diff --git "a/clean/cb_requests/2f3e93e099bb7f1719a342126757e938.json" "b/clean/cb_requests/2f3e93e099bb7f1719a342126757e938.json"
new file mode 100644--- /dev/null
+++ "b/clean/cb_requests/2f3e93e099bb7f1719a342126757e938.json"
@@ -0,0 +1 @@
+{"doc_id": "2f3e93e099bb7f1719a342126757e938", "text": "Classified as Confidential \n \n \n \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nECONOMIC REPORT \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nFirst Quarter \n2023 \n \n \ni \n \nABOUT THE REPORT \n \nThe Central Bank of Nigeria (CBN) Economic Report presents economic \ndevelopments in Nigeria, intended for dissemination to the public. The \nReport provides insights on current developments in the real, fiscal, \nfinancial, and external sectors of the Nigerian economy, as well as on \nglobal issues of interest. It also reflects the policy initiatives of the CBN in \npursuit of its mandate. \n \nThe Report is targeted at a wide range of readers, including economists, \npolicymakers, financial analysts in the government and private sectors, \nand the public. Free copies of the Report, both current and past issues, can \nbe obtained from the CBN website: www.cbn.gov.ng. All inquiries \nconcerning the report should be directed to the Director, Research \nDepartment, Central Bank of Nigeria, P.M.B. 187, Garki, Abuja, Nigeria. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nii \n \nContents \nABOUT THE REPORT ....................................................................................... i \n SUMMARY .....................................................................................................1 \n1.0 GLOBAL ECONOMIC DEVELOPMENTS ..............................................3 \n1.1 Global Economic Activity ...................................................................3 \n1.2 Global Inflation...................................................................................5 \n1.3 Global Financial Markets Development ...........................................7 \n1.4 Global Commodity Market Developments .................................... 10 \n1.5 Monetary Policy Stance .................................................................. 13 \n2.0 DOMESTIC ECONOMIC DEVELOPMENTS....................................... 14 \n2.1 Real Sector Developments ............................................................. 14 \n2.1.1 Sectoral Performance ..................................................................... 15 \n2.1.2 Consumer Prices ............................................................................. 18 \n2.1.3 Socio-Economic Developments ..................................................... 19 \n2.1.4 Domestic Crude Oil Market Developments .................................. 19 \n2.2 Fiscal Sector Development……………………………………………..………..21 \n2.2.1 Federation Account Operations .................................................... 20 \n2.2.2 Fiscal Operations of the Federal Government ............................. 23 \n2.3 Monetary and Financial Development ........................................ 27 \n2.3.1 Monetary Developments ............................................................... 27 \n2.3.2 Sectoral Credit Utilisation .............................................................. 30 \n2.3.3 Financial Developments................................................................. 31 \n2.3.3.1 Money Market Developments...................................................... 31 \n2.3.4 Capital Market Developments ....................................................... 35 \n2.3.5 Financial Soundness Indicators ..................................................... 39 \n2.4 External Sector Developments ..................................................... 40 \n2.4.1 Current and Capital Account ......................................................... 40 \n2.4.2 Financial Account ........................................................................... 44 \n2.4.3 External Debt .................................................................................. 45 \n2.4.4 International Investment Position (IIP) ......................................... 46 \n2.4.5 External Reserves ........................................................................... 46 \n2.4.6 Foreign Exchange Flows through the Economy ........................... 47 \n3.0 ECONOMIC OUTLOOK................................................................... 49 \n3.1 Global Outlook .............................................................................. 49 \n3.2 Domestic Outlook ......................................................................... 49 \n \n \n \n \n \niii \n \nTables \nTable 1: Global Purchasing Managers' Index (PMI) .....................................3 \nTable 2: EMEs Currency Rates to the US dollar ........................................ 10 \nTable 3: Indices of Average World Prices of Nigeria's Major Agricultural \nExport Commodities for 2023Q1 (in dollars; Jan. 2010=100) .................. 12 \nTable 4: Central Bank Policy Rates (per cent) ........................................... 13 \nTable 6: Federally collected Revenue and Distribution (N Billion) ........... 22 \nTable 7: FGN Retained Revenue (N Billion) ............................................... 23 \nTable 8: Fiscal Balance (N Billion) .............................................................. 24 \nTable 9: Components of Reserve Money (N Billion) ................................. 27 \nTable 10: Money and Credit Growth over preceding December (%) ...... 29 \nTable 11: Sectoral Credit Allocation .......................................................... 30 \nTable 12: Nigeria Exchange (NGX) Limited sectorial Indices ................... 36 \nTable 13: Listings on the Nigerian Exchange Limited in 2023Q1 ............. 38 \nTable 14: Financial Soundness Indicators (Per cent) ............................... 39 \n \nFigures \nFigure 1: Selected Advanced Economies’ PMIs ...........................................4 \nFigure 2: PMI in Selected EMDEs ..................................................................5 \nFigure 3: Inflation Rates in Selected Advanced Economies .........................6 \nFigure 4: Inflation Rates in Selected EMDEs ................................................7 \nFigure 5: Key Global Stock Indices ...............................................................8 \nFigure 6: 10-year Government Bond Yields for Selected Countries ...........9 \nFigure 7: EMEs Currency Values to the US dollar ..................................... 10 \nFigure 8: Quarterly Crude Oil Prices .......................................................... 11 \nFigure 9: Price Changes in Selected Metals (per cent) ............................. 12 \nFigure 10: Real GDP Growth Rate, 2021Q1-2023Q1, Year-on-Year ........ 15 \nFigure 11: Sectoral Growth Rate of Real GDP, 2021Q1-2023Q1 ............. 15 \nFigure 12: Top 16 Contributing Sectors and Growth Rates, 2023Q1 ...... 17 \nFigure 13: Least Contributing Sectors and Growth Rates, 2023Q1 ......... 17 \nFigure 14: Headline, Food and Core Inflation (year-on-year) .................. 18 \nFigure 15: Federal Government Expenditure (N Billion) .......................... 24 \nFigure 16: FGN External and Domestic Debt Composition (N Billion) ..... 25 \nFigure 17: Composition of Domestic Debt Stock by Instrument.............. 26 \nFigure 18: Composition of External Debt Stock by Instrument................ 26 \nFigure 19: Composition of Currency-in-Circulation (N Billion) ................. 28 \nFigure 20: Consumer Credit Outstanding .................................................. 31 \nFigure 21: Composition of Consumer Credit ............................................. 31 \nFigure 22: Transaction at the CBN Standing Facility Window (N Billion) 32 \nFigure 23: Primary Market NTBs (N Billion) .............................................. 33 \nFigure 24: Primary Auctions of FGN Bond (N Billion) ............................... 33 \nFigure 25: Developments in Short-term Interest Rates............................ 34 \nFigure 26: Trend in Average Term Deposit and Lending Rates ................ 35 \nFigure 27: Aggregate Market Capitalisation and All-Share Index ............ 36 \nFigure 28: Volume and Value of Traded Securities on the NGX .............. 37 \nFigure 29: Current Account Balance .......................................................... 40 \nFigure 30: Share of Service Out-Payments ................................................ 42 \n \n \niv \n \nFigure 31: Share of Services Receipts ........................................................ 43 \nFigure 32: Primary Income Balance (US$ Billion) ...................................... 43 \nFigure 33: Secondary Income Balance and Remittances Inflow .............. 44 \nFigure 34: External Reserves and Months of Import Cover ..................... 46 \nFigure 35: Foreign Exchange Transactions through the Economy........... 47 \nFigure 36: Turnover in the I&E Foreign Exchange Market ....................... 48 \n \n1 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nSUMMARY \nGlobal economic activity rebounded in 2023Q1, as supply-chain and \ninflationary pressures eased. Consequently, the average J.P. Morgan’s \nglobal composite Purchasing Manager’s Index (PMI) increased to 51.73 \nindex points from 48.40 index points in 2022Q4, driven by the expansion in \nthe services sector. Inflationary pressures, though abating, remained \nelevated, as economic activities were buoyed by the easing of supply-chain \nbottlenecks in both advanced and emerging market and developing \neconomies, although some grappled with the effect of tight financial \nconditions. Global equity markets were bullish, on the back of the strong \nperformance of the tech and energy sectors, albeit the turbulence in the \nUS banking sector. In the fixed-income space, the 10-year government \nbond yield rallied, as prices rose. The average spot price of Nigeria’s \nreference crude, the Bonny Light (34.9° API), fell by 7.8 per cent to \nUS$83.86 per barrel (pb) from US$90.98 pb in the preceding quarter. The \nprices of Brent, at US$81.75 pb, Forcados at US$84.29 pb, West Texas \nIntermediate (WTI) at US$77.46 pb and OPEC Reference Basket (ORB) at \nUS$80.55 pb, exhibited similar trend as the Bonny Light. \nOn the domestic front, the economy grew at a slower pace in 2023Q1, \namidst headwinds. The real GDP grew by 2.31 per cent, compared with \n3.52 per cent in 2022Q4, driven by the 2.77 per cent growth in non-oil \nsector. However, the growth outcome was dragged by the 4.21 per cent \ncontraction in the oil sector, despite the renewed effort to tackle vandalism \nand crude oil theft, which boosted crude oil production to 1.28 million \nbarrels per day (mbpd) from 1.15 mbpd produced in 2022Q4. Inflation \nremained elevated, as headline inflation rose to 22.04 per cent, compared \nwith 21.34 per cent in 2022Q4. Core inflation inched to 19.86 per cent, \ncompared with 18.49 per cent in the preceding quarter, due to an increase \nin the cost of imported and locally manufactured goods. Food inflation also \nrose to 24.45 per cent from 23.75 per cent in the preceding quarter, \nfollowing increased demand pressures. \nThe fiscal operations of the FGN resulted in a wider overall deficit, on \naccount of lower oil receipts. The estimated retained revenue of the FGN \nfell by 10.7 per cent, to N1,342.15 billion from the level in 2022Q4. Oil \nreceipts declined by 3.0 per cent and 43.5 per cent, relative to 2022Q4 and \nquarterly target, while non-oil receipts, improved over the preceding \nquarter by 1.2 per cent, but was 9.6 per cent below the quarterly target. In \nthe same vein, provisional aggregate expenditure of the FGN declined by \n1.3 per cent and 36.0 per cent, relative to 2022Q4 and the quarterly \nbudget, respectively. Consequently, the FGN overall deficit widened by 9.6 \nper cent relative to 2022Q4 but narrowed by 22.1 per cent when compared \nwith the proportionate budget. Total public debt outstanding as at end-\nDecember 2022 was N46,250. 37 billion (22.8 per cent of GDP), remained \nwithin the statutory threshold. \n \n2 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nThe financial system was resilient, on the back of sustained supervision and \nimplementation of prudential guidelines, ample liquidity and positive \ninvestors’ sentiment. Banking system liquidity increased, resulting in \ndecreased activity in the standing lending facility (SLF) window, increased \nsubscription in both the Nigerian Treasury Bills (NTBs) and Federal \nGovernment of Nigeria(FGN) bonds segments, and credit expansion to key \nsectors of the economy. The broad money supply (M3) grew by 4.8 per cent \nat the end of March 2023, owing to increase in both net foreign and \ndomestic assets. Activity on the Nigerian Exchange (NGX) Limited was \nbullish, arising from strong buying interest in the equities market \noccasioned by positive 2022 full year corporate dividend/earnings \ndeclaration. \n \nUncertainties surrounding the general elections in Nigeria exerted pressure \non the external sector, as the overall balance of payments deficit widened. \nThe current account posted a surplus of US$2.49 billion, buoyed by positive \ntrade performance. Capital reversal of US$0.78 billion was recorded in \n2023Q1, in contrast to an inflow of US$1.94 billion in 2022Q4, reflecting in \npart, the policy normalisation by the Advanced Economies and \nuncertainties surrounding the country’s general elections. Aggregate \nfinancial assets recorded a disposal of US$1.30 billion, in contrast to an \nacquisition of US$1.09 billion in 2022Q4. The international reserves at \nUS$35.14 billion was equivalent to 6.68 months of import for goods and \nservices or 9.01 months for goods only. The average exchange rate of the \nnaira per US dollar at the I&E window was ₦460.93/US$, compared with \n₦445.71US$ in 2022Q4. The international investment position recorded a \nnet financial liability of US$76.62 billion. Public sector external debt stock \nand external debt service payment at end-December 2022 stood at \nUS$41.69 billion and US$0.80 billion, respectively. \nThe global outlook for growth in 2023 remains uncertain, on account of \ntight \nfinancial \nconditions, \ngeo-economic \nfragmentation, \nand \nmacroeconomic uncertainties that continued to trail the Russia-Ukraine \nWar. Thus, the IMF revised global growth projection to 2.8 per cent in 2023 \nfrom an estimated 3.4 per cent in 2022. Domestic growth outlook remains \npositive in the near-term, despite headwinds. The recovery of crude oil \nprices, increased crude oil production, rebound in consumer demand and \nsustained policy support formed the basis for the optimism. \n \n \n \n \n \n \n \n3 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n \n1.0 GLOBAL ECONOMIC DEVELOPMENTS \nGlobal economic activity rebounded in 2023Q1, propelled by easing of \nsupply-chain and inflationary pressure, and the reopening of Chinese \neconomy resulting in marked expansion in services and employment levels \nacross regions. Also, inflationary pressure moderated in most economies \non the back of easing food and energy costs as well as the crystallisation \nof tight monetary policy stance. The cooling off of inflation, receding fears \nof a possible recession in the Advanced Economies, and strong \nperformance of tech and energy sectors led to improvement across the \ndifferent financial market segments. Crude oil prices fell, due to increased \ncrude oil supply and investors’ pessimism owing to uncertainties in the US \nbanking sector. \n1.1 Global Economic Activity \nGlobal economic activity rebounded in 2023Q1 as supply-chain and \ninflationary pressure eased. Consequently, the average J.P. Morgan’s \nglobal composite Purchasing Manager’s Index (PMI), stood at 51.73 index \npoints from 48.40 index points in 2022Q4. The increase in output was \nsupported by significant expansion in the services sector. Specifically, \nprice pressure eased as the input prices index fell to 59.80 points from \n62.27 points, and the output prices index fell to 55.07 index points from \n55.77 index points. Employment level index also expanded to 51.30 index \npoints from 48.93 index points in the preceding quarter as firms recruit \nmore workers to meet the increasing new business orders. \n Table 1: Global Purchasing Managers' Indices (PMIs) \n \n2022Q4 \n2023Q1 \nComposite Index \n48.40 \n51.73 \nEmployment Level \n48.93 \n51.30 \nNew Business Orders \n48.50 \n51.23 \nNew Export Business Orders \n50.60 \n48.37 \nFuture Output \n59.83 \n64.33 \nInput Prices \n62.27 \n59.80 \nOutput Prices \n55.77 \n55.07 \n \n \n \nManufacturing Index \n48.93 \n49.53 \nServices (Business Activity) Index \n48.47 \n52.33 \nNew Business \n48.77 \n52.13 \nNew Export Business \n47.70 \n50.20 \nFuture Activity \n60.43 \n65.00 \nEmployment \n50.73 \n51.57 \nOutstanding Business \n48.50 \n50.33 \nInput Prices \n63.47 \n61.40 \nPrices Charged \n55.77 \n55.37 \n Source: J.P Morgan \nSummary \nGlobal \nEconomic \nConditions\n \n4 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n \n \nThe services sector expanded to 52.33 index points from 48.47 index \npoints in the preceding period, driven by new business, new export \nbusiness, and future activity. In contrast, the manufacturing sector \nremained in contractionary territory, as the average manufacturing PMI \nrose, albeit marginally, to 49.53 index points from 48.93 index points in \nthe preceding quarter. \nIn the Advanced Economies (AEs), economic activities were buoyed by the \nsofter pace of inflation and easing supply-chain bottlenecks. In the UK, \noutput expanded as the PMI rose to 51.27 index points from 48.50 index \npoints in the preceding quarter, reflecting higher consumer spending and \nbusiness investment on account of lower prices. Similarly, economic \nactivities in Europe remained resilient during the quarter, as expansion \nwas recorded across most European countries, given the broad decline in \nfood and energy prices. Consequently, the PMI levels rose to 51.07 index \npoints, 52.87 index points, 55.2 index points and 51.6 index points in \nGermany, Italy, France and Spain, respectively. Similarly, higher demand \npushed Japan’s PMI to 51. 57 index points from 50.1 index points, in the \npreceding period. \nNonetheless, in the US, economic activities contracted due to tight \nfinancial conditions, resulting in lower consumer and investment \nspending, thus, dampening activities in the manufacturing and services \nsectors. Consequently, the average composite PMI rose to 49.73 index \npoints from 46.5 index points in 2022Q4. \n \n Figure 1: Selected Advanced Economies’ PMIs \n Source: Trading Economics/Various countries’ websites \nEconomic \nactivity in \nAdvanced \nEconomies \n54.9\n57.2\n48.3\n58.3\n55.4\n51.9\n52.5\n54.8\n46.5\n49.2\n50.1\n48.5\n46.8\n48.1\n49.2\n48.6\n49.7\n50.7\n51.6\n51.3\n51.1\n52.9\n55.2\n51.6\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\nUnited\nStates\nCanada\nJapan\nUnited\nKingdom\nGermany\nItaly\nSpain\nFrance\nIndex Points \n2022Q1\n2022Q4\n2023Q1\n50-point threshold\n \n5 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nThe performance of the Emerging Markets and Developing Economies \n(EMDEs) was mixed, as some economies grappled with tight financial \nconditions. Notably, economic activities expanded in China as \nmanufacturing and business activities rose, following the reopening of the \neconomy. Thus, the PMI rose to 55.43 index points from 47.90 index \npoints in the preceding quarter. Also, the PMI in India rose to 58.3 index \npoints from 57.20 index points, as factory activities picked up, given a rise \nin new business orders and export. In Turkey, despite the negative effects \nof the earthquakes on economic activities, output remained resilient, \nsupported by domestic and international policies. This resulted in an \nexpansion of the PMI to 50.37 index points from 46.70 index points in the \npreceding quarter. \nIn South Africa, the PMI contracted to 49.63 index points from 50.10 index \npoints, owing to power cuts and supply shortages, while weak consumer \ndemand in Kenya, contributed to the fall in the PMI to 49.27 index points \nfrom 50.90 index points, in the preceding quarter. The PMI in Ghana, at \n49.43 index points, reflected a softer pace of contraction from 45.43 index \npoints, owing to relatively high consumer prices and production costs. \n Figure 2: PMI in Selected EMDEs \n Source: Trading Economics/Various countries’ websites. \n \n1.2 Global Inflation \nInflationary pressure, though abating, remained elevated. Headline \ninflation moderated due to monetary policy tightening, lower crude oil \nprices, and weaker consumer demand. In most Advanced Economies, \nheadline inflation declined, driven by lower energy and food prices, \npersistent monetary policy tightening, and the easing of global supply \nchain disruptions. In the US, inflation moderated to 5.81 per cent from \nEconomic \nactivity in \nEMDEs \nAdvanced \nEconomies \n53.7\n46.3\n53.6\n48.0\n51.1\n47.7\n51.3\n50.1\n49.2\n50.3\n50.8\n47.9\n57.2\n47.9\n50.1\n50.7\n51.0\n46.7\n45.4\n50.9\n50.1\n53.2\n58.3\n55.4\n49.6\n50.3\n51.5\n50.4\n49.4\n49.3\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\nBrazil\nRussia\nIndia\nChina\nSouth\nAfrica\nMexico\nIndonesia\nTurkey\nGhana\nKenya\nIndex Points \n2022Q1\n2022Q4\n2023Q1\n50-point threshold\n \n6 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n7.10 per cent in 2022Q4, due to lower food and energy prices and the \nculminating effect of several policy rate hikes. Similarly, in Canada, \nheadline inflation fell to 5.59 per cent from 6.67 per cent in 2022Q4, \nfollowing a sustained tight monetary policy stance and lower crude oil \nprices. In the euro area, average inflation fell in France, Italy, Spain and \nGermany to 6.00, 9.56, 5.96 and 8.24 per cent, induced by lower cost of \nfood, energy, transportation and housing. Inflation eased in the UK to 9.00 \nper cent from 9.37 per cent in 2022Q4, owing to reduced cost of transport, \ngasoline, housing and furniture. Likewise, in Japan, inflation moderated to \n3.80 per cent from 3.83 per cent in 2022Q4. \n Figure 3: Inflation Rates in Selected Advanced Economies \n Source: OECD, Trading Economics \n \nIn Emerging Markets and Developing Economies (EMDEs), inflation \nmoderated due to lower food prices. China’s inflation rate fell to 1.55 per \ncent from 1.83 per cent, in the preceding period, driven by a slowdown in \nthe cost of food. In South Africa, consumer prices fell to 7.27 per cent from \n7.68 per cent in the preceding quarter, due to moderation in transport, \nenergy and food prices. Inflation declined in Indonesia to 5.24 per cent \nfrom 5.55 per cent in 2022Q4, driven by lower cost of food and transport. \nIn Turkey, inflation remained substantially elevated at 54.46 per cent, \nnonetheless gradually \nmoderating \ndue \nto \ndeclining \ncosts \nof \ntransportation, housing and utility. Largely, due to the base effect on \naccount of the Russia-Ukraine war, inflation in Russia fell significantly to \n8.77 per cent from 12.17 per cent in 2022Q4. Contrarily, in India, retail \nprices edged up to 6.16 per cent from 5.66 per cent in 2022Q4 due to \nhigher food prices. \n \n \nEmerging \nMarkets and \nDeveloping \n8.0\n5.8\n0.9\n5.5\n3.7\n4.8\n5.7\n7.9\n7.1\n6.7\n3.8\n9.4\n6.1\n8.6\n11.8\n6.6\n5.8\n5.6\n3.8\n9.0\n6.0\n8.2\n9.6\n6.0\n0.0\n2.0\n4.0\n6.0\n8.0\n10.0\n12.0\n14.0\nUnited\nStates\nCanada\nJapan\nUnited\nKingdom\nFrance Germany\nItaly\nSpain\nPer cent (%)\n2022Q1\n2022Q4\n2023Q1\n \n7 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n Figure 4: Inflation Rates in Selected EMDEs \n \nSource: OECD, Trading Economics and Staff Computations \n \n \n1.3 \nGlobal Financial Markets Development \nGlobal financial conditions eased, despite a tight monetary policy stance, \nas fears of a possible recession in the Advanced Economies ebbed and \ninflation softened. Global equities were bullish during the quarter on the \nback of the resilience of the tech and energy sectors, overcoming the \nturbulence in the banking sector. In the fixed-income space, the 10-year \ngovernment bond yield rallied, as prices rose while the yield fell. Equity \nmarkets in North America, Europe, and Japan notched up at the end of the \nquarter. Specifically, in the US markets, the NASDAQ, S&P 500 and Dow \nJones rose by 20.5, 7.0 and 0.4 per cent, respectively, with strong \nperformance in tech stocks. This was attributed to the swift containment \nof systemic risk associated with the collapse of Silicon Valley Bank, which \nswayed market confidence, amid optimism that the Fed would halt \ninterest rate hikes. In Canada, the S&P/TSX rose by 3.7 per cent, driven by \nthe gains recorded in information technology, due to improved investor \noptimism. Similarly, the EURO STOXX 50 rose by 13.8 per cent, buoyed by \na strong recovery of domestically focused sectors, following the release of \ndata showing that the economy was performing better than earlier \nforecast. \nThe lead indices of the Spanish, Italian, French and German stock markets \nrose by 12.2, 14.4, 13.1 and 12.5 per cent, respectively. Gains were driven, \nmainly, by the information technology, consumer discretionary stocks and \ncommunication services sectors. The UK FTSE-100 also gained 2.4 per \ncent, owing to greater market optimism, as the economy performed \nbetter than expected. In Japan, the depreciation of the yen buoyed market \n1.10\n5.40\n54.80\n5.80\n2.30\n7.30\n10.70\n11.50\n1.83\n5.66\n78.10\n7.68\n5.55\n8.00\n6.10\n12.17\n1.55\n6.16\n54.46\n7.27\n5.24\n7.50\n5.30\n8.77\n0.00\n10.00\n20.00\n30.00\n40.00\n50.00\n60.00\n70.00\n80.00\n90.00\nChina\nIndia\nTurkey\nSouth\nAfrica\nIndonesia\nMexico\nBrazil\nRussia\nper cent (%)\n2022Q1\n2022Q4\n2023Q1\n \n8 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nsentiment for export-based companies. Consequently, the NIKKEI 225 and \nTOPIX gained 7.5 and 5.9 per cent, respectively. \nWithin the EMDEs, performance of equity markets was mixed. Mexico’s \nMEXBOL index inched up by 11.2 per cent, owing to improved economic \ndata that spurred confidence in the economy. Renewed optimism \nfollowing the reopening of the economy and the easing of regulatory \npressure on Internet services led to a rise in the Chinese Shanghai Stock \nExchange-A by 7.2 per cent. The South African JSE All-Share Index rose by \n4.2 per cent, propelled by gains in financials, tech and resource-link areas. \nOn the flip side, some equity markets dipped during the quarter. The \nBrazilian BOVA11 BZ fell by 7.0 per cent, as investors cautiously assessed \nthe new administration’s plan for the economy. India’s BSE and the \nTurkish BORSA Istanbul 100 indices fell by 20.9 and 12.8 per cent, \nrespectively. The plunge in India’s equity market was triggered, largely, on \naccount of alleged unethical practices against a major business \nconglomerate in the country. Equities declined in Turkey as investors fret \nover the uncertainty associated with the presidential elections, amid the \ndevastation caused by the February earthquake. \n Figure 5: Key Global Stock Indices \n Source: Bloomberg. \n \nLong-term government treasury bond yields fell in most advanced and \nemerging economies. Thus, their prices rose, influenced by the \nexpectation of a slowdown in monetary policy rate hikes in several \neconomies. In the US and Canada, the 10-year Treasury yield dropped to \n3.47 and 2.90 per cent, respectively, from 3.88 and 3.30 per cent, in the \npreceding quarter. Similarly, in the UK and the euro area, the 10-year \ngovernment bond yield dropped to 3.49 and 2.29 per cent from 3.66 and \n2.57 per cent, respectively. \n \n-30\n-20\n-10\n0\n10\n20\n30\n40\n50\n60\nUS - S&P\n500\nUS -\nNasdaq-100\nJapan -\nNIKKEI 225\nCanada\nGermany -\nDAX\nItaly\nBrazil\nIndia - BSE\nIN\nSouth Africa\n- JALSH\nIndonesia -\nJCI Index\nPer cent\nGrowth in 2022Q4\nGrowth in 2023Q1\n \n9 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nWithin the EMDEs, the 10-year bond yields exhibited mixed \ndevelopments. For instance, in Mexico and India, the yield fell by 0.18 and \n0.02 percentage point to 8.84 and 7.31 per cent, respectively, from their \nlevels in the preceding quarter. The decline was due, mainly, to rise in \nsubscription by foreign investors. In Indonesia, the 10-year government \nbond yield declined to 6.77 per cent from 6.92 per cent in 2022Q4. \nHowever, the 10-year bond yield in China rose marginally by 0.01 \npercentage point to 2.85 in 2023Q1, following investor optimism on the \nreopening of the economy. Similarly, bond yields in Brazil, Turkey and \nSouth Africa rose to 6.27, 11.79 and 11.04 per cent from 6.17, 10.92 and \n10.79 per cent, respectively. \n \nFigure 6: 10-year Government Bond Yields for Selected Countries \nSource: Bloomberg \n \nSelected emerging market currencies depreciated against the US dollar \nduring the review period. The Russian ruble and South African rand \ndepreciated by 14.0 and 0.8 per cent, respectively, relative to their levels \nin the preceding quarter. The depreciation of the Russian ruble was due \nto lower sales of foreign exchange by exporters, while the depreciation of \nthe South African rand was due to a firmer U.S. dollar and strong U.S. \nlabour data. In contrast, the Chinese RMB appreciated by 3.9 per cent \nbased on a bullish economic recovery outlook. \n \n5.1\n16.0\n6.8\n2.8\n10.0\n8.3\n6.7\n20.9\n2.3\n1.6\n0.2\n2.4\n0.5\n0.5\n1.0\n2.0\n1.4\n6.2\n16.0\n7.3\n2.8\n10.8\n9.0\n6.9\n10.9\n3.9\n3.7\n0.4\n3.3\n2.6\n2.6\n3.1\n4.7\n3.6\n6.3\n16.0\n7.3\n2.9\n11.0\n8.8\n6.8\n11.8\n3.5\n3.5\n0.3\n2.9\n2.3\n2.3\n2.8\n4.1\n3.3\n-2.0\n0.0\n2.0\n4.0\n6.0\n8.0\n10.0\n12.0\n14.0\n16.0\n18.0\n20.0\n22.0\nBrazil\nRussia\nIndia\nChina\nSouth Africa\nMexico\nIndonesia\nTurkey\nUnited States\nUnited Kingdom\nJapan\nCanada\nEuro Area\nGermany\nFrance\nItaly\nSpain\nEmerging and Developing Economies\nAdvanced Economies\nPer cent (%)\n2022Q1\n2022Q4\n2023Q1\nNaira against \nEmerging Market \n \n10 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n Figure 7: EMEs Currency Values to the US dollar \n Sources: Central Bank Nigeria & Reuters \n \n Table 2: EMEs Currency Rates to the US dollar \n \nChinese \nRMB \nNigerian \nNaira \nSouth \nAfrican \nRand \nRussian \nRuble \n2022Q1 \n6.35 \n416.34 \n15.23 \n88.83 \n2022Q4 \n7.11 \n445.71 \n17.62 \n63.03 \n2023Q1 \n6.85 \n460.93 \n17.76 \n73.3 \n Sources: Central Bank of Nigeria & Reuters \n \n1.4 \nGlobal Commodity Market Developments \nTotal world crude oil supply declined as OPEC+ maintained its decision to \nadjust downward the overall production by 2.0 mbpd. Total world crude \noil supply declined by 1.06 per cent to 100.11 mbpd in 2023Q1, compared \nwith 101.18 mbpd in the preceding quarter. The fall in world crude oil \nsupply was due, largely, to lower supply from non-OECD countries, \nparticularly OPEC. Non-OECD supply declined by 1.99 per cent to 66.50 \nmbpd, from 67.85 mbpd in 2022Q4. However, total OECD supply rose by \n0.87 mbpd to 33.61 mbpd in 2023Q1, from 33.32 mbpd in the preceding \nquarter. \nOPEC’s crude oil supply fell by 1.6 per cent to 28.46 mbpd in 2023Q1, from \n28.92 mbpd in the preceding quarter. The decline was due, mainly, to \nmember countries’ compliance with the OPEC+ decision to reduce \nproduction by 2.0 mbpd, starting in November 2022. On the demand side, \nworld crude oil demand rose by 0.3 per cent to 10.34 mbpd in 2023Q1, \nfrom 101.00 mbpd in the preceding quarter. The rise was on account of \nincreased demand from China and India. \n-30\n-20\n-10\n0\n10\n20\n30\n40\nChinese RMB\nNigerian Naira\nSouth African\nRand\nRussian Ruble\nDepreciation/Appreciation\nQ4 2021\nQ1 2022\nQ2 2022\nQ3 2022\nQ4 2022\nQ1 2023\nWorld Crude Supply \nand Demand \n \n11 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nCrude oil spot prices fell, due to uncertainties in the US banking sector. The \naverage spot price of Nigeria’s reference crude oil, the Bonny Light (34.9° \nAPI), fell by 7.8 per cent to US$83.86 pb in 2023Q1, from US$90.98 pb in \nthe preceding quarter. The prices of Brent at US$81.75 pb, Forcados at \nUS$84.29 pb, West Texas Intermediate (WTI) at US$77.46, pb and OPEC \nReference Basket (ORB) at US$80.55 pb, all exhibited similar trends as the \nBonny Light. The decline in crude oil prices was due, largely, to investors’ \npessimism arising from fears that the collapse of some US banks would \nhave a wider systemic impact on US demand for crude oil. \n Figure 8: Quarterly Crude Oil Prices \n Source: Reuters \n \nDevelopments in agricultural prices were mixed in the first quarter of 2023. \nAt 123.6 index points (January 2010=100), the All Commodities Index was \n0.9 per cent higher than its level in the preceding quarter. The increase in \nthe overall index was driven, largely, by the rise in the prices of cocoa, \nrubber and coffee by 11.0, 6.9 and 6.3 per cent, respectively. The rise in \nthe prices of the commodities was on account of inclement weather and \nlabour shortages that affected supply in major producing countries. \nConversely, the prices of wheat, cotton and soya beans decreased by 8.2, \n2.2 and 0.8 per cent, respectively, on the back of ample supply by leading \nexporters of the commodities. \n \n \n \n \n \n \n \nAgricultural \nCommodity Prices \nCrude Oil \nPrices\n0\n20\n40\n60\n80\n100\n120\n140\nQ1 2022\nQ2 2022\nQ3 2022\nQ4 2022\nQ1 2023\nUS$ per barrel\nBonny Light\nBrent\nForcados\nWTI\nOpec Basket\n \n12 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nTable 3: Indices of Average World Prices of Nigeria's Major \nAgricultural Export Commodities for 2023Q1 (in dollars; Jan. \n2010=100) \nCommodity \n2022Q1/a \n2022Q4/a \n2023Q1/b \n% Change \n \n(1) & (3) \n(2) & (3) \n \n \n1 \n2 \n3 \n4 \n5 \n \nAll Commodities \n141.2 \n122.5 \n123.6 \n-12.5 \n0.9 \n \nCocoa \n70.7 \n68.4 \n75.9 \n7.3 \n11 \n \nCotton \n177.3 \n129.8 \n127 \n-28.3 \n-2.2 \n \nCoffee \n153.8 \n137.2 \n145.8 \n-5.2 \n6.3 \n \nWheat \n207.3 \n206.6 \n189.7 \n-8.5 \n-8.2 \n \nRubber \n58.3 \n42.9 \n45.8 \n-21.5 \n6.9 \n \nGroundnut \n123.8 \n136.6 \n143.6 \n16 \n5.1 \n \nPalm Oil \n186.3 \n111.3 \n114.9 \n-38.3 \n3.2 \n \nSoya Beans \n152.1 \n146.9 \n145.8 \n-4.1 \n-0.8 \n \nSources: (a) World Bank Pink Sheet (b) Staff Estimates. \n \n \nAverage spot prices of gold, silver and platinum increased, following \nincreased demand for precious metals. The average spot prices per ounce \nof gold, silver and platinum rose by 9.2, 6.0 and 1.8 per cent to sell at \nUS$1,890.51, US$22.57 and US$990.62, from US$1,731.77, US$21.29 and \nUS$972.92, respectively, in the preceding quarter. The increase in the \nprices of the precious metals was due to higher demand for the metals as \nsafe haven assets, due to the banking crisis in the US. However, the price \nof palladium declined by 19.2 per cent to sell at US$1,563.44 per ounce, \nfrom US$1,934.29 per ounce in the preceding quarter. The price of the \npalladium declined due to falling demand from the auto industry, \nfollowing the increasing shift to the production of electric vehicles, and \nthe substitution of platinum in the industry. \n Figure 9: Price Changes in Selected Metals (per cent) \n \n9.2\n6.0\n1.8\n-19.2\n0.7\n-6.0\n-3.5\n-32.8\n-35.0\n-30.0\n-25.0\n-20.0\n-15.0\n-10.0\n-5.0\n0.0\n5.0\n10.0\n15.0\nGold\nSilver\nPlatinum\nPalladium\nWith corresponding quarter\nWith preceding quarter\n \n13 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n1.5 \nMonetary Policy Stance \nMonetary policy tightening continued in the quarter, as most central banks \ncontinued to raise benchmark rates to rein in inflation. The US Federal \nReserve raised policy rates by 33 basis points to 4.83 per cent, during the \nquarter, as inflation remained elevated and labour market conditions \nremained tight. Also, the Bank of England and the European Central Bank \nraised interest rates twice during the quarter. While the former hiked the \nrate by 50 bps and 25 bps, the latter maintained a more hawkish stance, \nhiking by 50 bps in each instance. Similarly, the Bank of Canada increased \nits rate by 25 bps to 4.50 per cent and signalled a pause in monetary \ntightening as inflationary pressures eased. In India, the hiking cycle \ncontinued as the Reserve Bank increased its key policy rate to 6.50 per \ncent. The Bank of Mexico also increased its policy rate by a cumulative 75 \nbasis points to 11.25 per cent. \nHowever, the Central Bank of Turkey sustained an accommodative stance \nto ease financial conditions as the authorities continued to favour \nunorthodox monetary policy measures. Consequently, the repo rate was \nlowered by 50 bps during the quarter. On the other hand, the central \nbanks of Brazil, Russia and China left their policy rates unchanged at 13.75 \n,7.50 and 3.65 per cent, respectively. Japan also retained its policy rate at \n-0.10 per cent. \n Table 4: Central Bank Policy Rates (per cent) \nCountry \n2022Q3 \n2022Q4 \n2023Q1 \nUnited \nStates \n3.25 \n4.50 \n4.83 \nUnited \nKingdom \n2.25 \n3.50 \n4.25 \nJapan \n-0.10 \n-0.10 \n-0.10 \nCanada \n3.25 \n4.25 \n4.50 \nEuro Area \n1.25 \n2.50 \n3.50 \nChina \n3.65 \n3.65 \n3.65 \nIndia \n5.90 \n6.25 \n6.50 \nMexico \n9.25 \n10.50 \n11.25 \nIndonesia \n4.25 \n5.50 \n5.75 \nTurkey \n12.00 \n9.00 \n8.50 \nBrazil \n13.75 \n13.75 \n13.75 \nRussia \n7.75 \n7.50 \n7.50 \nSouth \nAfrica \n6.25 \n7.25 \n7.75 \n Source: Various Central Banks’ websites \n \n \n14 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n \n2.0 DOMESTIC ECONOMIC DEVELOPMENTS \n2.1 Real Sector Developments \nThe economy grew at a slower pace in 2023Q1, driven mainly by activities \nin the non-oil sector. Growth was driven by election-related expenditures \nwhich fueled economic activities, though constrained, mainly, by supply \nshocks that accompanied the currency redesign exercise, amid other \nheadwinds. Headline inflation surged further on account of higher energy \nprices and limited access to cash that exacerbated supply shocks. \nThe economy was characterised by an increased push by the fiscal \nauthorities to ramp up the stock of infrastructure in the country in 2023Q1, \ngiven the transition to a new democratic regime. Aggregate demand was \nspurred by election-related expenditure, thus, supporting growth in the \nquarter. However, supply bottlenecks, caused mainly by the Russia-\nUkraine crisis, and supply shocks that accompanied the currency redesign \nexercise, amid other headwinds, slowed the pace of growth in the quarter. \nConsequently, real GDP grew by 2.31 per cent in 2023Q1 (year-on-year), \ncompared with 3.52 per cent in 2022Q4, driven by the non-oil sector, \nwhich grew by 2.77 per cent. However, growth was dragged by the oil \nsector, despite the modest improvement recorded in the sector. The oil \nsector contracted by 4.21 per cent, compared with a contraction of 13.38 \nper cent in the preceding quarter. The lower contraction was on account \nof renewed efforts to tackle vandalism and crude oil theft, which \nsupported increased crude oil production to 1.28 million barrels per day \nfrom 1.15 mbpd produced in 2022Q4. However, persisting infrastructural \nand security challenges continued to weigh on the sector’s output. \nSummary \nDomestic Output \nand Economic \nActivities \n \n15 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n Figure 10: Real GDP Growth Rate, 2021Q1-2023Q1, Year-on-Year \n Source: National Bureau of Statistics \n \n2.1.1 Sectoral Performance \nThe Services and Industry sectors grew, while the agricultural sector \ncontracted. The services sector continued to drive growth, contributing \n2.44 percentage points to the realised growth. The sector grew at a slower \npace by 4.35 per cent in 2023Q1, compared with 5.69 per cent in 2022Q4. \n Figure 11: Sectoral Growth Rate of Real GDP, 2021Q1-2023Q1 \n Source: National Bureau of Statistics \n \nWithin the Services sector, Information & Communications, Financial & \nInsurance, Trade and Transport & Storage subsectors drove overall \ngrowth, contributing 1.67, 0.92, 0.21 and 0.10 percentage points, \nrespectively. The sub-sectors grew by 10.32, 21.37, 1.31 and 9.36 per cent, \nrespectively. The growth witnessed in the various sub-sectors, particularly \nin the ICT sub-sector was due majorly to the increasing number of internet \n-30\n-25\n-20\n-15\n-10\n-5\n0\n5\n10\n2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 2023Q1\nPercent (%)\nOil GDP\nNon-oil GDP\nTotal GDP\n2.28\n1.30\n1.22\n3.58\n3.16\n1.20\n1.34\n2.05\n-0.90\n0.94\n-1.23\n-1.63\n-0.05\n-6.81\n-2.30\n-8.00\n-0.94\n0.31\n-0.39\n9.27\n8.41\n5.58\n7.45\n6.70\n7.01\n5.69\n4.35\n-10.00\n-8.00\n-6.00\n-4.00\n-2.00\n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\n2021Q1\n2021Q2\n2021Q3\n2021Q4\n2022Q1\n2022Q2\n2022Q3\n2022Q4\n2023Q1\nPer cent\nAgriculture\nIndustry\nServices\nTotal GDP\n \n16 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nservice subscribers, mobile service subscribers, and the growth in \nbroadband penetration. Also, the effect of the electioneering-induced \ntransport activities, and the increased patronage of fintech services due to \nthe currency redesign policy, contributed to the growth in the Services \nsector. \n \nThe Agricultural sector contracted by 0.90 per cent, compared with a \ngrowth of 2.05 per cent in the preceding quarter, on account of the large \ndecline in livestock production. This was occasioned by the persisting \nsecurity challenges affecting cattle husbandry, and the limited access to \ncash that dominated the quarter, thereby, constraining economic \nactivities, since most of the activities within the sector are cash-driven, \nparticularly in the livestock subsector. Thus, livestock and fishery sub-\nsectors contracted by 30.57 and 2.92 per cent, compared with a \ncontraction of 1.59 and 3.02 per cent in 2022Q4, respectively. However, \ncrop production and forestry subsectors grew at a slower pace by 1.93 and \n1.24 per cent, compared with 2.41 and 1.63 per cent in 2022Q4, \nrespectively. \n \nIndustry sector performance improved, as it grew by 0.31 per cent in \n2023Q1, in contrast to a contraction of 0.94 per cent in 2022Q4. Growth \nwas witnessed in Manufacturing (1.61 per cent), Electricity (9.53 per cent), \nWater supply (5.57 per cent) and construction (3.27 per cent) sub-sectors, \ncompared with a growth of 2.83, 15.22, 8.81 and 3.80 per cent, \nrespectively in the preceding quarter. The performance of the sub-sectors \nwas on account of the combined effects of continued policy support to the \nindustry sector, as well as an uptick in investments in infrastructure which \nspurred activities in the sector, especially manufacturing. \nSpecifically, the slower growth of the Electricity sub-sector was on account \nof low water levels at the hydro generation plants, technical faults, and \nshutdown for upgrade and maintenance of generation, transmission and \ndistribution networks. The development led to a decrease in the average \nvolume of electricity generated and consumed in the quarter by 5.3 and \n1.4 per cent to 3,984.6 MW/h and 3,256.9 MW/h, respectively, from the \nlevels in the preceding quarter. \nThough the Mining and Quarrying sub-sector remained in the contraction \nregion, there was an improvement as the contraction narrowed to 3.96 \nper cent from a contraction of 11.39 per cent in the preceding quarter. \nThe Index of Industrial Production (IIP), a measure of industry \nperformance, indicated a similar performance for Industry. The index, at \n \n17 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n101.8 index points (2010=100), increased by 15.2 per cent, compared with \n88.4 index points in the preceding quarter. This was majorly attributed to \nimprovements in mining and manufacturing activities. Similarly, at 205.3 \nindex points (2010=100), the Index of Manufacturing Production rose by \n8.0 per cent, compared with 190.1 index points in 2022Q4, due partly to \nimproved demand, notably in the food, beverages and tobacco subsectors, \nfollowing the 2023 general elections. Thus, manufacturing capacity \nutilization rose by 1.2 percentage points to 56.4 per cent in 2023Q1, \nrelative to the preceding quarter. \nThe performance of sub-sectoral activities showed that 18 sub-sectors \nwitnessed growth, while 4 sub-sectors contracted. \nFigure 12: Top 16 Contribution of Subsectors to GDP and Growth Rates, 2023Q1 \n Source: National Bureau of Statistics \n \n \nFigure 13: Least Contributing Subsectors to GDP and Growth Rates, 2023Q1 \n Source: National Bureau of Statistics \n1.3%\n1.4%\n1.6%\n1.8%\n1.8%\n3.3%\n3.6%\n9.1%\n10.0%\n10.3%\n13.7%\n16.4%\n21.1%\n37.8%\n96.3%\n167.1%\n(5.57%) Water supply, sewage, waste Mang.\n(0.72%) Education\n(5.47%) Arts, Entertainment & Recreation\n(2.46%) Human Health & Social Services\n(9.53%) Electricity,Gas,Steam & Air conditioner\n(2.03%) Public Administration\n(3.59%) Accommodation and Food Services\n(1.70%) Real Estate\n(3.08%) Professional, Scientific & Technical…\n(9.36%) Transportation and Storage\n(3.27%) Construction\nManufacturing (1.61%)\n(1.31%) Trade\n(1.93%) Crop Production\n(21.37%) Financial and Insurance\n(10.32%) Information and Communication\nGrowth rate\nContribution\n-0.02\n-0.26\n-0.56\n-0.81\n-1.00\n-0.50\n0.00\nFishing (-2.92%)\nMining and Quarrying (-3.96%)\nLivestock (-30.57%)\nOther Services (-20.05%)\nGrowth rate\nContribution\n \n18 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n2.1.2 Consumer Prices \nHeadline inflation remained elevated, following increase in both food and \nnon-food components of the CPI basket. The rise was due to persisting high \nenergy, especially Petroleum Motor Spirit (PMS) and other input costs, \nwhich impacted negatively on production, transport and logistics costs. \nAlso, limited access to cash constrained economic activities, particularly, \nsmall and medium enterprises (SMEs), thus, driving further increase in \nprice. Consequently, headline inflation (year-on-year) rose to 22.04 per \ncent in 2023Q1, compared with 21.34 per cent in 2022Q4. \n \n Figure 14: Headline, Food and Core Inflation (year-on-year) \n Source: NBS and Staff Estimates \n \nCore inflation inched up to 19.86 per cent in 2023Q1, compared with \n18.49 per cent in the preceding quarter. The rise was attributed to the \ncontinuous increase in the cost of imported and locally manufactured \ngoods, due to the pass-through effect of high global inflation, tighter \neconomic conditions, exchange rate constraints, higher energy and input \ncosts, as well as other structural factors. \n \nFood inflation also rose by 24.45 per cent from 23.75 per cent in the \npreceding quarter. The rise was due, largely, to demand pressures amid \nsupply constraints, which led to increase in the prices of both imported \nand processed foods. Also, the ripple effect of higher energy prices and \nincreased transportation/logistics costs contributed to the rise in food \ninflation. \n \nHeadline \nInflation \nFood \nInflation\nCore \nInflation\n0.0\n5.0\n10.0\n15.0\n20.0\n25.0\n30.0\nPercent (%)\nHeadline\nCore\nFood\n \n19 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n2.1.3 Socio-Economic Developments \nThe Federal Executive Council (FEC) approved ₦95.80billion for the \ndualisation of Akure/Ita Ogbolu-Iju/Ado-Ekiti Road, linking Ekiti and Ondo \nstates. The first section of the road project on the Ondo side was awarded \nat the cost of ₦46.60billion, while the balance of ₦49.20billion would be \nexpended on the second section of the project from the Ekiti state border. \nFurthermore, BUA Group received approval from the Federal Government \nto construct four major roads worth ₦330.00billion under the Federal \nGovernment Infrastructure Tax Credit Scheme (Executive Order 7). The \nroads to be constructed are Kosubosu-Kaiama-Bode Saadu highway \n(130km); Bacita-Shonga-Lafiagi highway (83km); Eyenkorin-Afon-Offa-\nOdo Ottin highway (49km); and Okuta-Bukuro Road (32km) which \nconnects to Benin Republic. The projects upon completion will facilitate \nthe movement of goods and people, especially agricultural produce, with \nhuge potentials for economic development and food security. \n \nThe Federal Government approved the sum of ₦320.34billion as \nintervention fund to public tertiary institutions across the country. To this \nend, the sum of ₦1.15billion will be disbursed to each university. This \ncomprises ₦954.70million as annual direct disbursement and \n₦200.00million as zonal intervention. Similarly, each polytechnic would \nrecieve ₦699.30million, comprising ₦569.30million as annual direct \ndisbursement and ₦130.00million as zonal intervention. Furthermore, \neach college of education would recieve ₦800.00million, comprising \n₦670.00million as annual direct disbursement and ₦130.00million as \nzonal intervention. \n \n2.1.4 Domestic Crude Oil Market Developments \nDomestic crude oil production and export rose, because of increased \npipeline surveillance. Nigeria’s average crude oil production and export \nrose by 11.3 and 18.6 per cent to 1.28 mbpd and 0.83 mbpd in 2023Q1, \nfrom 1.15 mbpd and 0.70 mbpd, respectively, in the preceding quarter. \nThe rise in crude oil production and export was due to increased \nsurveillance of the country’s pipeline infrastructure, which curtailed \nincidences of crude oil theft and sabotage. However, the production level \nfell short of the OPEC quota of 1.742 mbpd, by 462,000 bpd on account of \ncontinued technical, infrastructural and persisting security challenges. \n \n \nEducatio\nCrude Oil \nProduction \nTransportation \n \n20 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n \n \n \n \n \n \n \n \n \n2.2 \nFISCAL SECTOR DEVELOPMENTS \nThe fiscal performance in 2023Q1 was impaired by low oil revenue \nrealisation. Consequently, the retained revenue of the FGN fell by 10.7 per \ncent, relative to 2022Q4, and was 46.1 per cent below the quarterly target. \nFGN aggregate expenditure also declined by 1.3 and 36.0 per cent, relative \nto the preceding quarter and the quarterly target, respectively. Thus, the \nFGN overall deficit widened relative to 2022Q4, but narrowed by 22.1 per \ncent when compared with the proportionate budget. Consolidated public \ndebt, as at end-December 2022, stood at N46,250.37billion (or 22.8 per \ncent of GDP). \n \n2.2.1 Federation Account Operations \nFederation Account earnings declined, due to lower-than-anticipated \nreceipts from both oil and non-oil revenue sources. At N3,478.79billion, \ngross federation revenue fell below the levels in 2022Q4 and the budget \nbenchmark by 0.4 and 26.6 per cent, respectively. Non-oil revenue \ncontinued to dominate Government revenue, accounting for 61.4 per \ncent, while oil receipts accounted for 38.6 per cent. \n \nOil revenue, at N1,341.12billion, declined by 3.0 and 43.5 per cent, \nrelative to 2022Q4 and quarterly target. The subpar performance was \nindicative of revenue shortfalls from Petroleum Profit Tax and Royalties, \nfollowing lower domestic crude production. \n \nConversely, non-oil receipts, at N2,137.67billion, improved against the \npreceding quarter by 1.2 per cent, but was 9.6 per cent below the \nquarterly target of N2,365.91billion. The improvement was attributed to \n \nSummary \n \n21 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nthe strong performance of value-added tax (VAT), which exceeded \ncollections in the preceding quarter and quarterly target by 13.9 and 21.4 \nper cent, respectively. Generally, non-oil revenue performance in the \nquarter, reflected seasonality in tax returns. \n \n \n \n22 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nTable 5: Federally Collected Revenue and Distribution (N \nBillion) \n \n2022Q1 \n2022Q4 1/ \n2023Q1 1/ \n Budget \nFederation Revenue (Gross) \n2,275.93 \n 3,494.46 \n 3,439.79 \n 4,741.02 \nOil \n799.10 \n1,382.82 \n1,341.12 \n2,375.11 \nCrude Oil & Gas Exports \n0.00 \n0.00 \n0.00 \n202.71 \nPPT & Royalties \n610.94 \n1,361.84 \n1,324.70 \n1,592.74 \nDomestic Crude Oil/Gas Sales \n162.70 \n0.00 \n0.00 \n126.13 \nOthers \n25.46 \n20.98 \n16.42 \n453.53 \nNon-oil \n1,476.83 \n2,111.64 \n2,137.67 \n2,365.91 \nCorporate Tax \n343.97 \n569.46 \n546.20 \n496.95 \nCustoms & Excise Duties \n385.72 \n434.32 \n389.67 \n464.64 \nValue-Added Tax (VAT) \n570.35 \n650.83 \n741.32 \n610.45 \nIndependent Revenue of Fed. Govt. \n168.00 \n448.24 \n412.55 \n554.05 \nOthers* \n8.79 \n8.79 \n47.93 \n239.82 \nTotal Deductions/Transfers** \n608.72 \n1,287.47 \n1,324.80 \n1,191.99 \nFederally Collected Revenue \n1,667.21 \n2,206.99 \n2,153.99 \n3,549.03 \nLess Deductions & Transfers \nplus: \n \n \n \n \nAdditional Revenue \n197.83 \n132.08 \n309.04 \n52.44 \nBalance in Special Account from 2019 \n0.00 \n0.00 \n0.00 \n0.00 \nExcess Crude Revenue \n0.00 \n0.00 \n115.00 \n0.00 \nNon-oil Excess Revenue \n187.48 \n119.14 \n49.20 \n52.44 \nExchange Gain \n10.35 \n12.94 \n144.84 \n0.00 \nTotal Distributed Balance \n1,865.04 \n2,339.07 \n2,463.03 \n3,601.47 \nFederal Government \n720.21 \n915.11 \n929.60 \n1527.27 \n Statutory \n640.54 \n824.20 \n826.05 \n1,442.44 \n VAT \n79.67 \n90.91 \n103.55 \n84.83 \nState Government \n708.46 \n883.98 \n954.46 \n1296.95 \n Statutory \n324.90 \n426.16 \n439.84 \n753.86 \n VAT \n265.55 \n303.03 \n345.16 \n282.76 \n 13% Derivation \n118.01 \n154.79 \n169.46 \n260.33 \nLocal Government \n436.37 \n539.99 \n578.97 \n777.26 \n Statutory \n250.48 \n327.87 \n337.36 \n579.33 \n VAT \n185.89 \n212.12 \n241.61 \n197.93 \nSource: OAGF and CBN Staff Estimates \nNote: * Includes Education Tax, Customs Special Levies (Federation Account), National Technology \nDevelopment, Customs Special Levies, Solid Mineral & Other Mining revenue, and other non-regular \nearnings; ** Deductions include cost of revenue collections and JVC cash calls; while transfers entail \nprovisions for FGN Independent revenue and other Non-Federation revenue. \n \n \nA net distributable balance of N2,463.03billion was disbursed to the three \ntiers of government, after accounting for statutory deductions and \ntransfers, as well as additional revenue from oil and non-oil excess \nrevenue, and exchange gain. Of this amount, the Federal Government got \nN929.60billion, while state and local governments received N954.47billion \nand N578.97billion, respectively. Of the disbursement to states, the sum \nof N169.46billion was distributed to oil-producing states as 13.0 per cent \nDerivation Fund. Total disbursement to the federating units was 5.3 per \n \n23 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \ncent above allocation in 2022Q4, but 31.6 per cent below the quarterly \nestimate. \n \n2.2.2 Fiscal Operations of the Federal Government \nThe retained revenue of the FGN declined on the back of lower receipt from \nFGN independent revenue sources and allocation from the Federation \nAccount. Estimated retained revenue of the FGN stood at \nN1,342.15billion, 10.7 per cent below receipts in 2022Q4 and 46.1 per \ncent short of the quarterly target. Receipt into the Federation Account and \nFGN independent revenue fell by 9.3 and 8.0 per cent below collections in \nthe preceding quarter and were 36.1 and 62.0 per cent short of the \nquarterly target, respectively. Other revenue components, excess oil \nrevenue and exchange gain, at N60.58billion and N66.56billion, \nrespectively, augmented revenue realisations in the quarter. \n \n Table 6: FGN Retained Revenue (N Billion) \n \n \n2022Q1 \n2022Q4 \n2023Q1 \nBudget \nFGN Retained \nRevenue \n  \n1,093.68 \n1,502.52 \n1,342.15 \n2,492.30 \nFederation Account \n536.88 \n762.59 \n691.53 \n1,082.68 \nVAT Pool Account \n79.67 \n90.91 \n103.55 \n79.17 \nFGN IR \n  \n168.00 \n448.24 \n412.55 \n1,086.15 \nExcess Oil Revenue \n0.00 \n0.00 \n60.58 \n0.00 \nExcess Non-Oil \n98.76 \n6.06 \n7.38 \n0.00 \nExchange Gain \n4.90 \n55.55 \n66.56 \n0.00 \nOthers* \n  \n205.47 \n139.17 \n0.00 \n244.29 \nSource: Office of the Accountant-General of the Federation (OAGF) \nNote: * Others include revenue from Special Accounts, Special Levies and share of dividend. \nThe Budget figures are provisional, IR = Independent Revenue \n \n \nFollowing a decline in interest payments, the provisional aggregate \nexpenditure of the FGN decreased by 1.3 and 36.0 per cent, relative to \n2022Q4 and the quarterly budget, respectively. The provisional aggregate \nexpenditure of the FGN in 2023Q1 amounted to N2,772.98billion. A \ndecomposition of FGN spending showed that recurrent expenditure, \ncapital expenditure, and transfers accounted for 84.6, 9.8 and 5.6 per \ncent, respectively. \n \n \n \n \nFederal \nGovernment \nRetained Revenue \nFederal \nGovernment \nExpenditure \n \n24 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n \n Figure 15: Federal Government Expenditure (N Billion) \n \nSource: Office of the Accountant-General of the Federation (OAGF) and CBN Staff \nEstimates. \n \nThe fiscal operations of the FGN in 2023Q1 resulted in a deficit. At \nN1,430.83billion, the provisional fiscal deficit of the FGN was 9.6 per cent \nhigher than the level in the preceding quarter but 22.1 per cent below \nthe target. \nTable 7: Fiscal Balance (N Billion) \n \n2021Q4 \n2022Q4 \n2023Q1 \nBudget \nRetained revenue \n1,093.68 \n1,502.52 \n1,342.15 \n2,492.30 \nAggregate \nexpenditure \n4,404.44 \n2,808.58 \n2,772.98 \n4,329.85 \n Recurrent \n2,484.69 \n2,435.61 \n2,345.67 \n2,674.35 \n Non-debt \n1,178.92 \n1,217.40 \n1,220.17 \n1,418.52 \n Debt Service \n1,245.95 \n1,151.64 \n1,056.31 \n921.35 \n Capital \n1,873.05 \n242.88 \n270.71 \n1,366.85 \n Transfers \n46.71 \n130.10 \n156.60 \n288.65 \nPrimary balance \n(2,064.82) \n(154.42) \n(374.52) \n-916.21 \nOverall balance \n(3,310.77) \n(1,306.06) \n(1,430.83) \n(1,837.55) \nSource: Office of the Accountant-General of the Federation (OAGF) and CBN Staff \nEstimates \nNote: The figures are provisional. \n \n \n \n \n \n \nOverall Fiscal \nBalance \n \n25 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nGovernment borrowing in the review period remained anchored on the \nMedium-Term Debt Strategy 2020-2023 of the FGN. The total public debt \noutstanding as at the end of December 2022 was N46,250. 37billion (22.8 \nper cent of GDP). It rose by 5.0 per cent and 16.9 per cent, relative to end-\nSeptember 2022 and end-December 2021, respectively; nevertheless, \nremained within the 40.0 per cent domestic total public debt-to-GDP \nthreshold. Domestic debt accounted for 59.6 per cent of the consolidated \npublic debt, while external debt obligations constituted 40.4 per cent. Out \nof the public debt stock, FGN owed N40,912.62billion (or 88.5 per cent)1, \nwhile State governments’ domestic debt stock made up the balance of \nN5,337.75billion (11.5 per cent). \n \nOf the total FGN debt obligations, domestic debt was N22,210.36billion \n(or 54.3 per cent), while external debt was N18,702.26billion (or 45.7 per \ncent). This is against the sustained 70:30 Domestic: External debt mix \nanticipated in the prevailing medium-term debt framework. Detailed \nanalysis shows that FGN bond issues maintained its dominance, with 73.9 \nper cent of the total domestic debt, while Treasury Bills (19.9 per cent), \nFGN Sukuk (3.3 per cent), Promissory Notes (2.4 per cent), and others (0.4 \nper cent) constituted the balance. With regards to external debt holdings, \nMultilateral, Commercial and Bilateral loans accounted for 48.5 per cent, \n37.5 per cent and 12.1 per cent, respectively, while ‘other’ loans \nconstituted 1.9 per cent. Debt service obligations in 2022Q4, amounted \nto N548.86billion, compared with N1,167.02billion in 2022Q3. The decline \nwas attributed to lower demand for external borrowing. \n \n Figure 16: FGN External and Domestic Debt Composition (N Billion) \n \nSource: Debt Management Office (DMO). \n \n \n \n \nFederal \nGovernment Debt \n \n26 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n Figure 17: Composition of Domestic Debt Stock by Instrument \n \nSource: Compiled from DMO figures. \n \n \n Figure 18: Composition of External Debt Stock by Instrument \n \nSource: Compiled from DMO figures. \n \n \n \n \n \n \n \n \n \nFGN Bonds\n73.9%\nT/Bills\n19.9%\nFGN Sukuk\n3.3%\nPromissiory Notes\n2.4%\nOthers\n0.4%\nMultilateral, 48.5%\nCommercial, 37.5%\nBilateral, 12.1%\nOthers, 1.9%\n \n27 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n2.3 \nMONETARY AND FINANCIAL DEVELOPMENTS \nThe financial sector remained safe and sound on the back of sustained \nsupervision and implementation of prudential guidelines. Key monetary \naggregates grew in 2023Q1, owing to increases in both net foreign and \ndomestic assets. Banking system liquidity increased, resulting in decreased \nactivity in the standing lending facility window, increased subscription in \nboth the NTBs and FGN bonds segments, and credit expansion to key \nsectors of the economy. Key short-term interest rates showed a mixed \npattern during the quarter, a resultant effect of both hike in monetary \npolicy rate (MPR) and the relative surge in liquidity. The publication of \nfavourable 2022 full-year corporate earnings results spurred interest in the \nequities market, leading to bullish activities in the capital market. \n \n2.3.1 Monetary Developments \nReserve money fell by 0.35 per cent in 2023Q1, due to the decline in \ncurrency-in-circulation (CIC). The Bank’s naira redesign policy-induced a \ndecline in CIC by 44.1 per cent. A further decomposition of the CIC shows \nthat the value of notes and coins declined by 44.4 per cent, while the \neNaira component increased significantly by 89.8 per cent at end-March \n2023. Liabilities to Other Depository Corporations (ODCs), on the other \nhand, grew by 9.8 per cent, triggered by the 19.1 per cent growth in \nrequired \nreserves. \nConsequently, \nreserve \nmoney \ndeclined \nto \nN15,975.74billion from N16,032.05billion in the preceding quarter. \n \n Table 8: Components of Reserve Money (N Billion) \n \nMar-22 \nJun-22 \nSep-22 \nDec-22 \nMar-23 \nMonetary Base \n14,301.77 \n13,860.27 \n15,007.59 \n16,032.05 \n15,975.74 \nCurrency-In-Circulation \n3,245.60 \n3,255.56 \n \n3,228.75 \n \n3,012.06 \n1,683.50 \n Of which: \n \n \n \n \n \n Notes and coins \n3,244.59 \n3,254.21 \n3,227.27 \n3,009.51 \n1,678.66 \n eNaira \n1.01 \n1.35 \n1.48 \n2.55 \n4.84 \nLiabilities to ODCs \n11,056.17 \n10,604.71 \n11,778.84 \n13,019.99 \n14,292.24 \nMonetary Base \n (% Growth over `Preceding \nDecember) \n \n \n \n \n \n7.57 \n4.25 \n12.88 \n20.59 \n-0.35 \nBroad Money Multiplier (M3) \n \n \n \n \n \n3.19 \n3.53 \n3.29 \n3.25 \n3.42 \n Source: Central Bank of Nigeria \n \nHowever, the increase in broad money multiplier to 3.42 from 3.25 in the \npreceding quarter, amplified the monetary base, resulting in a 4.8 per cent \ngrowth in broad money supply (M3). Broad money supply stood at \nN54,634.06billion, compared with N52,155.42billion at the end of the \nSummary \nReserve Money \n \n28 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \npreceding quarter. On annualized basis, the 4.8 per cent growth in M3 \ntranslated to 19.0 per cent for the annual benchmark target, surpassing \nthe benchmark target by 1.8 percentage points. \n \n Figure 19: Composition of Currency-in-Circulation (N Billion) \n \n Source: Central Bank of Nigeria. \n \nNet foreign and domestic assets increased by 40.9 and 1.5 per cent, \ncontributing 3.3 percentage points and 1.4 percentage points, \nrespectively, to the growth in broad money supply. The rise in Net Foreign \nAssets (NFA) was due to the decline in liabilities to non-residents by \ndepository corporations by 13.7 per cent, which outweighed the 3.2 per \ncent decline in claims on non-residents. The major driver of the growth in \nNet Domestic Asset (NDA) was the 11.7 per cent growth in net claims on \ncentral government, followed by the 3.2 per cent growth in claims on \nother sectors. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0\n1\n2\n3\n4\n5\n6\n0\n500\n1,000\n1,500\n2,000\n2,500\n3,000\n3,500\nMar.-22\nJun-22\nSep-22\nDec-22\nMar-23\nNotes & Coins (LHS)\neNaira (RHS)\n \n29 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n \n Table 9: Money and Credit Growth over preceding December (%) \n \nMar-\n22 \nJun-22 \nSep-22 \nDec-22 \nMar-\n23 \nContribution \nto M3 \ngrowth \nAnnualise\nd Growth \n(Mar-23) \n2023 \nProvisional \nBenchmark \n(Mar-23) \nNet Foreign Assets \n-19.12 \n-34.68 \n-52.04 \n-54.53 \n40.94 \n3.34 \n163.76 \n38.82 \nClaims on Non-\nresidents \n-2.61 \n0.63 \n1.64 \n5.96 \n-3.15 \n-1.33 \n-12.60 \n \nLiabilities to Non-\nresidents \n10.90 \n29.51 \n45.54 \n55.43 \n-13.69 \n-4.67 \n-54.76 \n \nNet Domestic Assets \n8.58 \n21.94 \n27.80 \n36.51 \n1.54 \n1.41 \n6.16 \n \nDomestic Claims \n8.26 \n17.82 \n29.90 \n36.17 \n6.32 \n8.05 \n25.28 \n15.78 \nNet Claims on Central \nGovernment \n17.92 \n31.61 \n64.93 \n78.16 \n11.65 \n5.51 \n46.60 \n19.64 \nClaims on Central \nGovernment \n13.78 \n23.61 \n39.62 \n42.53 \n8.90 \n5.96 \n35.60 \n \nLiabilities to Central \nGovernment \n8.40 \n13.23 \n6.76 \n-3.73 \n2.30 \n0.45 \n9.20 \n \nClaims on Other \nSectors \n4.43 \n12.35 \n16.02 \n19.53 \n3.17 \n2.54 \n12.68 \n13.50 \nClaims on Other \nFinancial \nCorporations \n-0.78 \n2.91 \n7.76 \n12.02 \n6.53 \n1.11 \n26.12 \n \nClaims on State and \nLocal Government \n20.33 \n29.85 \n29.28 \n32.47 \n4.26 \n0.27 \n17.04 \n \nClaims on Public \nNonfinancial \nCorporations \n47.54 \n42.37 \n34.27 \n40.89 \n-0.45 \n-0.01 \n-1.80 \n \nClaims on Private \nSector \n3.04 \n12.64 \n16.76 \n19.95 \n2.15 \n1.17 \n8.60 \n \nTotal Monetary \nAssets (M3) \n2.75 \n10.02 \n11.00 \n17.35 \n4.75 \n4.75 \n18.99 \n17.18 \nCurrency Outside \nDepository \nCorporations \n-7.63 \n-7.46 \n-7.10 \n-12.57 \n-43.74 \n-2.15 \n-174.96 \n \nTransferable Deposits \n11.77 \n16.61 \n22.16 \n20.12 \n9.63 \n3.35 \n38.52 \n \nNarrow Money (M1) \n8.61 \n4.25 \n12.88 \n20.59 \n3.01 \n1.20 \n12.04 \n \nOther Deposits \n-1.26 \n8.19 \n6.62 \n17.61 \n5.82 \n3.46 \n23.28 \n \nBroad Money (M2) \n2.75 \n10.02 \n11.00 \n16.47 \n4.67 \n4.66 \n18.68 \n18.07 \nSecurities Other than \nShares \n1.53 \n100.00 \n100.00 \n101.00 \n7.22 \n0.09 \n28.89 \n \nTotal Monetary \nLiabilities(M3) \n2.75 \n10.02 \n11.00 \n17.35 \n4.75 \n4.75 \n18.99 \n17.18 \nSource: Central Bank of Nigeria \n \nOn the liabilities side, the growth in M3 was induced by 5.8 per cent \ngrowth in other deposits, which accounted for a 3.5 percentage points \nsurge in the monetary aggregate, followed by the 9.6 per cent growth in \ntransferable deposits, accounting for 3.4 percentage points. Currency \noutside depository corporations (CODC), significantly declined by 43.7 per \ncent in the reviewed quarter, an indication of increased adoption and \nusage of electronic payment channels in tune with the Bank’s cashless \npolicy initiative. \n \n \n \n \n \n30 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n2.3.2 Sectoral Credit Utilisation \nTotal credit to key sectors of the economy increased by 3.1 per cent to \nN30,346.13billion, compared with N29,445.87billion at end-December \n2022, driven by increased liquidity in the banking system. The Services \nsector maintained its dominance and accounted for the largest share (53.1 \nper cent), of total credit, followed by industry with 40.7 per cent, while \nagriculture accounted for the balance of 6.2 per cent. \n Table 10: Sectoral Credit Allocation \nSector \nBillion Naira \nShare of total (%) \nSep-22 \nDec-22 \nMar-23 \nSep-22 \nDec-22 \nMar-23 \nAgriculture \n1,658.04 \n1,812.47 \n1,887.95 \n5.88 \n6.16 \n6.22 \nIndustry \n11,478.45 \n12,074.31 \n12,334.84 \n40.7 \n41.01 \n40.65 \n of which \nManufacturing \n5,095.64 \n5,566.43 \n5,655.28 \n18.07 \n18.9 \n18.64 \nServices \n15,067.79 \n15,559.09 \n16,123.34 \n53.42 \n52.84 \n53.13 \n of which Finance, \nInsurance & Capital Market \n2,404.84 \n2,638.84 \n2,639.25 \n8.53 \n8.96 \n8.7 \nTrade/General \nCommerce \n2,234.73 \n2,306.31 \n2,333.42 \n7.12 \n7.52 \n7.69 \nTotal Private Sector Credit \n28,204.28 \n29,445.87 \n30,346.13 \n100.00 \n100.00 \n100.00 \nSource: Central Bank of Nigeria \n \nThe increase in banking system liquidity and enhanced access to formal \nfinancial services, especially through fintech channels, that accompanied \nthe naira redesign policy, boosted consumer credit. Thus, consumer credit \nincreased by 1.3 per cent, to N2,349.88billion from N2,318.63billion at the \nend of the preceding quarter and accounted for 8.1 per cent of total claims \nin private sector. A disaggregation of consumer credit showed that \npersonal loans stood at N1,751.60billion, or 74.5 per cent, while retail \nloans, at N598.28billion, accounted for the balance of 25.5 per cent. \n \n \n \n \n \n \n \n \n \nConsumer \nSectoral \nCredit \nUtilisation\n \n31 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n \n Figure 20: Consumer Credit Outstanding \n Source: Central Bank of Nigeria \n \n \nFigure 21: Composition of Consumer Credit \n Source: Central Bank of Nigeria. \n \n2.3.3 Financial Developments \n2.3.3.1 Money Market Developments \nBanking system liquidity grew on the net effects of fiscal and monetary \noperations. Total fiscal injection and repayment of matured CBN bills rose \nto N2,448.04billion and N309.44billion from N2,309.07billion and \nN231.19billion in the preceding quarter, respectively. Consequently, the \naverage closing net industry balance rose by 73.2 per cent to \nN486.39billion from ₦280.86billion in the preceding quarter. \n \n \nIndustry \nLiquidity \n6.5\n7\n7.5\n8\n8.5\n9\n9.5\n500\n700\n900\n1,100\n1,300\n1,500\n1,700\n1,900\n2,100\n2,300\n2,500\nMar.-22\nJun-22\nSep-22\nDec-22\nMar-23\nPer Cent \n₦ Billion\nConsumer Credit\nShare of private sector credit\n78.1\n73.5\n76.9\n75.6\n74.5\n22.0\n26.5\n23.1\n24.4\n25.5\n0\n10\n20\n30\n40\n50\n60\n70\n80\n90\nMar.-22\nJun-22\nSep-22\nDec-22\nMar-23\nPer cent\nPersonal\nRetail\n \n32 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nResultantly, requests at the standing lending facility window declined to \nN4,956.39billion, \nwith \ndaily \naverage \nof \nN78.67billion, \nfrom \nN7,049.52billion, with a daily average of N115.57billion in the preceding \nquarter. Conversely, requests at the standing deposit facility increased to \nN1,924.20billion, with a daily average of N30.07 billion, from \nN669.46billion, with a daily average of N10.97billion in the preceding \nquarter. The lower activity at the SLF window and increased activity at the \nSDF window reflected higher banking system liquidity in the period. \n Figure 22: Transaction at the CBN Standing Facility Window (N Billion) \n Source: Central Bank of Nigeria \n \nActivities increased in both the NTBs and FGN bond segments due to higher \nyields and inflation expectations. At the auctions, NTBs worth \n₦1,289.87billion, ₦4,893.00billion, and ₦1,589.87billion were offered, \nsubscribed and allotted, respectively, relative to ₦972.99billion, \n₦2,655.07billion, and ₦852.93billion in the preceding quarter. A \nbreakdown showed that longer-term securities (364-day) accounted for \nN4,528.66billion (92.6 per cent) of the total subscription, revealing \ninvestors’ preference for longer-tenorred instruments because of higher \nyields and inflation expectations. \n \n \n \n \n \n \nPrimary \nMarket\n902.2\n7,049.5\n4,956.4\n1,365.9\n669.5\n1,924.2\n0\n1,000\n2,000\n3,000\n4,000\n5,000\n6,000\n7,000\n8,000\nMar.-22\nDec-22\nMar-23\nSLF\nSDF\n \n33 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n \n Figure 23: Primary Market NTBs (N Billion) \n \n Source: Central Bank of Nigeria \n \nSimilarly, the total amount of FGN bonds offered, subscribed, and allotted \nat N1,080.00billion, N2,605.88billion and N1,996.53billion was higher, \ncompared with N400.00billion, N650.47billion and N516.80billion, \nrespectively, in the preceding quarter. The bid and marginal rates stood at \n14.3 (±3.3) and 15.0 (±1.0) per cent, compared with 16.3 (±2.8) and 15.4 \n(±0.9) per cent, respectively, in the preceding quarter. \n \n Figure 24: Primary Auctions of FGN Bond (N Billion) \n \n Source: Central Bank of Nigeria \n \n \n7\n1,007\n2,007\n3,007\n4,007\n5,007\n6,007\n500\n700\n900\n1,100\n1,300\n1,500\n1,700\nMar.-22\nDec-22\nMar-23\nOffered (LHS)\nAllotment (LHS)\nSubscription (RHS)\n450.0\n400.0\n1,080.0\n1,481.4\n650.5\n2,605.9\n764.4\n516.8\n1,996.5\n0\n500\n1000\n1500\n2000\n2500\n3000\nMar.-22\nDec-22\nMar-23\nOffered\nSubscription\nAllotment\n \n34 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nOn the whole, key money market rates were consistent with the liquidity \ntrajectory in the banking system. The average Interbank call and Open Buy \nBack (OBB) rates stood at 12.1 and 12.2 per cent, compared with 11.7 and \n13.3 per cent, respectively, in the preceding quarter. Similarly, the Nigeria \nInterbank Offered Rate (NIBOR 30-day and 90-day) stood at 12.5 and 13.3 \nper cent, relative to 12.5 and 13.7 per cent, respectively, in the preceding \nquarter. \nFigure 25: Developments in Short-term Interest Rates \n Source: Central Bank of Nigeria. \n \nThe average prime lending rate increased slightly by 0.4 percentage point \nto 13.8 per cent from 13.4 per cent in the preceding quarter, while the \naverage maximum lending rate shed 0.4 percentage point to 28.1 per cent \nfrom 28.5 per cent in the preceding quarter. The weighted average term \ndeposit (WAVTD) rate fell to 5.5 per cent from 7.2 per cent in the \npreceding quarter. Consequently, the average spread between the \nweighted average term deposit and maximum lending rates declined to \n21.03 percentage points from 21.33 percentage points in the preceding \nquarter. \n \n \n \n \n \n \n \nInterest \nRate \n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n20\nPer cent (%)\nInterbank call\nOBB\nNIBOR-30\nNIBOR-90\nMPR\n \n35 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n Figure 26: Trend in Average Term Deposit and Lending Rates \n \n Source: Central Bank of Nigeria. \n Note: PLR= Prime lending rate; MLR= Maximum lending rate; \n WAVTD= Weighted Average term deposit rate; SPRD= Spread. \n \n2.3.4 Capital Market Developments \nActivities on the Nigerian Exchange (NGX) Limited were bullish, following \nstrong buying interest in the equities market, occasioned by positive 2022 \nfull year corporate dividend/earnings declaration. Aggregate market \ncapitalisation increased by 4.2 per cent to N53,326.29billion from \nN51,188.87billion in the preceding quarter. A disaggregation showed that \nthe equities, debts, and Exchange Traded Funds (ETF) gained 5.7, 2.4, and \n7.8 per cent to close at N27,965.74billion, N23,214.72billion and \nN8.42billion, respectively. The development was driven by increased \ntrading activities in the capital market, following the release of favourable \n2022 year-end corporate earnings. The equities, debt, and ETF \ncomponents constituted 55.4, 44.5, and 0.1 per cent, respectively, of the \naggregate market capitalisation. \n \nThe All-Share Index (ASI) rose by 5.8 per cent to 54,232.34 points, relative \nto the 51,251.06 points at the end of the preceding quarter. The \nperformance of the NGX-ASI was driven by strong buying interest, \nfollowing the release of better-than-expected 2022 full year \ndividend/earnings. \n \n \n \n \n \n \n \n \nMar.-22\nJun-22\nSep-22\nDec-22\nMar-23\nPRL (LHS)\n11.77\n12.03\n12.19\n13.25\n13.75\nMXLR (LHS)\n28.33\n27.59\n27.99\n28.53\n28.15\nWAVTD (LHS)\n3.37\n3.44\n5.21\n7.21\n5.49\nSPRD (RHS)\n24.96\n24.15\n22.78\n21.33\n21.03\n19\n20\n21\n22\n23\n24\n25\n26\n0\n5\n10\n15\n20\n25\n30\nPercentage points\nPer cent (%)\nMarket \nCapitalisation \nNGX All-Share \nIndex \n \n36 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n Figure 27: Aggregate Market Capitalisation and All-Share Index \n \n Source: Nigeria Exchange (NGX) Limited \n \nThe performance of all the major indices were bullish, except the NGX-\nSovereign bond, which trended downward and the NGX-ASeM which \nremained flat, reflecting the strong performance of the capital market \nduring the review quarter. \n \n Table 11: Nigeria Exchange (NGX) Limited sectorial Indices \nNGX Indices \n2022Q4 \n2023Q1 \nChanges \n(%) \nNGX-Growth \n1,798.3 \n2,799.2 \n55.6 \nNGX-Consumer Goods \n588.9 \n702.7 \n19.3 \nNGX-Premium \n4,715.6 \n5,280.2 \n12.0 \nNGX-Oil/Gas \n462.5 \n510.8 \n10.5 \nNGX- AFR Bank Value \n991.1 \n1,081.5 \n9.1 \nNGX- Lotus II \n3,240.8 \n3,525.8 \n8.8 \nNGX-Banking \n417.5 \n453.0 \n8.5 \nNGX- AFR Div Yield \n3,321.5 \n3,591.6 \n8.1 \nNGX- MERI Value \n2,308.2 \n2,484.3 \n7.6 \nNGX-CG \n1,276.5 \n1,363.7 \n6.8 \nNGX-Pension \n1,792.6 \n1,906.5 \n6.4 \nNGX-30 \n1,842.5 \n1,933.3 \n4.9 \nNGX-Main Board \n2,328.5 \n2,440.5 \n4.8 \nNGX-MERI Growth \n2,297.3 \n2,351.8 \n2.4 \nNGX-Industrial Goods \n2,403.2 \n2,456.5 \n2.2 \nNGX-Insurance \n174.4 \n177.5 \n1.8 \nNGX-ASeM \n659.4 \n659.4 \n0.0 \nNGX-Sovereign Bond \n818.3 \n802.1 \n-2.0 \n Source: Nigeria Exchange (NGX) Limited. \n \n42,000\n44,000\n46,000\n48,000\n50,000\n52,000\n54,000\n56,000\n42,000\n44,000\n46,000\n48,000\n50,000\n52,000\n54,000\nQ1-22\nQ2-22\nQ3-22\nQ4-22\nQ1-23\nIndex Points\nN Billion\nAggregate Market Capitalisation (LHS)\nAll-Share Index (RHS)\n \n37 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nThe value and volume of traded securities on the NGX increased by 45.0 \nand 48.9 per cent to N260.02billion and 18.04billion, respectively, relative \nto N179.43billion and 12.22billion in the preceding quarter. However, the \ntotal deals traded declined by 7.5 per cent to 230,629 deals, compared \nwith 246,966 deals in the preceding quarter. \n \n Figure 28: Volume and Value of Traded Securities on the NGX \n Source: Nigeria Exchange (NGX) Limited. \n \n There were 25 new and two supplementary listings on the Exchange, \ncompared with six new listings in the preceding quarter. The increase in \nlistings evidenced investors’ positive sentiments towards the capital \nmarket. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0\n100\n200\n300\n400\n500\n600\n0\n10\n20\n30\n40\n50\n60\nQ1-22\nQ2-22\nQ3-22\nQ4-22\nQ1-23\nN Billion \nBillion\nVolume of Traded Securities (LHS)\nValue of Traded Securities (RHS)\n \n38 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n Table 12: Listings on the Nigerian Exchange Limited in 2023Q1 \nCompany/Security \nShares Units/Price \nRemarks \nListing \nFamily Homes Sukuk Issuance \nProgram Plc: \n20,000,000 units at 100% of \npar (N 1,000) \nN 20,000,000,000 14.00% \nSeries II Ijara Lease Sukuk \ndue 2029 \nNew \n14.00% FHSUK SEP 2029 \nELLAH LAKES PLC \nOne Billion (1,000,000,000) \nordinary shares of 50 kobo \neach at N2.90 per share \nRights issue \nNew \nTaj Sukuk Issuance \nProgramme SPV Plc \n11,359,989 at N 1000 per \nunit \n15% Series I Mudarabah \nSukuk Issuance \nNew \n9.075% FGNSB JUL2025 \n915,865, \nSavings Bond \nNew \n8.075% FGNSB JUL 2024 \n451,037 \nSavings Bond \nNew \n8.205% FGNSB JUNE 2024 \n769,920 units \nSaving Bond \nNew \n9.205% FGNSB JUNE 2025 \n1,104,748 units \nSaving Bond \nNew \n9.413% FGNSB AUG 2024 \n528,996 \nSaving Bond \nNew \n10.413% FGNSB AUG 2025 \n933,599 \nSaving Bond \nNew \n11.041% FGNSB SEP2024 \n530,728 \nSaving Bond \nNew \n12.041% FGNSB SEP 2025 \n1,596,794 \nSaving Bond \nNew \n11.382% FGNSB OCT 2024 \n282,093 \nSaving Bond \nNew \n12.382% FGNSB OCT 2024 \n945,618 \nSaving Bond \nNew \n12.255% FGNSB DEC 2024 \n297,811 \nSaving Bond \nNew \n13.255% FGNSB DEC 2025 \n908,647 \nSaving Bond \nNew \n9.600% FGNSB JAN 2025 \n145,416 \nSaving Bond \nNew \n10.600% FGNSB JAN 2026 \n387,614 \nSaving Bond \nNew \n7.934% FGNSB MAY 2024 \n358,011 \nSaving Bond \nNew \n10.043% FGNSB FEB 2025 \n322,301units \nSaving Bond \nNew \n11.043% FGNSB FEB 2026 \n948,849 units \nSaving Bond \nNew \n8.934% FGNSB MAY 2025 \n748,449 \nSaving Bond \nNew \nLagos State Government. \n13.00% LAB DEC 2031 \n137,328,000 units at 100% of \npar (N 1,000) \nUnsecured Bond \nNew \nNEIMETH INTERNATIONAL \nPHARMACEUTICALS PLC \n2,373,947,500 Ordinary \nShares of 50 Kobo Each at N \nN 1.55 Per Share \nRights issue \nSupple\nmentar\ny \nFTN COCOA PROCESSORS PLC \n1,700,000,000 Ordinary \nShares of 50 Kobo Each at 50 \nKobo per Share \nDebt Conversion program \nSupple\nmentar\ny \nROYAL EXCHANGE PLC \n4,116,296,059 units of \nordinary shares of 50 kobo \neach at 50 kobo per share \nRights Issue \nNew \nNGX30 Index \nFutures Contract N2,069.25 \nDerivative \nNew \nNGX30 Index \nFutures Contract \nNGXPENSIONU3, N 2,007.75 \nDerivative \nNew \nNotes: FGNSB=Federal Government of Nigeria Saving Bond; Plc=Public Limited Liability Company; and \n NOV=November. \nSource: Nigeria Exchange Limited (NGX). \n \n \n39 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n2.3.5 Financial Soundness Indicators \nThe banking industry was resilient, as key financial soundness indicators \nremained within the industry regulatory thresholds. The industry Capital \nAdequacy Ratio (CAR) rose marginally by 0.4 percentage point to 14.2 per \ncent, relative to the 13.8 per cent in the preceding quarter. The ratio \nremained above the 10.0 per cent benchmark for banks with \nnational/regional authorisation. \n \nThe banks’ asset quality, measured by the ratio of non-performing loans \n(NPLs) was below the prudential benchmark of 5.0 per cent, despite rising \nmarginally by 0.3 percentage point to 4.5 per cent from the level in the \npreceding quarter. The industry liquidity ratio (LR) at 51.4 per cent, was \nabove the minimum regulatory benchmark of 30.0 per cent, showing the \nability of banks to meet their short-term financial obligations. The LR \ndecreased by 1.6 percentage points, compared with the preceding \nquarter, reflecting banks’ appetite for long-term assets. \n \n Table 13: Financial Soundness Indicators (Per cent) \nKey Indicators \n2022Q4 \n2023Q1 \nPrudential \nBenchmark \nCapital Adequacy Ratio \n13.8 \n14.2 \n10.0 \nNon-Performing Loans Ratio \n4.2 \n4.5 \n5.0 \nLiquidity Ratio \n53.0 \n51.4 \n30.0 \n Source: Central Bank of Nigeria \n \n \n \n \n \n \n \n \n \n \n \n \n40 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n2.4 \nEXTERNAL SECTOR DEVELOPMENTS \nNigeria’s current account posted a surplus of US$2.49billion, buoyed by \npositive trade performance, particularly crude oil export, lower payments \nfor services and sustained surplus in the secondary income account. The \nfinancial account showed a net reduction in financial liabilities of \nUS$0.52billion, reflecting uncertainties surrounding the country’s general \nelections. The international reserves at US$35.14billion was equivalent to \n6.7 months of import for goods and services or 9.1 months for goods only. \nThe average exchange rate of the naira per US dollar at the I&E window \nwas ₦460.93/US$, compared with ₦445.71US$ in 2022Q4. The \ninternational investment position recorded a net financial liability of \nUS$76.62billion. Public sector external debt stock and external debt service \npayment at the end of December 2022 stood at US$41.69billion and \nUS$0.80billion, respectively. \n2.4.1 Current and Capital Account \nImproved crude oil export earnings, lower deficit in the services account, \nand increased surplus in the secondary income account resulted in a higher \ncurrent account surplus in 2023Q1. The surplus in the current account \nincreased to US$2.49billion (2.2 per cent of GDP) from US$2.35billion (1.8 \nper cent of GDP) in 2022Q4, due to favourable trade balance, lower \ndemand for services and increased surplus in the secondary income \naccount. \nFigure 29: Current Account Balance \n \n Source: Central Bank of Nigeria \n \n \n \n \n \n-1.69\n2.43\n-2.06\n2.35\n2.49\n-3\n-2\n-1\n0\n1\n2\n3\nQ1 2022\nQ2 2022\nQ3 2022\nQ4 2022\nQ1 2023\nUS$ Billion\nSummary \n \n41 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nAggregate merchandise export earnings decreased marginally, as \nproceeds from non-oil export declined, attributed to lower commodity \nprices. Aggregate export earnings declined by 1.4 per cent to \nUS$14.38billion, from US$14.59billion in 2022Q4. This indicated lower \nearnings from non-oil export, attributed majorly to a downward trend in \ncommodity prices in the international market. \n \nA breakdown shows that crude oil and gas export receipts increased \nslightly by 0.2 per cent to US$12.66billion, from US$12.63billion in \n2022Q4. The development was mainly attributed to the improvement in \ncrude oil production to an average of 1.28 barrels per day (mbpd) in \n2023Q1, from 1.15 million mbpd in 2022Q4, reflecting the positive \noutcome of the enhanced government pipeline surveillance. Conversely, \nnon-oil export receipts declined by 11.8 per cent to US$1.72billion, from \nUS$1.95billion in the preceding quarter, on account of lower commodity \nprices at the global market. Crude oil and gas export constituted 88.0 per \ncent of total export, while non-oil export accounted for the remaining 12.0 \nper cent. \n \nMerchandise import fell marginally, following lower demand for non-oil \nproducts. Import declined by 0.7 per cent to US$11.70billion, from \nUS$11.79billion in 2022Q4, due to the 4.7 per cent decline in non-oil \nimport, which fell to US$7.48billion, from US$7.85billion in 2022Q4, on \naccount of high global inflation. However, import of petroleum products \ngrew by 7.3 per cent to US$4.22billion, from US$3.93billion in the \npreceding quarter of 2022. The share of non-oil import remained \ndominant, accounting for 63.9 per cent of the total, while petroleum \nproducts constituted the balance of 36.1 per cent. \nA breakdown of import by sector revealed that raw materials and \nmachinery accounted for the largest share of 51.1 per cent, reflecting an \ninclination towards support to the industrial sector. Other sectoral import \nshares were manufactured products, 15.1 per cent; food products, 13.7 \nper cent; petroleum products, 9.4 per cent; minerals, 5.6 per cent; \ntransport, 3.6 per cent; and agricultural products, 1.6 per cent. \n \nThe deficit in the services account narrowed, owing to lower payments for \nservices, particularly transportation and travels. The deficit narrowed by \n3.9 per cent to US$3.01billion from US$3.13billion in 2022Q4. The \nreduction in deficit was due, largely, to the decrease in freight charges, \nand lower payments in respect of education and health-related travels. \nAnalysis of trade in services showed that payment for services fell to \nMerchandise \nImport \nServices \nExport \nPerformance \n \n42 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nUS$4.08billion, from US$4.42billion in the preceding quarter. Payments \nfor transportation, travel, telecommunications and other business \nservices declined by 14.6, 12.7, 6.6, and 3.5 per cent, respectively, to \nUS$1.95billion, US$0.99billion, US$0.13billion and US$0.59billion. \nPayments for financial, insurance and pensions declined by 69.4 and 4.0 \nper cent to US$0.05billion and US$0.14billion, respectively. However, \npayments for government services increased by 3.9 per cent to \nUS$0.08billion. In terms of share, transportation accounted for the \nlargest, while financial accounted for the least. \n \n Figure 30: Share of Service Out-Payments (percentage) \n \n Source: Central Bank of Nigeria. \n \nReceipts from services declined by 17.3 per cent to US$1.07billion, from \nUS$1.30billion in the preceding quarter. This was due, mainly, to decline \nin receipts from financial, travel, telecommunications and transportation \nservices by 40.1, 19.7, 15.5 and 8.6 per cent, respectively. In terms of \nshare, receipt from transportation was the largest. \nTransportation\n47.7%\nTravels\n24.2%\nInsurance\n3.4%\nCommunications\n, 3.3%\nGovernment \n2.0%\nOther business\n14.5%\nFinancial\n1.2%\nOthers\n3.7%\n \n43 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nFigure 31: Share of Services Receipts (Percentage) \nSource: Central Bank of Nigeria. \n \nHigher dividend payments to non-resident investors widened the deficit in \nthe primary income account. The deficit in the primary income account \nwidened by 18.7 per cent to US$2.69billion in 2023Q1, due, primarily to \nthe 34.9 per cent increase in investment income payments, which \namounted to US$3.09billion, from US$2.77billion in 2022Q4. Income on \ndirect investment in the form of dividends rose by 12.1 per cent to \nUS$2.71billion, relative to US$2.42billion in 2022Q4. Similarly, interest \npayments on portfolio investments rose to US$0.09 billion, from \nUS$0.05billion in 2022Q4. Interest earnings on reserve assets increased \nby 35.7 per cent to US$0.20billion, from US$0.15billion in 2022Q4. \nConversely, interest payments on loans declined by 0.7 per cent to \nUS$0.30billion. \nThe compensation of employees’ account maintained a surplus position, \nincreasing by 6.2 per cent to US$0.06billion, relative to the level in \n2022Q4. \n Figure 32: Primary Income Balance (US$ Billion) \n Source: Central Bank of Nigeria. \n \nPrimary \nTransportation\n44.4%\nTravels\n20.8%\nFinancial\n14.4%\nCommunications\n11.0%\nGovernment \n5.3%\nOthers\n4.1%\n-4.24\n-2.94\n-3.43\n-2.26\n-2.69\nQ 1 2 0 2 2\nQ 2 2 0 2 2\nQ 3 2 0 2 2\nQ 4 2 0 2 2\nQ 1 2 0 2 3\nUS$ BILLION\n \n44 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nThe surplus in the secondary income account improved, due to a higher \ninflow of general government transfers. The surplus in the secondary \nincome account increased by 11.4 per cent to US$5.51billion, from \nUS$4.95billion in 2022Q4. The development was due to increased inflow \nof general government transfers by 47.3 per cent to US$0.73 billion, from \nUS$0.49billion in 2022Q4. Personal transfers, including diaspora \nremittances decreased by 2.0 per cent to US$4.85billion, from \nUS$4.95billion in the preceding quarter. \n \n Figure 33: Secondary Income Balance and Remittances Inflow \n Source: Central Bank of Nigeria. \n \n2.4.2 Financial Account \nNon-residents’ redemption of matured investments and the withdrawal of \nforeign currency and deposits resulted in a net reduction in financial \nliabilities. The financial account recorded a net reduction in financial \nliabilities of US$0.52billion (0.5 percent of GDP), compared with \nUS$0.85billion (0.7 percent of GDP) in 2022Q4. This reflected tight global \nfinancial conditions and uncertainties surrounding the macroeconomy as \na result of the country’s general elections. \nNon-residents’ claims on the economy reduced significantly as investors \nredeemed matured investments. A capital reversal of US$0.78billion was \nrecorded in 2023Q1, in contrast to an inflow of US$1.94billion in 2022Q4. \nThe development was due to reversals of portfolio investments and \nwithdrawal of foreign currency and deposits from domestic money banks. \nAlso, the uncertainties surrounding the 2023 general elections and the \nquest for a safer haven by investors contributed to the divestment. A \nportfolio investment reversal of US$1.17billion was recorded, in contrast \nto an inflow of US$0.34billion in 2022Q4, occasioned by the redemption \nof investments in short-term debt securities by non-resident investors. \nSecondary Income \nNet Incurrence \nof Liability \nFinancial Account \nDevelopments \n5.88\n5.56\n5.46\n4.95\n5.51\n5.16\n4.95\n4.8\n4.95\n4.85\n0\n2\n4\n6\n8\n10\n12\nQ1 2022\nQ2 2022\nQ3 2022\nQ4 2022\nQ1 2023\nUS$ Billion\nSecondary Income Balance\nDiaspora Remittances\n \n45 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nSimilarly, ‘other investment’ recorded a reversal of US$0.86billion, as \nagainst an inflow of US$0.85billion in 2022Q4, due to withdrawal of \nforeign currency and deposits in Nigerian banks by non-residents. \nHowever, FDI inflow improved significantly to US$1.20billion, from \nUS$0.75billion in 2022Q4, owing to inflow of fresh equity, particularly to \nthe telecommunications sector. \nAggregate financial assets recorded a disposal of US$1.30billion, in \ncontrast to an acquisition of US$1.09billion in 2022Q4. The development \nreflected a higher depletion in reserve assets and the withdrawal of \nforeign currency deposits by banks and the general government. Other \ninvestment assets recorded a significantly lower net acquisition of \nUS$0.24billion, compared with US$1.70billion in 2022Q4. Following the \nBank's effort to enhance liquidity in the foreign exchange market and \nmeet balance of payments needs, reserve assets were depleted by \nUS$1.62billion, relative to US$1.11billion in 2022Q4. Acquisition of FDI \nasset was low at US$0.02billion, compared with US$0.27billion in the \npreceding period. \n2.4.3 External Debt \nNigeria’s public sector external debt stock and external debt service \npayment at the end of December 2022 stood at US$41.69billion (32.1 per \ncent of GDP) and US$0.80billion, respectively. A breakdown showed that \nthe multilateral loans, from the World Bank, International Monetary Fund, \nand African Development Bank Groups, amounted to US$20.2billion, \naccounting for 48.5 per cent of the total. A total of US$15.62billion or 37.5 \nper cent of the total was borrowed from commercial sources in the form \nof Euro and Diaspora Bonds. Loans from bilateral sources was \nUS$5.07billion, or 12.2 per cent of the total, while promissory notes were \nUS$0.55billion, or 1.3 per cent of the total debt stock. \n \nThe external debt service payment stood at US$0.31billion at end-\nDecember 2022, relative to US$0.80billion in the preceding quarter. A \nbreakdown showed that the principal repayment was US$0.09billion, \naccounting for 29.7 per cent of the entire payment. Interest payments \ntotalled US$0.19billion, or 62.4 per cent of the total, while other payments \nmade up the balance. An analysis of interest payments showed that \ninterest payments on commercial borrowings accounted for 77.3 per cent \nof the total at US$0.15billion, while multilateral institutions accounted for \n16.4 per cent of the total or US$0.03billion. Interest payments on bilateral \nloans accounted for the balance. \n \n \nPublic Sector \nExternal Debt \nNet Acquisition \nof Asset \n \n46 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n2.4.4 International Investment Position (IIP) \nNigeria's International Investment Position recorded a lower net financial \nliability of US$76.62billion. The stock of financial assets decreased slightly \nto US$108.16billion at end-March 2023, compared with US$109.14billion, \ndue, largely to the 4.0 per cent decrease in reserve assets. The stock of \nportfolio investment assets remained unchanged at US$3.57billion, \nrelative to the preceding quarter, while that of direct investment assets \ndecreased slightly by 0.1 per cent to US$13.65billion, from its level at end-\nDecember 2022, due to lower equity investment by residents. Other \ninvestment assets increased marginally by 0.6 per cent to US$52.45billion \nfrom US$52.13billion in 2022Q4. \n \nThe stock of financial liabilities decreased by 1.2 per cent to US$184.78 \nbillion, compared with US$186.99billion at end-December 2022, due, \nlargely to the decrease in the stock of other investment and portfolio \ninvestment liabilities. The stock of other investment and portfolio \ninvestment liabilities decreased by 4.0 and 3.4 per cent to US$56.75billion \nand US$34.95billion, from US$59.12billion and US$36.17billion, \nrespectively. However, the stock of direct investment liabilities increased \nby 1.4 per cent to US$89.72billion, from the level at end-December 2022. \n \n2.4.5 External Reserves \nThe external reserves remained above the standard benchmark of 3.0 \nmonths of import cover. The international reserves stood at \nUS$35.14billion, relative to US$36.61billion at end-December 2022. The \nlevel of external reserves could cover 6.68 months of import for goods and \nservices or 9.01 months of import for goods only. \nFigure 34: External Reserves and Months of Import Cover \n \nSource: Central Bank of Nigeria \n \n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n 32.00\n 34.00\n 36.00\n 38.00\n 40.00\n 42.00\nDec-21\nJan-22\nFeb-22\nMar-22\nApr-22\nMay-22\nJun-22\nJul-22\nAug-22\nSep-22\nOct-22\nNov-22\nDec-22\nJan-23\nFeb-23\nMar-23\nUS$ Billion\nExternal Reserves - LHS\nMonths of Import (Goods only)\nMonths of Import (Goods and Services)\nInternational \nInvestment \nPosition \n \n47 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nA breakdown of the external reserves showed that the share of CBN was \nUS$34.20billion; Federal Government, US$0.94billion; while the \nFederation accounted for the balance of US$0.007billion. In terms of \ncurrency composition, the US dollar was US$26.19 billion, (74.5 per cent); \nSpecial Drawing Rights US$5.08billion (14.4 per cent); Chinese Yuan \nUS$3.48billion (9.9 per cent); British Pounds US$0.20billion (0.6 per cent); \nEuro US$0.19billion (0.6 per cent); while other currencies accounted for \nthe balance. \n2.4.6 Foreign Exchange Flows through the Economy \nThe economy recorded a higher net foreign exchange inflow of \nUS$7.20billion. Foreign exchange inflow into the economy increased by \n17.5 per cent to US$17.18billion from US$14.62billion in the 2022Q4. \nForeign exchange inflow through the Bank increased to US$7.17billion, \nfrom US$6.21billion in the preceding quarter. Foreign exchange inflow \nthrough autonomous sources increased to US$10.08billion from \nUS$8.41billion in the preceding period. \nForeign exchange outflow through the economy increased by 12.8 per \ncent to US$9.98billion, relative to US$8.85billion in the 2022Q4. Outflow \nthrough the Bank increased by 17.9 per cent to US$8.86billion from \nUS$7.51billion in the preceding quarter. However, autonomous outflow \nfell by 16.2 per cent to US$1.12 billion from US$1.34billion in the \npreceding quarter. \nConsequently, net foreign exchange inflow through the economy \nincreased by 24.7 per cent to US$7.20billion from US$5.78billion in the \npreceding quarter. Similarly, net inflow through autonomous sources rose \nto US$8.89 billion from US$7.08 billion in the preceding quarter. However, \na net outflow of US$1.69billion was recorded through the Bank, compared \nto a net outflow of US$1.30billion in the preceding quarter. \nFigure 35: Foreign Exchange Transactions through the Economy \n \n Source: Central Bank of Nigeria \nQ1 2022\nQ4 2022\nQ1 2023\nInflow\n17.62\n14.62\n17.18\nOutflow\n10.98\n8.85\n9.98\nNetflow\n6.64\n5.78\n7.20\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\n20\nUS$ Billion\nInflow\nOutflow\nNetflow\nForeign Exchange \nFlows through the \nEconomy \n \n48 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nThe average turnover at the I & E window of the foreign exchange market \ndecreased by 12.7 per cent to US$0.10billion, relative to US$0.12billion in \n2022Q4. \nThe average exchange rate of the naira per US dollar at the I & E window \nwas ₦460.93/US$, compared with ₦445.71US$ in 2022Q4. \n Figure 36: Turnover in the I&E Foreign Exchange Window \n \n Source: Central Bank of Nigeria. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n104.09\n-46.81\n81.58 \n42.26 \n14.86 \n(35.81)\n16.38 \n(25.04)\n11.69 \n(12.66)\n-60\n-40\n-20\n0\n20\n40\n60\n80\n100\n120\n0\n20\n40\n60\n80\n100\n120\n140\n160\n180\n200\nQ 4 \n2 0 2 0\nQ 1 \n2 0 2 1\nQ 2 \n2 0 2 1\nQ 3 \n2 0 2 1\nQ 4 \n2 0 2 1\nQ 1 \n2 0 2 2\nQ 2 \n2 0 2 2\nQ 3 \n2 0 2 2\nQ 4 \n2 0 2 2\nQ 1 \n2 0 2 3\nPer cent\nUS $ (M) \n Average Turnover(LHS)\nRate of Turnover(RHS)\nAverage Exchange \nRate\n \n49 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \n3.0 ECONOMIC OUTLOOK \n3.1 Global Outlook \nThe outlook for global economic growth in 2023 remains pessimistic on \naccount of tight financial conditions, geo-political tensions and \nfragmentation, and macroeconomic uncertainties that continued to trail \nthe Russia-Ukraine War. The outlook is crowded by high debt levels \nconstraining critical investments and other fiscal operations in several \nEmerging Market and Developing Economies (EMDEs). Accordingly, the \nIMF projects a softening of global growth to 2.8 per cent in 2023, from an \nestimated 3.4 per cent in 2022. In the Advanced Economies (AEs), growth \nis projected to slow to 1.3 per cent in 2023 from 2.7 per cent in 2022, \nreflecting the effects of the aggressive rate hikes, and supply-chain \ndisruptions resulting from the economic sanctions imposed on Russia. \nMeanwhile, growth prospect in EMDEs is projected to be more robust at \n3.9 per cent in 2023, despite external headwinds. The outlook is \npredicated on expectation of more resilient domestic demand in India and \nsome parts of Latin America, as well as the reopening of China. However, \nthe growth projection is 0.1 percentage point lower than the estimated \nperformance in 2022. \nGlobal inflation, although elevated, is expected to moderate to 7.0 per cent \nin 2023 from 8.7 per cent in 2022. The downward projection, partly, \nreflects lower global food and commodity prices, including fuel and the \ncooling effects of monetary policy tightening across several central banks. \nNonetheless, the gains to price moderation could be truncated and \ninflation turning out more persistent than anticipated if the Russia- \nUkraine war intensifies, resulting in another rounds of spike in food and \nenergy prices. \n3.2 Domestic Outlook \nNigeria’s economic growth outlook remains positive in the near term \nsubject to some downside risks. The positive outlook is predicated on \ncontinued recovery of crude oil prices, ramp up in crude production, \nrebound in manufacturing activities and sustained policy support. \nFurthermore, expected discontinuation of the costly subsidy scheme on \nPMS by end of June 2023, in line with the Petroleum Industry Act (PIA), is \nexpected to free up more resources for investment in growth-enhancing \nsector. However, contraction in global demand, persistent security \nchallenges, lingering crude oil production bottlenecks as well as \ninfrastructural deficit are major headwinds to domestic growth prospects. \n \n50 | P a g e Central Bank of Nigeria Economic Report First Quarter 2023 \nECONOMIC REPORT, FIRST QUARTER 2023 \n \nInflationary pressures are expected to moderate in the next quarter, due \nto relative stability in the exchange rate, tight monetary conditions, and \nimprovement in global supply chain. This outlook is anchored on the \nBank’s aggressive monetary tightening and the crystallisation of various \nsupply-side interventions by the Bank and the FGN in growth-enhancing \nsectors of the economy. However, a total discontinuation of the subsidy \nscheme on PMS by middle of the year and external headwinds, could have \nsystem-wide effect and add pressure on headline inflation. \nBarring any unanticipated spending shocks, a positive fiscal outlook is \nenvisaged in the near-term, with expected uptick in crude oil prices, \nimprovement in domestic crude oil production, expansion in economic \nactivity and zero PMS under-recovery payments. The economic climate is \nexpected to adjust southwards, as businesses shift into the new climate \nand the softening of the naira redesign policy measures propel aggregate \ndemand. The ensuing quarter coincides with the mid-year filing of tax \nreturns by companies in Nigeria, raising hopes of higher government \nreceipts. In the absence of any unforeseen spending shocks, fiscal \nconditions are expected to improve in the near term. \n \nThere is positive prospect for Nigeria’s external reserves on the back of \nfavourable crude prices and expected cessation of PMS subsidy payments \nby end 2023Q2. However, lower than expected crude oil-related earnings \non account of production bottlenecks and increased cost of external debt \nservicing could weigh down reserves’ accretion.", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Quarterly_Economic_Reports/FIRST QUARTER 2023 ECONOMIC REPORT.pdf"}
\ No newline at end of file