Sector
External Debt
Financial Account
Developments
Net Incurrence of
Liability

42 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

accounting for 47.4 per cent of the total. The sum of US$15.92 billion or
39.8 per cent of the total was borrowed from commercial sources in the
form of Euro and Diaspora Bonds. Loans from bilateral sources was
US$4.50 billion, or 11.3 per cent of the total, while promissory notes were
US$0.59 billion, or 1.5 per cent of the total debt stock.

The external debt service stood at US$0.55 billion at end-March 2022,
relative to US$0.29 billion in the preceding quarter. A breakdown shows
that the principal repayment was US$0.15 billion, accounting for 27.3 per
cent of the entire payment. Interest payment totalled US$0.36 billion, or
65.6 per cent of the total, while other payments made up the balance. An
analysis of interest payments showed that interest payment (US$0.25
billion) on commercial borrowings accounted for 69.4 per cent of the
total; multilateral institutions (US$0.06 billion) accounted for 16.7 per
cent of the total, while interest payments on bilateral loans accounted for
the balance.

2.4.5. International Investment Position (IIP)
Nigeria's International Investment Position (IIP) recorded a net financial
liability of US$70.83 billion at end-March 2022. The stock of financial
assets increased by 3.3 per cent to US$107.65 billion at end-March 2022,
from US$104.25 billion at end-December 2021. This was due, largely, to
an increase in the stock of other investments by 9.8 per cent to US$49.89
billion. However, direct investment decreased by 0.2 per cent to US$13.55
billion, driven by the decline in the purchase of debt instruments by nonfinancial corporations and households. Similarly, Foreign Portfolio
Investment (FPI) decreased by 1.7 per cent to US$2.93 billion in the review
period, compared to the US$2.98 billion in 2021Q4.

The stock of financial liabilities, representing foreign investors' claims on
the economy, increased by 2.2 per cent to US$178.48 billion at end-March
2022, compared with US$174.55 billion at end-December 2021. The
development reflected an increase in the stock of direct, portfolio and
other investment liabilities, relative to the levels at end-December 2021.
Specifically, the stock of portfolio investments increased by 7.2 per cent
to US$35.25 billion from US$32.87 billion at end-December 2021.


International
Investment
Position

43 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

2.4.6. International Reserves
The foreign exchange reserves remained above the benchmark of 3.0
months of import cover. The external reserves stood at US$39.28 billion at
end-March, 2021, relative to US$40.23 billion at end -December 2021. The
external reserves could cover 6.8 months of import for goods and services
or 8.6 months of import for goods only.
Figure 32: External Reserves and Months of Import Cover
Source: Central Bank of Nigeria

A breakdown of the external reserves by ownership showed that the share
of CBN was US$37.78 billion (96.19 per cent); Federal Government,
US$1.46 billion (3.72 per cent); while the Federation accounted for the
balance of US$0.04 billion (0.09 per cent). In terms of currency
composition, the US dollar was US$29.51 billion, (75.1 per cent); Special
Drawing Rights, US$5.25 billion (13.4 per cent); Chinese Yuan, US$4.07
billion (10.4 per cent); Great Britain Pounds, US$0.25 billion (0.6 per cent);
Euro, US$0.20 billion (0.5 per cent); and other currencies accounted for
the balance.
2.4.7 Foreign Exchange Flows through the Economy
The economy sustained a net foreign exchange inflow in 2022Q1 as
observed in the preceding quarter. Foreign exchange inflow into the
economy decreased by 14.4 per cent to US$17.62 billion, compared with
US$20.58 billion in the preceding period. The development was driven by
the 16.8 per cent and 12.4 per cent decline in inflow through the CBN and
the autonomous sources, respectively. Foreign exchange inflow through
the Bank, at US$7.63 billion, fell below the US$9.18 billion in the preceding
quarter. Disaggregation shows that receipts from oil-related sources
Foreign Exchange
Flows through the
Economy
International
Reserves


Months of Import Cover
Reserves (US$ billion)
External Reserves - LHS
Months of Import (Goods only)
Months of Import (Goods and Services)

44 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

declined by 9.8 per cent to US$1.47 billion, relative to US$1.63 billion in
the fourth quarter. Similarly, receipts from non-oil sources fell to US$6.16
billion, compared with US$7.54 billion. Foreign exchange inflow through
autonomous sources also declined to US$9.99 billion, from US$11.40
billion in the preceding period, driven largely by a reduction in invisibles
purchases.
Foreign exchange outflow through the economy fell by 10.1 per cent to
US$10.98 billion, relative to the level in the fourth quarter. Of the total,
outflow through the Bank amounted to US$8.43 billion, a decline of 20.3
per cent, relative to US$10.58 billion in the preceding quarter. This was
attributed, largely, to decreases in third-party MDA transfers and public
sector/direct payments. However, autonomous outflow rose by 55.3 per
cent to US$2.55 billion, on account of increase in invisible imports.
Consequently, the economy recorded a net inflow of US$6.64 billion in
2022Q1, compared with US$8.36 billion in the preceding quarter. In
contrast, a net outflow of US$0.80 billion was recorded through the Bank,
compared with net outflow of US$1.40 billion in the preceding quarter. A
lower net inflow of US$7.44 billion was recorded through autonomous
sources in the review period, compared with US$9.76 billion in the fourth
quarter.
Figure 33: Foreign Exchange Transactions through the Bank (US$ Billion)
Source: Central Bank of Nigeria
2.4.9 Developments in the Foreign Exchange Market
The Bank introduced the RT200 programme on February 25, 2022, with
the objectives of enhancing and diversifying the sources of foreign
exchange inflow, increasing the level of contribution of non-oil exports,
Foreign Exchange
Market
Developments

Q1 2021
Q4 2021
Q1 2022
Inflow
7,547.48
9,176.59
7,632.63
Outflow
8,721.26
10,577.32
8,434.56
Netflow

Inflow
Outflow
Netflow

45 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
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and ensuring the stability and sustainability of foreign exchange inflows,
and supporting export-oriented companies to expand operations.
2.4.10 Transactions in the Foreign Exchange Market
Total foreign exchange sales to authorised dealers by the Bank, at US$4.86
billion, decreased by 5.8 per cent, compared with the previous quarter's
level.
Disaggregation
shows
that
foreign
exchange
sales
at
interbank/invisibles and SMIS windows declined by 16.9 per cent and 10.8
per cent to US$0.46 billion and US$1.79 billion, respectively, relative to
the levels in the preceding quarter. Similarly, SME interventions and sales
at the Investors & Exporters’ (I&E) window, decreased by 2.0 per cent and
26.7 per cent to US$0.38 billion and US$1.41 billion, compared with the
amounts in the preceding quarter. However, matured swap contracts rose
by 187.33 per cent to US$0.82 billion, relative to the previous quarter's
level.
Figure 34: Foreign Exchange Sales to Authorised Dealers (US$ billion)
Source: Central Bank of Nigeria
The average turnover at the Investors and Exporters’ (I&E) segment
declined by 35.8 per cent to US$0.12 billion, relative to the previous
quarter, reflecting decreased liquidity in the window.
2.4.11 Exchange Rate Movement
The exchange rate of the naira was relatively stable at the I&E window,
relative to 2021Q4. The average exchange rate of the naira per US dollar
at the I&E window was ₦416.34/US$, compared with ₦412.43/US$ in the
preceding quarter.


Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Average Exchange
Rate

46 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
ECONOMIC REPORT, FIRST QUARTER 2022

Figure 35: Turnover in the I&E Foreign Exchange Market
Source: Central Bank of Nigeria


Q 1

Q 2

Q 3

Q 4

Q 1

Q 2

Q 3

Q 4

Q 1

Percent
US $ (M)
Average Turnover
Rate of Turnover

47 | P a g e Central Bank of Nigeria Economic Report First Quarter 2022
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3.0 ECONOMIC OUTLOOK
3.1 Global Outlook
The performance of the global economy is expected to slow significantly in
2022, consequent upon shocks induced by the Russia-Ukraine war.
Accordingly, the IMF projects global growth to soften to 3.6 per cent in
2022, which is 2.5 percentage points and 0.8 percentage points lower than
the estimate for 2021 and the initial projection in January 2022,
respectively. In the AEs, growth is expected to moderate to 3.3 per cent in
2022 from an estimated 5.2 per cent in 2021; while in the EMDEs, it is
projected to grow by 3.8 per cent, compared with 6.8 per cent in 2021.
However, the growth forecast might be affected by some downside risks,
including further escalation of geopolitical tensions between Russia and
the Western countries, pandemic-induced supply disruptions, monetary
tightening and financial market volatility.
Global inflation is expected to remain elevated in 2022, rising to 5.7 per
cent in the AEs and 8.7 per cent in the EMDEs, according to the IMF
projections. The expected surge in commodity prices is premised on the
war in Ukraine amid pre-existing supply-demand imbalances. While energy
is expected to be the main driver of the price increases in the AEs, rising
food prices is projected to play significant role in most the EMDEs.
3.2 Domestic Outlook
On the domestic front, the economy is expected to sustain its
positive`growth trajectory in the near-term. The positive outlook is
predicated on continued recovery of oil prices, rebound in manufacturing
activities, and sustained policy support. However, persisting insecurity,
weak commodity value chain, infrastructure deficit (including poor
electricity supply), are possible headwinds that could undermine the
outlook for growth. Furthermore, mounting value shortfall recovery on
PMS and crude oil production bottlenecks, could weaken the fiscal space
and constrain government’s effort in implementing the capital component
of the 2022 Budget, required to support growth.
Pressure on domestic Inflation may remain elevated, especially in the
short-term, following seasonal trend. Also, the lingering disruptions in the
supply of petroleum products and domestic security challenges could also
weigh heavily on inflation in the near-term. However, the crystallisation of
the Bank’s intervention in key sectors of the economy, particularly, in the
agricultural sector, and other policy adjustments are expected to moderate
the inflationary pressure.

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Fiscal outlook for the near-term is less optimistic, as government revenue
remained challenged on the account of higher value shortfall for PMS and
lower-than-expected crude oil production. The erosion of households’
purchasing power and companies’ profit, due to rising energy cost may
also lower tax revenue. However, sustained implementation of the Finance
Act and associated reforms, under the Strategic Revenue Growth Initiatives
(SRGIs), is expected to improve fiscal conditions.

The prospect for Nigeria’s external reserves is positive on the back of
favourable crude oil prices. However, potential increase in interest rates by
the US Federal Reserve Bank poses a risk to foreign investments, as it could
lead to reverse capital flows. On the other hand, a likely deal between the
United States and Iran or Venezuela to replace Russian oil imports with oil
imports from either or both countries might halt the rising crude oil prices.
Furthermore, lifting sanctions on Iranian and Venezuelan oil could also
lead to a reallocation of production quota to OPEC members to stabilise
the market.