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+{"doc_id": "38cf7bc7aa1cc71a5d07e1ec3f227e43", "text": "This document is for CBN internal consumption \n \n \n \n \n \n \n \n \n \nCENTRAL BANK OF NIGERIA \nECONOMIC REPORT \n \n \n \n \n \n \n \nThird Quarter \n2022 \n \n \ni \n \nThis document is for CBN internal consumption \nABOUT THE REPORT \nThe Central Bank of Nigeria (CBN) Economic Report is a compilation and \nanalysis of economic developments in Nigeria within the review period. The \nReport, which is published monthly and quarterly, provides insights into the \ncurrent developments in the real, fiscal, financial, and external sectors of \nthe Nigerian economy as well as global economic developments. It also \nreflects on the policy initiatives of the Bank within the period. \n \nThe Report is targeted at a wide range of readers, including economists, \npolicymakers, financial analysts in the government and private sectors, and \nthe public. Free copies of the Report, both current and past issues, can be \nobtained from the CBN website: www.cbn.gov.ng. All inquiries concerning \nthe report should be directed to the Director, Research Department, Central \nBank 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 \nThis document is for CBN internal consumption \nContents \nABOUT THE REPORT .............................................................................................. i \nEXECUTIVE SUMMARY .......................................................................................... 1 \n1.0 GLOBAL ECONOMIC DEVELOPMENTS ..................................................... 3 \n1.1 \nGlobal Economic Activities ...................................................................... 3 \n1.2 \nGlobal Inflation ........................................................................................ 5 \n1.3 \nGlobal Financial Markets ......................................................................... 6 \n1.4 \nCentral Banks’ Policy Rates ...................................................................... 8 \n1.5 \nGlobal Commodity Market .................................................................... 11 \n2.0 \nDOMESTIC ECONOMIC DEVELOPMENTS ............................................... 15 \n2.1 \nREAL SECTOR DEVELOPMENTS .............................................................. 15 \n2.1.1 \nEconomic and Business Activities ............... Error! Bookmark not defined. \n2.1.2 \nDomestic Price Developments............... Error! Bookmark not defined. \n2.1.3 \nEnergy Sector ......................................................................................... 18 \n2.1.4 \nSocio-Economic Developments ............................................................. 20 \n2.1.5 \nDomestic Crude Oil Market Developments............................................ 21 \n 2.2 \nFISCAL SECTOR DEVELOPMENTS ........................................................... 22 \n2.2.1 \nFederation Account Operations ............................................................. 22 \n2.2.2 \nFiscal Operations of the Federal Government ....................................... 24 \n2.3 \nMONETARY AND FINANCIAL SECTOR .................................................... 28 \n2.3.1 \nMonetary Developments ....................................................................... 28 \n2.3.2 \nCredit Utilisation .................................................................................... 30 \n2.3.3 Money Market Developments ............................................................... 32 \n2.3.4 \nCapital Market Developments ............................................................... 35 \n2.3.5 \nFinancial Soundness Indicators .............................................................. 38 \n2.4 EXTERNAL SECTOR DEVELOPMENTS ..................................................... 39 \n2.4.1. External Balance..................................................................................... 39 \n2.4.2. Current and Capital Accounts Developments ........................................ 39 \n2.4.3. Financial Account ................................................................................... 43 \n2.4.4. External Debt ......................................................................................... 44 \n2.4.5. International Investment Position (IIP)................................................... 45 \n2.4.6. International Reserves ............................................................................ 45 \n2.4.7 Foreign Exchange Flows through the Economy ...................................... 46 \n2.4.8 Transactions in the Foreign Exchange Market ........................................ 47 \n2.4.9 Exchange Rate Movement ...................................................................... 48 \n3.0 MACROECONOMIC OUTLOOK ................................................................ 49 \n3.1 Global Economic Outlook ....................................................................... 49 \n3.2 Domestic Economic Outlook .................................................................. 49 \n \nTables \nTable 1: Global Purchasing Managers' Index (PMI) .................................................. 3 \nTable 2: Central Bank Policy Rates (per cent) ........................................................... 9 \nTable 3: Indices of Average World Prices of Nigeria’s Major Agricultural Export \nCommodities for Third Quarter 2022 (Dollar Based) (Jan. 2010=100) .................. 14 \nTable 4: Federally collected Revenue and Distribution to the Three-Tiers of \nGovernment (N Billion) ............................................................................................. 23 \nTable 5: FGN Retained Revenue (N Billion) ............................................................. 24 \nTable 6: Fiscal Balance (N Billion) ............................................................................ 25 \nTable 7: Components of Reserve Money (N Billion) ................................................ 28 \nTable 8: Money and Credit Growth over preceding December (%) ....................... 29 \n \n \niii \n \nThis document is for CBN internal consumption \nTable 9: Relative Share in Total Sectoral Credit (Per cent) ..................................... 30 \nTable 10: Nigeria Exchange (NGX) Limited Sectorial Indices ................................. 36 \nTable 11: Listings on the Nigerian Exchange Limited in 2022Q3 ........................... 37 \nTable 12: EMDEs Currency Rates to the US dollar .......Error! Bookmark not defined. \n \nFigures \nFigure 1: Selected Advanced Economies’ PMIs ...................................................... 4 \nFigure 2: PMI in Selected EMDEs ........................................................................... 4 \nFigure 3: Inflation Rates in Selected Advanced Economies, Average (Per cent) ..... 5 \nFigure 4: Inflation Rates in Selected EMDEs, Average (per cent) ........................... 6 \nFigure 5: Global Stock Market Equity Indices ........................................................ 7 \nFigure 6: 10-Year Government Bond Yields ........................................................... 8 \nFigure 7: Credit Spreads in Selected Advanced Economies .................................. 10 \nFigure 8: Foreign Exchange Rates to the US Dollar (percentage change) ............ 11 \nFigure 9: Quarterly Crude Oil Prices (US$ per barrel) .......................................... 12 \nFigure 10: Price Changes in Selected Metals (per cent) for 2022Q3 .................... 13 \nFigure 11: Real GDP Growth Rate, 2020Q3-2022Q3, Year-on-Year .................... 15 \nFigure 12: Sectoral Growth Rate of Real GDP, 2020Q3-2022Q3 ......................... 16 \nFigure 13: Top 16 Subsectors ............................................................................. 17 \nFigure 14: Subsectors with Least Contribution to GDP ........................................ 17 \nFigure 15: Headline, Food and Core Inflation (Year-on-Year) .............................. 18 \nFigure 16: COVID-19 Statistics ............................................................................ 20 \nFigure 17: Federal Government Expenditure (N Billion) ...................................... 25 \nFigure 18: FGN External and Domestic Debt Composition (N Billion) .................. 26 \nFigure 19: Composition of Domestic Debt Stock by Instrument........................... 27 \nFigure 20: Composition of External Debt Stock by Instrument ............................ 27 \nFigure 21: Consumer Credit Outstanding ............................................................ 31 \nFigure 22: Composition of Consumer Credit ........................................................ 31 \nFigure 23: Open Market Operation (N Billion) ..................................................... 32 \nFigure 24: Primary Market NTBs, 2022Q3 (N Billion) .......................................... 33 \nFigure 25: Developments in Short-term Interest Rates ........................................ 34 \nFigure 26: Trend in Average Deposit and Lending Rates ..................................... 34 \nFigure 27: Aggregate Market Capitalisation and All-Share Index ........................ 35 \nFigure 28: Volume and Value of Traded Securities .............................................. 36 \nFigure 29: Current Account Balance (US$ Billion) ................................................ 39 \nFigure 30: Share of Service Out-Payments (per cent) .......................................... 41 \nFigure 31: Share of Services Receipts (per cent) .................................................. 42 \nFigure 32: Primary Income Balance (US$ Billion)................................................. 42 \nFigure 33: Secondary Income Balance and Remittances Inflow (US$ Billion) ...... 43 \nFigure 34: External Reserves and Months of Import Cover .................................. 46 \nFigure 35: Foreign Exchange Transactions through the Economy 2022Q3 ......... 47 \nFigure 36: Foreign Exchange Sales to Authorised Dealers (US$ billion) ............... 48 \nFigure 37: Turnover in the I&E Foreign Exchange Market ................................... 48 \n \n1 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nEXECUTIVE SUMMARY \nGlobal economic activity contracted in 2022Q3, following heightened \nuncertainty in the business environment. The lingering effect of the \nRussia-Ukraine war drove the contraction in economic activities in \nAdvanced Economies (AEs), while performance in Emerging Markets \nand Developing Economies (EMDEs) was mixed, following weak \nconsumer demand in most economies. Inflation remained elevated \nacross regions, with signs of easing, due to tight monetary policy \nmeasures. Financial market performance was bearish, particularly in \nthe equities segment, impacted by interest rate hikes. World crude oil \nproduction increased following improved supply from OPEC+, \nparticularly Iran, Venezuela and Libya. Crude oil spot prices fell, owing \nto increased supplies and pessimism about the world economy. \nOn the domestic front, economic activity expanded, as the \nmanufacturing Purchasing Managers Index (PMI) was above the 50-\nindex point threshold. The manufacturing PMI slowed to 50.2 index \npoints, compared with 51.1 index points in June, attributed mainly to \nthe drag in supply delivery time and employment level. Inflationary \npressures continued, driven, mainly, by increased cost of production and \nother structural issues, such as insecurity and flooding. Headline \ninflation (year-on-year) rose to 20.77 per cent, from 18.60 per cent in \n2022Q2. Core inflation also rose to 17.60 per cent, from 15.75 per cent \nin the preceding quarter, due to increase in cost of imported products \nand foreign exchange constraints. Food inflation rose to 23.34 per cent, \nfrom 20.60 per cent in 2022Q2, owing to supply chain disruptions. \nThe fiscal performance of the Federal Government of Nigeria (FGN) \nimproved, following higher non-oil receipts, particularly from company \nincome tax. Despite lower oil revenue inflow, the retained revenue of \nthe FGN rose by 16.6 per cent to N1,227.33 billion, driven by 37.1 per \ncent increase in allocation from the Federation Account. Nevertheless, \nrevenue outcome remained below the quarterly target by 54.3 per cent. \nAt N2,419.31 billion, provisional aggregate expenditure declined by 1.4 \nper cent from the level in the preceding quarter, below the quarterly \nbenchmark by 44.1 per cent. The decline was driven, majorly, by lower \nrecurrent spending. Consequently, fiscal deficit narrowed by 15.0 per \ncent and 35.1 per cent, relative to 2022Q2 and the quarterly \nbenchmark, respectively. The consolidated public debt as at end-June \n2022 stood at N42,845.88 billion (or 23.4 per cent of GDP), within the \n40 per cent national threshold. \n \n2 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nThe financial system remained safe and sound, as financial soundness \nindicators were within the regulatory benchmarks. To moderate the \ngrowth of money supply and help rein in inflation, the Bank maintained \na tight monetary policy stance that affected liquidity in the economy. \nBroad money (M3) grew by 11.00 per cent and was within programme \ntarget when annualised. The growth in M3 was driven mainly, by the \nincrease in domestic claims, particularly claims on the central \ngovernment and private sector. Key money market rates trended \nupwards in response to the tight liquidity condition. On the Nigerian \nExchange (NGX) Limited, activities were bearish, reflecting investors’ \nportfolio switching, following tight financial conditions. As such, the All-\nShare Index (ASI) of the NGX declined, on account of flight to profit in \nthe fixed income market. \nDespite the prevailing global economic condition, the current account \nmaintained a lower surplus position of US$1.89 billion (1.7 per cent of \nGDP), from US$5.07 billion (4.7 per cent of GDP) in the previous quarter. \nHowever, the financial account recorded a lower net incurrence of \nfinancial liabilities of US$2.07 billion, relative to US$3.16 billion (2.8 per \ncent of GDP) in 2022Q2, reflecting the impact of monetary tightening \nacross major advanced economies. The stock of external reserves at \nend-September 2022 stood at US$37.51 billion, compared with \nUS$39.16 billion at end-June 2022. The current level of external reserves \ncould finance 9.0 months of import of goods only, or 6.5 months of \nimport of goods and services. The average exchange rate of the naira \nper US dollar at the I&E window, was ₦426.34/US$, compared with \n₦415.70/US$, in 2022Q2. \n \nThe prospect for higher growth in the global economy is pessimistic, due \nto uncertainties prevalent in major economies and elevated global \ninflation. On the domestic front, growth prospects remain positive, but \ncould be constricted by shrinkage in global demand, persistent security \nchallenges and perennial infrastructural deficit. In addition, inflationary \npressure is expected to remain elevated in the next quarter, due to rising \nenergy and food prices, stemming from increased production and \ntransportation costs. However, given the tight policy stance of the Bank, \nit is expected that inflation would be moderated in the near-term. \n \n \n \n \n \n3 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n1.0 GLOBAL ECONOMIC DEVELOPMENTS \n1.1 \nGlobal Economic Activities \nGlobal economic activity contracted in 2022Q3, the first time since \n2020Q2, as uncertainties in business environment heightened. Tight \nfinancial conditions, heightened uncertainty linked to the Russia-\nUkraine war, supply shortages and high inflation adversely effected the \neconomy. Thus, the average J.P. Morgan Global Composite Purchasing \nManager’s Index (PMI) contracted to 49.9 index points from 52.0 index \npoints in 2022Q2. Similarly, the manufacturing and services PMI slowed \nto 50.7 index points and 50.1 index points, from 53.3 index points and \n52.7 index points in the second quarter, respectively. The rate of \nincrease in employment moderated, as the index fell by 1.4 index points \nto 51.83 index points. This was due to slowdowns in hiring amid \nweakening output growth (Table 1). \nTable 1: Global Purchasing Managers' Index (PMI) \n \n \n. \n \n2022Q1 \n2022Q2 \n2022Q3 \nComposite \n52.5 \n52.0 \n 49.9 \nManufacturing \n53.3 \n53.3 \n 50.7 \nServices (Business Activity) \n52.9 \n52.7 \n 50.1 \nEmployment Level \n52.0 \n53.2 \n 51.8 \n Source: JP Morgan, IHS Markit \nIn Advanced Economies (AEs), economic activities contracted, due to the \nlingering effects of the Russia-Ukraine war. The PMI in most AEs fell \nbelow the threshold of 50.0 index points as output dwindled across \nboth the manufacturing and service sectors. Specifically, US production \ndeclined due to subdued demand, resulting in an output contraction to \n47.3 index points from 54.0 index points in 2022Q2. Similarly, \nweakened demand in Germany led to a contraction in PMI to 46.9 index \npoints from 55.3 index points. In the UK, output slowed to 50.3 index \npoints from 55.3 index points in the preceding quarter, on account of \nconstrained demand. Japan followed a similar pattern, as economic \nactivities slowed to 50.2 index points from 52.5 index points in the \npreceding quarter, owing to intense cost pressure and the impact of \ntyphoon Nanmadol (Figure 1). \n \n \nEconomic activity in \nAdvanced \nEconomies \nGlobal Economic \nConditions \n \n4 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nFigure 1: Selected Advanced Economies’ PMIs \n \nSource: Trading Economics/Various countries’ websites. \n \nThe performance of economic activities in Emerging Markets and \nDeveloping Economies (EMDEs) was mixed, as most economies within the \nregion experienced weak consumer demand. In China, economic \nactivities remained subdued in 2022Q3, desoite improvement in PMI. \nAlthough the PMI improved to 48.5 index points from 44.4 index points \nin the preceding quarter, the index remained in the contraction mode. \nThe persistence of the economyin the contraction zone was occasioned \nby widespread COVID-19 lockdowns. Also, the PMI indices in Turkey \nand South Africa declined to 46.9 index points and 49.2 index points, \nfrom 48.8 index points and 51.26 index points in the preceding quarter, \nrespectively. Economic activities in Turkey and South Africa slowed due \nto fragile demand conditions. However, India’s PMI slowed to 55.1 \nindex points from 58.6 index points in the preceding quarter attributed \nmainly to decline in new orders, in the face of rising cost of living (Figure \n2). \nFigure 2: PMI in Selected EMDEs \n \nSource: Trading Economics/Various countries’ websites. \n \n \n54.9\n58.3\n55.4\n51.9\n48.3\n54.0\n55.3\n53.9\n53.3\n52.5\n47.3 \n50.3 \n46.9 \n48.3 \n50.2 \n0\n10\n20\n30\n40\n50\n60\n70\nUnited States\nUnited Kingdom\nGermany\nItaly\nJapan\n2022Q1\n2022Q2\n2022Q3\n50-point Threshold\n48.0\n53.6\n50.1\n51.1\n44.4\n58.6\n48.8\n51.2\n48.5\n55.1\n46.9\n49.2\n0.0\n10.0\n20.0\n30.0\n40.0\n50.0\n60.0\n70.0\nChina\nIndia\nTurkey\nSouth Africa\n2022Q1\n2022Q2\n2022Q3\n50-point Threshold\n \n5 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n \n1.2 \nGlobal Inflation \nInflation remained elevated across regions, though with visible signs of \neasing, due to tight monetary measures. Inflation in advanced \neconomies was underpinned by idiosyncratic factors. During the \nquarter, headline inflation averaged 8.33 per cent and 7.17 per cent in \nthe US and Canada, compared with 8.64 per cent and 7.55 per cent in \n2022Q2, respectively. Inflationary pressure eased in both countries due \nto a slowdown in energy prices, particularly gasoline, following an \nincrease in the global supply of crude oil during the period. On the other \nhand, Japan’s inflation rate rose to 2.87 per cent from 2.47 per cent, \ndriven, mainly, by high cost of imports, especially food and raw \nmaterials. Similarly, inflation in Germany rose to 8.47 per cent from \n7.64 per cent in the previous quarter, due to increase in the price of \nfood and energy products (heating oil and natural gas), highlighting the \ncontinued impact of the Russia-Ukraine war. Likewise, inflation in the \nUK surged to 10.03 per cent from 7.90 per cent, stemming from the \nhigh cost of motor fuels and food prices (Figure 3). \nFigure 3: Inflation Rates in Selected Advanced Economies, Average (Per cent) \n \nSource: The Organisation for Economic Cooperation and Development. \n \nInflation in the Emerging Markets and Developing Economies (EMDEs) \nwas also elevated, due to exchange rate pressures and other structural \nchallenges. China’s inflation rate rose to 2.67 per cent from 2.26 per \ncent in the preceding period, on account of higher food prices, as \nconsumption strengthened. Prices continued to inch up in South Africa, \nas consumer prices rose to 7.63 per cent from 6.68 per, due to \nincreased transportation cost, and higher prices of fuel, food and non-\nalcoholic beverages. In Turkey, inflation rose to 81.10 per cent from \n74.07 per cent, as the lira plunged further amidst continued interest \nrate cuts. However, disinflation was experienced in India as headline \n5.34\n2.67\n-0.17\n4.06\n3.90\n1.73\n2.18\n8.64\n7.90\n2.47\n7.55\n7.64\n5.29\n6.91\n8.33\n10.03\n2.87\n7.17\n8.47\n5.87\n8.40\n-2.00\n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\nUS\nUK\nJP\nCND\nGM\nFRN\nIT\nQ3-2021\nQ2-2022\nQ3-2022\nGlobal Inflation \n \n6 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \ninflation declined to 7.04 per cent from 7.28 per cent in 2022Q2, driven, \nmainly, by the rising cost of food, transport, housing, and education \n(Figure 4). \n Figure 4: Inflation Rates in Selected EMDEs, Average (per cent) \n \nSource: OECD \n \n1.3 \nGlobal Financial Markets \nFinancial market performance was bearish in 2022Q3, impaired by \npersistent inflation and rising interest rates. Particularly, the equity \nmarket indices were in the bear-market territory due to the tight \nfinancial conditions, as central banks moved to tame inflation, and fear \nof possible recession by market participants. In the US, the NASDAQ, \nS&P500 and Dow Jones stocks declined by 4.63 per cent, 5.28 per cent \nand 6.66 per cent, respectively. Similarly, the NIKKEI 225 closed at 1.73 \nper cent lower than the previous quarter, despite rallying at the \nbeginning of, and the greater parts of the quarter. This was due to the \ncontinuous weakening of the Yen against the US dollar. \nIn Europe, the EURO STOXX50 dipped by 3.96 per cent, following global \ntrends. Moreso, in the UK, the weakening pound sterling negatively \ninfluenced trading in the quarter, and the announcement of a fiscal \npackage by the new government in September attracted negative \nsentiments in the market, which led to further depreciation of the \nsterling to an all-time low against the US dollar. The FTSE 100 index fell \nby 3.84 per cent in 2022Q3. \nEquity markets in EMDEs also posted negative returns in 2022Q3. The \nstrengthening of the US dollar against domestic currencies, dwindling \nglobal growth prospects, increased domestic interest rates and \nelevated levels of inflation, combined to affect the development in the \nequities segment. China’s Shanghai Stock Exchange-A fell by 70.0 per \n0.8\n4.8\n1.6\n5.8\n19.3\n4.9\n17.0\n2.3\n7.3\n3.8\n7.8\n74.1\n6.7\n17.7\n2.7\n7.0\n5.2\n8.5\n81.1\n7.6\n20.3\n0.00\n10.00\n20.00\n30.00\n40.00\n50.00\n60.00\n70.00\n80.00\n90.00\nCHN\nIND\nIN\nMEX\nTUR\nSA\nNIG\nQ3-2021\nQ2-2022\nQ3-2022\n \n7 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \ncent relative to the preceding quarter, reflecting investors’ reaction to \nthe hostility between Beijing and Washington over Taiwan, and the \nZero COVID-19 policy. \nThe South African JSE also fell by 7.55 per cent as industrials performed \nthe worst due to the country’s energy struggles, which negatively \naffected the mining and manufacturing sectors. Conversely, Egypt’s \nblue-chip index, EGX30, increased by 3.80 per cent in 2022Q3, as the \ngovernment concluded plans for a new IMF lending package aimed at \nstemming the currency crisis (Figure 5). \nFigure 5: Global Stock Market Equity Indices \n \nSource: Bloomberg. \n \n \nThe heightened market volatility spilled into fixed income securities, as \ncentral banks and market investors continued to contend with persistent \ninflation amid slowing growth environment. Ten-year government bond \nyields increased during the quarter, as central banks continued to show \ncommitments to tame inflation. The average Euro Area 10-year \ngovernment bond yield rose to 1.35 per cent in 2022Q3 from 1.10 per \ncent in the preceding quarter, following further increases in the policy \nrate by 50 basis points (bps) and 75 bps in July and September, \nrespectively. In the UK, the average yield on 10-year government bond \nrose to 2.57 per cent from 2.03 per cent in the preceding quarter on \nthe back of expectations about further policy rate hikes. Also, the \npolitical uncertainty and the anticipated fiscal response to the energy \ncrisis weighed negatively on the market, resulting in increased yield. \nThe US Fed also strongly reiterated the hawkish stance to curb inflation. \nThus, the US 10-year government bond-yield rose to 3.10 per cent from \n2.92 per cent in 2022Q2. \n-5.28\n-3.84\n-5.30\n-6.66\n-3.82\n-1.73\n-1.86\n3.80\n-5.24\n-7.00\n-7.55\n-8.08\n-0.10\n-12.73\n-5.79\n-8.23\n-1.40\n-3.88\n-17.91\n-10.20\n-16.90\n-13.50\n-20.00\n-15.00\n-10.00\n-5.00\n0.00\n5.00\n2022Q3\n2022Q2\n \n8 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nIn EMDEs, the trend in government bond yields was mixed as some of \ntheir currencies weakened against the US dollar. In Brazil, the 10-year \ngovernment bond yield rose marginally by 20 bps to 5.90 per cent, \nreflecting sentiments ahead of October’s presidential election. \nHowever, in China, yields fell, on account of monetary easing1 (Figure \n6). \n Figure 6: 10-Year Government Bond Yields \n \nSource: Bloomberg. \n \n \n \n1.4 \nCentral Banks’ Policy Rates \nCentral banks, around the world, continued to reaffirm commitments to \ntame inflation, with continuous rate hikes, although this has led to \nsubdued growth outlooks for most economies. The US Federal Reserve \nincreased its policy rate by 75 every month in 2022Q3, culminating in a \npolicy rate of 3.25 per cent at the end of the quarter. Similarly, the Bank \nof England raised its policy rate by a cumulative 100 bps in 2022Q3 to \n2.25 per cent and announced the decision to reduce the purchase of \ngovernment bonds by £80 billion over the next twelve months. \nLikewise, the Bank of Canada further raised its policy rate to 3.25 per \ncent, a cumulative of 175 bps during the quarter, making it the highest-\nlevel of borrowing cost since 2008. \nSimilarly, monetary tightening continued in some EMDEs as aggregate \nprices remained elevated amid economic growth concerns and \ninstability in capital flows. The Bank of Mexico increased its repo rate \nby 150 bps, cumulatively, to 9.25 per cent between August and \n \n1 The PBOC slashed rates for the second time this year in August 2022. The 1-year LPR was cut \nby 5 bps to a record low of 3.65 per cent while, the 5-year LPR was slashed by 15 bps to 4.30 \nper cent. \n2.92\n2.98\n1.10\n1.10\n2.03\n1.62\n0.23\n2.80\n5.70\n12.66\n3.10\n3.00\n1.35\n1.35\n2.57\n1.93\n0.21\n2.71\n5.90\n12.66\n-2.00\n0.00\n2.00\n4.00\n6.00\n8.00\n10.00\n12.00\n14.00\nUS\nCANADA\nGERMANY EURO AREA\nUK\nFRANCE\nJAPAN\nCHINA\nBRAZIL\nNIGERIA\nPer cent (%)\n2021Q3\n2022Q2\n2022Q3\n \n9 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nSeptember. In India, the key repo rate was raised to 5.9 per cent in \nSeptember amid rising concerns over high inflation, strong global \nheadwinds and a plunge in the rupee. In Ghana, the policy rate was \nincreased by 300 bps to 22.0 per cent, as the cedi continued to \ndepreciate amidst elevated inflation. Other emerging market central \nbanks, such as South Africa and Nigeria, also raised their policy rates \nduring the period to 6.25 per cent and 15.5 per cent, respectively, to \nstem rising prices. Conversely, in Turkey, despite inflation reaching 80.0 \nper cent during the quarter, the Bank of Turkey reduced its policy rate \nby 200 basis, to 12.0 per cent from, 14.0 per cent in the previous \nquarter, in a bid to support the use of the Lira, citing recession risks \n(Table 2). \nTable 2: Central Bank Policy Rates (per cent) \nCountry \n2021Q3 \n2022Q2 \n2022Q3 \nUnited States \n0.25 \n1.75 \n3.25 \nUnited \nKingdom \n0.1 \n1.25 \n2.25 \nJapan \n-0.1 \n-0.1 \n-0.1 \nCanada \n0.25 \n1.5 \n3.25 \nEuro Area \n0 \n0 \n1.25 \nChina \n3.85 \n2.85 \n3.65 \nIndia \n4 \n4.9 \n5.9 \nMexico \n4.75 \n7.75 \n9.25 \nIndonesia \n3.5 \n3.5 \n4.25 \nTurkey \n18 \n14 \n12 \nSouth Africa \n3.5 \n4.7 \n6.25 \nGhana \n13.5 \n19 \n22 \nNigeria \n11.5 \n13 \n15.5 \nSource: Various Central Banks’ websites. \n \nCredit spreads between government and corporate bonds widened \nfurther in 2022Q3, as interest rate hikes across most AE central banks \ndrove government bond yields, which weighed heavily on market \nreturns. In the US, Euro area and japan, credit spreads widened by 149 \nbps, 138 bps and 99 bps, respectively, compared to the preceding \nquarter (Figure 7). \n \n \n \n10 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n Figure 7: Credit Spreads in Selected Advanced Economies \n \n Source: Bloomberg \n \nIn the foreign exchange market, the dollar continued to gain \nsignificantly against the currencies of both AEs and EMDEs, given the \nFed’s tight monetary policy stance. Among the AEs, the Japanese Yen \ndepreciated by 11.01 per cent, the British Pound by 9.3 per cent, and \nthe Euro by 7.84 per cent. Likewise, the currencies of EMDEs including \nGhana, Turkey, South Africa, Brazil and Nigeria also weakened vis a vis \nthe US dollar by 22.08 per cent, 17.09 per cent, 9.65 per cent, 3.24 per \ncent and -2.82 per cent, respectively. This development portends major \nrisks, particularly for countries with high dollar-denominated debts, as \nworld interest rates rise, and financial conditions tighten further. \nConversely, the Mexican Peso appreciated vis-a-vis the US dollar by \n0.15 per cent, due to the hawkish actions of the central bank to tame \ninflation and the trade relationship between the countries2 (Figure 8). \n \n \n \n2 Roughly 80% of Mexico’s exports go to the US. \n0.13\n-0.55\n-0.09\n0.07\n-0.76\n0.44\n0.02\n1.52\n-0.36\n-0.02\n1.34\n-0.75\n1.99\n1.02\n3.01\n0.49\n-0.02\n2.33\n-0.75\n3.65\n2.40\n-1.00\n-0.50\n0.00\n0.50\n1.00\n1.50\n2.00\n2.50\n3.00\n3.50\n4.00\nUS\nCANADA\nGERMANY\nEURO AREA\nUK\nFRANCE\nJAPAN\nPer cent (%)\n2021Q3\n2022Q2\n2022Q3\nSelected Currencies \nagainst the US Dollar \n \n11 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n \nFigure 8: Foreign Exchange Rates against the US Dollar (average percentage change) \n Note: Average January to June 2022 and July to September 2022 \n Source: Bloomberg \n \n1.5 \nGlobal Commodity Markets \nTotal world crude oil supply increased in 2022Q3, as OPEC+ supply rose \ndue to increased production levels, particularly, in Iran, Venezuela, and \nLibya. Total world crude oil supply increased by 2.2 per cent, to 101.03 \nmillion barrels per day (mbpd) in 2022Q3, from 98.83 mbpd in the \npreceding quarter. The rise was driven, largely, by increased supply \nfrom OECD producing countries, particularly, with strong recoveries in \nLibya, Iran, Venezuela and marginal gains from Saudi Arabia and the \nUAE, which offset the losses in Nigeria, Kazakhstan, and Russia. \nOPEC’s crude oil supply rose by 2.1 per cent, to 34.50 mbpd in 2022Q3, \nfrom 33.79 mbpd in the preceding quarter. The rise was driven, mainly, \nby the combined production levels in Iran, Venezuela, and Libya, \nrespectively. Supply from Libya rebounded, as the force majeure on oil \nproduction was lifted, after the end of the blockade at its oil facilities. \nOn the demand side, total world crude oil demand rose by 0.4 per cent, \nto 101.56 mbpd in 2022Q3, from 101.18 mbpd in the preceding \nquarter. Global crude oil demand rose slightly as China recover \nWorld Crude Oil \nSupply and Demand \n-9.33\n-2.65\n-7.84\n-11.01\n-9.65\n-6.60\n-3.24\n-5.38\n-4.47\n0.15\n-3.73\n-2.82\n-22.08\n-17.39\n-17.09\n-3.25\n-80\n-60\n-40\n-20\n0\n20\nUK\nCanada\nEuro area\nJapan\nSouth Africa\nEgypt\nBrazil\nChina\nIndia\nRussia\nMexico\nKenya\nNigeria\nGhana\nArgentina\nTurkey\nIndonesia\nAdvanced\nEconomies\nEmerging and Developing Economies\nJan - Jun\nSince July 1\n \n12 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \ngradually from the post COVID-19 restrictions. In addition, crude oil \ndemand in the US also increased. \n \nCrude oil spot prices fell in 2022Q3, due to increased supplies and \npessimism about the world economy. The average spot price of Nigeria’s \nreference crude oil, the Bonny Light (34.9° API), fell by 10.9 per cent to \nUS$106.73 per barrel (pb) in 2022Q3, from US$118.34 pb in the \npreceding quarter. The prices of Brent, at US$105.48 pb, Forcados at \nUS$108.01 pb, WTI at US$94.86 pb and OPEC Reference Basket (ORB) \nat US$101.83 pb, all exhibited similar trend as the Bonny Light (Figure \n9). \nThe decline in crude oil prices was attributed, largely, to increased \nsupplies and pessimism about the world economy. The deteriorating \nglobal economic environment and recurring COVID-19 lockdowns in \nChina continue to weigh on market sentiment (Figure 9). \n \n Figure 9: Quarterly Crude Oil Prices (US$ per barrel) \n \nSource: Thomson Reuters, CBN Staff Compilation \n \nAverage spot prices of gold, silver, platinum, and palladium decreased in \n2022Q3 as demand for the precious metals fell. The average spot prices \nof gold and silver declined by 7.8 per cent and 14.9 per cent to sell at \nUS$1,727.17 per ounce and US$19.23 per ounce, from US$1,872.98 per \nounce and US$22.61 per ounce, respectively, in the preceding quarter. \nThe decline in the prices of the precious metals was due to lower \ndemand for the precious metals as safe haven assets, due to the higher \nyields on US treasury bonds as the Federal Reserve raised interest rates \nto combat surging inflation. \n \n0\n20\n40\n60\n80\n100\n120\n140\nQ3 2021\nQ4 2021\nQ1 2022\nQ2 2022\nQ3 2022\nBonny Light\nBrent\nForcados\nWTI\nOpec Basket\nCrude Oil Prices \nOther Mineral \nCommodities \n \n13 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nSimilarly, the prices of platinum and palladium declined by 7.6 per cent \nand 0.5 per cent to sell at US$884.86 per ounce and US$2,078.37 per \nounce in 2022Q3, from US$957.26 per ounce and US$2,088.12 per \nounce, respectively, in the preceding quarter (Figure 10). The prices of \nthe industrial metals declined in response to pessimism about future \ndemand as major central banks, such as the US Federal Reserve, \nincreased interest rates to tame inflation, which could cause a \nslowdown in global economic activity, including vehicle manufacturing. \nBoth industrial metals are used as auto catalysts to reduce pollution in \nautomobiles (Figure 10). \n \n Figure 10: Price Changes in Selected Metals (per cent) for 2022Q3 \n \nSource: Refinitiv Eikon IV (Reuters) \n \n Prices for agricultural commodities maintained a downward trend in \n2022Q3, fuelled by improved global supply. The average price index for \nall the monitored commodities declined by 12.3 per cent to 93.08 index \npoints from the 106.68 index points in the preceding quarter. The \ndecrease was due, largely, to the declining prices of palm oil, cotton, \nwheat, and rubber, which fell by 38.9 per cent, 21.0 per cent, 19.9 per \ncent, and 12.6 per cent, respectively. The development was driven, \nlargely, by increased supply from producing countries. \nThe lower wheat price was influenced by the Russian-Ukraine black sea \ngrain agreement, which enabled the massive export of grains, \nespecially, wheat from Ukraine, while the decline in the price of palm \noil was attributed to the increased exports of palm oil products in \nMalaysian, which rose by over 10.0 per cent. Furthermore, increase in \ncotton cultivation in the US and India accounted for the decline in the \nprice of the commodity. \n-7.8\n-14.9\n-7.6\n-0.5\n-3.5\n-20.8\n-13.4\n-15.1\n-25.0\n-20.0\n-15.0\n-10.0\n-5.0\n0.0\nGold\nSilver\nPlatinum\nPalladium\nWith corresponding month\nWith preceding month\nAgricultural \nCommodity Prices \n \n14 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n However, the prices of groundnut and coffee increased by 7.8 per cent \nand 3.5 percent, respectively, compared with the preceding quarter, \nlargely, on the back of increased demand and adverse weather \nconditions (Table 3). \n \nTable 3: Indices of Average World Prices of Nigeria’s Major Agricultural \nExport Commodities for Third Quarter 2022 (Dollar Based) (Jan. 2010=100) \nCOMMODITY \n2021Q3 \n2022Q2 \n2022Q3 \n% Change \n \n \n \n \n(1) & (3) \n(2) & (3) \n \n1 \n2 \n3 \n4 \n5 \nAll Commodities \n 86.02 \n106.68 \n93.08 \n8.22 \n-12.75 \nCocoa \n 80.28 \n77.84 \n74.51 \n-7.19 \n-4.27 \nCotton \n 60.06 \n93.92 \n74.17 \n23.48 \n-21.03 \nCoffee \n 104.27 \n110.09 \n113.93 \n9.26 \n3.49 \nWheat \n 104.00 \n160.64 \n128.68 \n23.73 \n-19.89 \nRubber \n 35.28 \n35.28 \n30.85 \n-12.55 \n-12.55 \nGroundnut \n 106.31 \n110.11 \n118.72 \n11.68 \n7.82 \nPalm Oil \n 91.42 \n132.31 \n80.78 \n-11.64 \n-38.95 \nSoya Beans \n 106.51 \n133.27 \n123.03 \n15.51 \n-7.68 \nSources: (1) World Bank Pink Sheet (2) Staff Estimates \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n15 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n2.0 DOMESTIC ECONOMIC DEVELOPMENTS \n2.1 \nREAL SECTOR DEVELOPMENTS \nThe Nigerian economy grew in 2022Q3, indicating eighth consecutive \nquarters of growth since recession. The growth in the quarter was driven \nby activities in the non-oil sector. Real GDP grew by 2.25 per cent year-\non-year, though, slower than the growth of 3.54 per cent in 2022Q2. \nGrowth slowed on account of dampening impact of global headwinds, \nsuch as high energy prices, higher input costs, persisting structural \nchallenges, such as security concerns, lower crude oil output, foreign \nexchange concerns, as well as supply disruptions in food and other farm \nproduce. Despite these, increased penetration and usage of ICT \nservices and higher levels of domestic trade supported the growth \noutcome of the economy in 2022Q3. \nOn a quarter-on-quarter basis, real GDP grew by 9.68 per cent in \n2022Q3, reflecting higher economic activity than the preceding \nquarter. The realised growth was driven by the non-oil sector which \ngrew by 4.27 per cent. The non-oil sector accounted for 94.34 per cent \nof economic activities in the economy in 2022Q3 (Figure 11). \n Figure 11: Real GDP Growth Rate, 2020Q3-2022Q3, Year-on-Year \n \nSource: National Bureau of Statistics \n \nThe Services and Agriculture sectors grew, in real terms, in 2022Q3, while \nthe industry sector maintained its contraction. The Services sector \ncontinued its impressive performance, growing by 7.01 per cent in \n2022Q3, compared with 6.70 per cent in 2022Q2. The sector also \ncontributed 3.48 percentage points, representing the highest \ncontribution to GDP growth rate. \n \n-30.0\n-25.0\n-20.0\n-15.0\n-10.0\n-5.0\n0.0\n5.0\n10.0\n2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3\nPer cent \nOil GDP\nNon-oil GDP\nDomestic Output \nand Economic \nActivities \nSectoral GDP \nperformance \n \n16 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n Figure 12: Sectoral Growth Rate of Real GDP, 2020Q3-2022Q3 \n \n Source: National Bureau of Statistics \nWithin the Services sector, Information & Communications, Trade, \nTransportation & Storage, Financial & Insurance, and Real Estate \nsubsectors drove overall growth, contributing 1.50, 0.76, 0.40, 0.40, \nand 0.25 percentage points, respectively, to the growth outcome. The \nsubsectors grew by 10.53 per cent, 5.08 per cent, 41.59 per cent, 12.70 \nper cent and 4.56 per cent, respectively. The subsectors benefited from \nincreased economic activities that characterised the period, \nparticularly, activities in the road transport and insurance. \nThe Agriculture sector maintained its growth trajectory at 1.34 per cent \nin 2022Q3, compared with 1.20 per cent in the preceding quarter. The \ngrowth in Agriculture was due to increased demand and seasonal \nfactors that characterised the period. Thus, forestry, livestock, crop \nproduction, and fishery subsectors grew by 2.19 per cent, 1.33 per cent, \nand 0.36 per cent, respectively, compared with 1.29 per cent, a \ncontraction of 2.87 per cent, and growth rates of 1.54 per cent, and \n0.89 per cent, respectively, in 2022Q2. \nThus, forestry, crop production, and fishery subsectors, grew by 2.19 \nper cent, 1.33 per cent and 0.36 per cent, respectively IN 2022Q3, \ncompared with 1.29 per cent, 1.54 per cent and 0.89 per cent, for \nforestry, crop production and fishery subsectors, respectively, in \n2022Q2. Livestock subsector grew by 1.55 per cent, in 2022Q3, as \nagainst the contraction of 2.87 per cent in 2022Q2. \nThe Industry sector contributed negatively to real GDP growth in \n2022Q3. The Sector, which has been in contraction since 2021Q2, \ncontracted further by 8.00 per cent in 2022Q3, compared with a \ncontraction of 2.30 per cent in 2022Q2. The poor performance of the \n1.39\n3.42\n2.28\n1.30\n1.22\n3.58\n3.16\n1.20\n1.34\n-6.12\n-7.30\n0.94\n-1.23\n-1.63\n-0.05\n-6.81\n-2.30\n-8.00\n-5.49\n1.31\n-0.39\n9.27\n8.41\n5.58\n7.45\n6.70\n7.01\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\n2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3\nPer cent\nAgriculture\nIndustry\nServices\nTotal GDP\n \n17 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nsector was due to the weak performance of the Mining and Quarrying \nsubsector, occasioned by the huge contractions in Coal Mining and \nCrude Petroleum & Natural Gas subsectors by 43.49 per cent, and 22.67 \nper cent, respectively. \nThe contraction in the oil sector was attributed to the lower volume of \ncrude oil production in the quarter, which declined to 1.13mbd from \n1.28mbpd produced in 2022Q2. The development was occasioned by \nthe persisting damages to some key pipelines and terminals, crude oil \ntheft, the frequent shut-ins, and the force majeure declared on Bonny \nand Brass terminals over increased cases of pipeline vandalism. \nThe performance of the subsectors is shown in figures 13 and 14. \n Figure 13: Top 16 Subsectors with largest Contribution to GDP and their Growth \nRates in 2022Q3 \n \nSource: National Bureau of Statistics \n \nFigure 14: Subsectors with Least Contribution to GDP Growth and their \nGrowth Rates in 2022Q3 (Per cent) \n \nSource: National Bureau of Statistics \n \n0.01\n0.01\n0.01\n0.02\n0.02\n0.03\n0.05\n0.05\n0.07\n0.18\n0.25\n0.37\n0.40\n0.40\n0.76\n1.50\n0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60\n(2.19%) Forestry\n (3.89%) Water supply, sewage, waste Mang.\n (7.79%) Arts, Entertainment & Recreation\n(1.10%) Education\n(1.55%) Livestock\n(4.58%) Human Health & Social Services\n (6.77%) Accommodation and Food Services\n(2.33%) Public Administration\n(2.23%) Professional, Scientific & Technical…\n(5.52%) Construction\n(4.56%) Real Estate\n(1.33%) Crop Production\n(12.70%) Financial and Insurance\n(41.59%) Transportation and Storage\n(5.08%) Trade\n(10.53%) Information and Communication\n-0.01\n-0.06\n-0.17\n-1.63\n Electricity,Gas,Steam & Air conditioner (-\n3.56%)\nOther Services (-2.67%)\nManufacturing (-1.19%)\nMining and Quarrying (-21.31%)\n \n18 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n2.1.2 Domestic Price Development \nElectricity generation improved on account of the maintenance of \ntransmission and distribution infrastructure and increase in water supply \nlevel. Consequently, the estimated average electricity generation in \n2022Q3 increased by 8.6 per cent to 3,435.5 MW/h from 3,162.4 \nMW/h in the preceding quarter. \n \nEqually, the estimated average electricity consumption for 2022Q3, at \n3, 225.9 MW/h, increased by 12.4 per cent, compared with 2,869.2 \nMW/h in the preceding quarter. \n2.1.2 Domestic Price Developments \nHeadline Inflation remained elevated in 2022Q3, driven by increases \nin food and non-food components of the CPI basket. Headline \ninflation (year-on-year) rose to 20.77 per cent in 2022Q3, from \n18.60 per cent, in the preceding quarter, (Fig. 15). The rise was \ndriven by increase in the cost of production, following persisting \nhigh energy prices, exchange rate constraint, increase in transport \nand logistics cost as well as other structural issues, such as \ninsecurity. The disruption in the supply of food products, and the \nincrease in other input costs contributed to the rising inflation. \n Figure 15: Headline, Food and Core Inflation (Year-on-Year) \n \nSource: NBS and Staff Estimates \n \nCore inflation rose to 17.60 per cent in 2022Q3, from 15.75 per cent in \nthe previous quarter. The rise in core inflation was attributed to the \nincrease in cost of imported products, including local manufacturing \ninputs, arising from the continued rise in global inflation and tighter \nglobal economic conditions and persisting foreign exchange \nconstraints. Also, the increase in energy prices affected processed food, \n0.0\n5.0\n10.0\n15.0\n20.0\n25.0\n2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3\nPer cent (%)\nHeadline\nCore\nFood\nHeadline \nInflation \nCore \nInflation \nElectricity \nGeneration \nElectricity \nConsumption \n \n \n19 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nclothing and footwear, health, transport, furnishings, household \nequipment and household maintenance, thus, contributing to the \nuptick in core inflation. \nFood inflation also rose to 23.67 per cent (year-on-year) in 2022Q3, \nfrom 20.60 per cent in 2022Q2. The rise in food inflation was attributed \nto the higher cost of processed food, particularly meat, milk, garri, oil \nand fats, resulting from increased cost of diesel and other farm inputs. \nThe rise in the cost of both farm produce and imported food items, such \nas fruits, vegetables, grains, rice, fish, yam and other tubers, also \ncontributed to the increase in food inflation. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nFood \nInflation \nBox Information 1☹) \nThe prices of major domestic food commodities increased in third quarter 2022, \ncompared with the preceding quarter. The increase ranged from 0.6 per cent for \nrice local sold loose to 9.1 per cent for yam tuber. This development was due to \nthe persisting security challenges affecting agricultural activities and distribution \nnetworks. Other causes were the rising cost of production, including inputs and \nenergy prices, as well as seasonal fall in supply at the height of the rainy season. \n \n2021Q3\n2022Q2\n2022Q3\n% Change\n% Change\nUNIT\n1\n2\n3\n(1) & (3)\n(2) & (3)\nAgric eggs medium size\n1kg\n589.39\n690.53\n639.96\n8.6\n-7.3\nBeans: brown, sold loose\n\"\n491.20\n546.32\n555.98\n13.2\n1.8\nBeans: white black eye, sold loose\n\"\n454.59\n523.92\n536.63\n18.0\n2.4\nGari white, sold loose\n\"\n317.93\n327.49\n312.03\n-1.9\n-4.7\nGari yellow, sold loose\n\"\n337.32\n345.66\n344.69\n2.2\n-0.3\nGroundnut oil: 1 bottle, specify bottle\n\"\n808.64\n1043.42\n1087.93\n34.5\n4.3\nIrish potato\n\"\n368.49\n461.20\n489.92\n33.0\n6.2\nMaize grain white, sold loose\n\"\n270.40\n311.85\n306.04\n13.2\n-1.9\nMaize grain yellow, sold loose\n\"\n274.30\n312.74\n311.74\n13.7\n-0.3\nOnion bulb\n\"\n307.97\n395.12\n419.71\n36.3\n6.2\nPalm oil: 1 bottle, specify bottle\n\"\n671.18\n868.98\n899.38\n34.0\n3.5\nRice agric, sold loose\n\"\n464.72\n511.33\n519.54\n11.8\n1.6\nRice local, sold loose\n\"\n410.65\n462.96\n465.66\n13.4\n0.6\nRice, medium grained\n\"\n456.87\n500.19\n523.03\n14.5\n4.6\nRice, imported high quality, sold loose\n\"\n548.76\n627.63\n657.39\n19.8\n4.7\nSweet potato\n\"\n195.93\n240.86\n252.26\n28.7\n4.7\nTomato\n\"\n384.49\n435.87\n439.48\n14.3\n0.8\nVegetable oil: 1 bottle, specify bottle\n\"\n773.90\n1012.23\n1053.74\n36.2\n4.1\nWheat flour: prepackaged (Golden Penny)\n2kg\n870.71\n1082.17\n1108.73\n27.3\n2.5\nYam tuber\n1kg\n307.02\n370.00\n403.74\n31.5\n9.1\nSources: National Bureau of Statistics and Staff Estimates\nDOMESTIC PRICES OF SELECTED AGRICULTURAL COMMODITIES THIRD QUARTER 2022\n \n20 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n2.1.4 Socio-Economic Developments \nThe rate of confirmed cases of COVID-19 infection increased during the \nquarter under review, due to lower risk perception. Data from the \nNational Centre for Disease Control (NCDC) show that at end-\nSeptember 2022, the rate of confirmed cases rose by 3.03 per cent, \ncompared with 0.85 per cent in 2022Q2 (Figure 16). The rise in \nconfirmed cases points to the laxity in the compliance with the non-\nclinical COVID-19 preventive protocols, because of the low-risk \nperception. However, the rate of active cases declined by 7.70 per cent, \nwhile discharged cases decreased by 3.24 per cent. In the review \nperiod, 11 deaths were recorded, as against 2 deaths in the second \nquarter of 2022. \nData from the National Primary Health Care Development Agency \n(NPHCDA) showed that 37.0 per cent of the target population had been \nfully vaccinated against the COVID-19 infection as at end-September \n2022, compared with 20.9 per cent at the end of the previous quarter. \nFurthermore, 10.6 per cent had been partially vaccinated, compared \nwith 10.7 per cent in 2022Q2. \n \n Figure 16: COVID-19 Statistics3 \n \nSource: NCDC \n \n As part of efforts to strengthen health security and respond to disease \nthreats, the Nigeria Centre for Disease Control (NCDC) partnered with \nthe United States, in the quarter of 2022, to train epidemiologists in a \ntwo-week intermediate-level professional certification program. This \n \n3 Covid-19 data as at end-September 2022. \n48.48\n85.93\n2.90\n22.76\n17.78\n5.42\n0.85\n3.03\n0\n20\n40\n60\n80\n100\n0\n20\n40\n60\n80\n100\n120\n2020Q4\n2021Q1\n2021Q2\n2021Q3\n2021Q4\n2022Q1\n2022Q2\n2022Q3\nTotal Confirmed Cases\nDischarged Cases\nDeath Toll\nHealth/COVID-19 \nUpdate \n \n \n21 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \ngesture from the U.S. counterpart is part of efforts to support pandemic \npreparedness in Nigeria and globally. \nThe Federal Executive Council (FEC) approved ₦27.0 billion for the \nrehabilitation of the 27km Iduani-Otuwo road which links Ondo and Edo \nStates, with a completion period of 27 months. \nThe Federal Government announced the establishment of a Pan-\nAfrican university, known as the African Aviation Aerospace University. \nThe university would purely be an aviation specialised school, affiliated \nwith the Nile University, Abuja. It would commence with two courses \n(BSc Aviation Business and BSc Meteorology), for both online and on-\nsite students. The university would focus more on research and \ndevelopment in the aviation sector and is expected to commence \nacademic activities before the end of 2022. \nAlso, the United States launched a US$48.8 million investment in \nNigeria’s education sector. The investment which is tagged ‘Leveraging \nEducation Assistance Resources in Nigeria (LEARN) Read Activity’ is \nmanaged through the US Agency for International Development \n(USAID). It is aimed at improving early grade reading in the country over \nthe next five years. The initiative would ensure that school-age children \nand youths in Nigeria are able to gain foundational skills, such as literacy \nand numeracy, while building critical social and emotional skills to \nprogress to higher levels of education, training, and employment. \nThe Federal Executive Council approved the establishment of the \nNational Flood Emergency Preparedness and Response Plan to ensure \na more resilient and effective response to tackle flooding nationwide. \nThe FEC called on operational stakeholders, including state \ngovernments to implement the plan vigorously to achieve the intended \ngoal. \n2.1.5 Domestic Crude Oil Market Developments \nDomestic crude oil production and export declined, as a result of \npersistent pipeline vandalism and oil theft as well as the industrial action, \nembarked by employees of Addax Petroleum Development Nigeria. Thus, \nNigeria’s average crude oil production and export declined by 10.9 per \ncent and 16.9 per cent to 1.14 mbpd and 0.69 mbpd in 2022Q3, from \n1.28 mbpd and 0.83 mbpd, respectively, in the preceding quarter. \nNigeria’s production level fell short of its OPEC quota of 1.81 mbpd, by \n668,000 bpd in 2022 Q3. \n \n \n \nSummary \nTransportation \nEducation \nEnvironment \n \nCrude Oil Production \nand Export \n \n22 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n2.2 \nFISCAL SECTOR DEVELOPMENTS \nThe fiscal performance of the Federal Government of Nigeria (FGN) \nimproved in 2022Q3, because of higher non-oil receipts. The FGN \nretained revenue rose by 16.6 per cent above the preceding period’s, \nfollowing a 37.1 per cent increase in allocation from the Federation \nAccount. Nevertheless, revenue outcome remained below the quarterly \ntarget by 54.3 per cent. Aggregate expenditure declined by 1.4 per cent \nfrom the level in the preceding quarter and was below the quarterly \nbenchmark by 44.1 per cent. Consequently, fiscal deficit narrowed by \n15.0 per cent and 35.1 per cent, relative to 2022Q2 and the quarterly \nbenchmark, respectively. Total public debt at N42,845.88 billion (or 23.4 \nper cent of GDP) as at end-June 2022, remained elevated but within the \n40 per cent national threshold. \n \n2.2.1 Federation Account Operations \nFederation Account earnings improved, following higher non-oil receipts. \nAt N3,675.43 billion, gross federation revenue exceeded the level in \n2022Q2 by 14.7 per cent, but fell below the benchmark of N4,598.25 \nbillion by 20.1 per cent. The increase in revenue was attributed, largely, \nto the significant jump in receipt from company income tax. In terms of \ncontribution to total federation revenue, non-oil revenue maintained \nits dominance, at 66.5 per cent, while oil receipt accounted for the \nbalance of 33.5 per cent. \n \nOil revenue, at N1,232.54 billion, declined by 4.9 per cent relative to \nthe preceding quarter, driven by 48.1 per cent drop in receipt from \ndomestic crude oil and gas sales. This was attributed to low domestic \ncrude oil production associated with crude oil theft and under-recovery \non crude oil sales. Relative to the quarterly benchmark, oil earnings in \n2022Q3 was 48.1 per cent short, following shortfalls in all the sub-\ncomponents of oil revenue (crude oil and gas exports, domestic crude \noil and gas sale, petroleum profit tax and royalties, and others). \nIn contrast, non-oil receipts at N2,442.89 billion, outperformed receipts \nin 2022Q2 and the quarterly benchmark by 28.0 per cent and 9.9 per \ncent, respectively. The increase was attributed, largely, to higher \ncollections from company income tax, as a result of the impact of the \nAugust 31st deadline (an extension of the statutory June 30 cut-off) for \nregistered companies to file-in tax returns. Notably, collections from \ncompany income tax and value-added tax, at N1,101.32 billion and \nN629.58 billion, exceeded their quarterly targets by 121.6 per cent and \nDrivers of Federation \nRevenue \n \n23 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n \n \n \n \n \n \nTable 4: Federally collected Revenue and Distribution to the Three-Tiers of \nGovernment (N Billion) \n \n2021Q3 \n2022Q2 1/ \n2022Q3 1/ \n Budget \nFederation Revenue (Gross) \n2,864.43 \n3,204.17 \n3,675.43 \n4,598.25 \nOil \n \n1,142.70 \n \n 1,296.24 \n 1,232.54 \n \n2,375.11 \n \nCrude Oil & Gas Exports \n0.00 \n0.00 \n0.00 \n202.71 \nPPT & Royalties \n833.19 \n1096.70 \n1,146.06 \n1592.74 \nDomestic Crude Oil/Gas Sales \n276.66 \n176.42 \n64.56 \n126.13 \nOthers \n32.85 \n23.11 \n21.91 \n453.53 \nNon-oil \n1,721.73 \n1,907.93 \n2,442.89 \n2,223.15 \n Corporate Tax \n629.06 \n625.94 \n1,101.32 \n496.95 \n Customs & Excise Duties \n358.81 \n403.65 \n463.97 \n464.64 \n Value-Added Tax (VAT) \n484.11 \n611.51 \n629.58 \n610.45 \n Independent Revenue of Fed. Govt. \n240.88 \n258.04 \n239.23 \n554.05 \nOthers* \n8.87 \n8.79 \n8.79 \n97.06 \nTotal Deductions/Transfers** \n733.03 \n1,267.37 \n1,265.80 \n1,049.22 \nFederally Collected Revenue \n2,131.40 \n1,936.79 \n2,409.62 \n3,549.04 \nLess Deductions & Transfers \nplus: \n \n \n \n \nAdditional Revenue \n9.38 \n106.16 \n20.00 \n52.44 \nBalance in Special Account from \n2019 \n0.00 \n0.00 \n0.00 \n0.00 \nExcess Crude Revenue \n0.00 \n0.00 \n20.00 \n0.00 \nNon-oil Excess Revenue \n0.40 \n106.16 \n0.00 \n52.44 \nExchange Gain \n8.98 \n0.00 \n0.00 \n0.00 \nTotal Distributed Balance \n2,140.78 \n2,042.97 \n2,429.63 \n3,601.48 \n Federal Government \n889.09 \n753.75 \n988.10 \n1,527.27 \n Statutory \n821.53 \n668.33 \n900.16 \n1,442.44 \n VAT \n67.57 \n85.42 \n87.94 \n84.83 \n State Government \n772.78 \n800.24 \n884.34 \n1296.95 \n Statutory \n416.69 \n380.22 \n456.59 \n753.86 \n VAT \n225.22 \n284.72 \n293.13 \n282.76 \n 13% Derivation \n130.87 \n135.30 \n134.62 \n260.33 \n Local Government \n478.90 \n488.98 \n557.19 \n777.26 \n Statutory \n321.25 \n289.68 \n352.00 \n579.33 \n VAT \n157.65 \n199.30 \n205.19 \n197.93 \nSource: OAGF and CBN Staff Estimates \n Note: * 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 \n24 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n3.1 per cent, respectively. Although returns from customs and excise \nduties at N463.97 billion, exceeded collections in 2022Q2 by 14.9 per \ncent, it was marginally (0.1 per cent) below the benchmark. The \nsustained improvement in non-oil revenue contribution to total \ngovernment revenue, reflected the meticulous implementation of the \nFinance Acts 2019, 2020 and 2021; under the Strategic Revenue \nGrowth Initiatives (SRGIs) of the Federal Government. \nA net distributable balance of N2,429.63 billion was disbursed to the \nthree tiers of government, after accounting for statutory deductions \nand transfers, as well as additional revenue from excess crude. Of this \namount, the Federal Government got N988.10 billion, while State and \nLocal governments received N749.72 billion and N557.19 billion, \nrespectively. The balance of N134.62 billion was distributed to oil-\nproducing states as 13.0 per cent Derivation Fund. Although total \ndisbursement to the federating units was 18.9 per cent higher than the \nsharing in the preceding quarter, it was 32.5 per cent below projection. \n \n2.2.2 Fiscal Operations of the Federal Government \nThe retained revenue of the FGN improved, due, largely, to increased \nallocation from the Federation Account. At N1,227.33 billion, estimated \nretained revenue of the FGN was above the receipts in the preceding \nquarter by 16.6 per cent, but remained below the target by 54.3 per \ncent, reflecting shortfalls in oil receipts (Table 5). \n \nTable 5: FGN Retained Revenue (N Billion) \n \n \n \n2021Q3 \n2022Q2 \n2022Q3 \nBudget \nFGN Retained Revenue \n \n \n1,114.21 \n1,052.42 \n1,227.33 \n2,685.20 \nFederation Account \n \n \n817.06 \n649.05 \n889.64 \n1,434.57 \nVAT Pool Account \n \n \n67.57 \n85.42 \n87.94 \n84.83 \nFGN IR \n \n \n225.12 \n258.04 \n239.23 \n554.05 \nExcess Oil Revenue \n \n \n0.00 \n0.00 \n10.52 \n0.00 \nExcess Non-Oil \n \n \n0.21 \n19.27 \n0.00 \n0.00 \nExchange Gain \n \n \n4.25 \n0.00 \n0.00 \n0.00 \nOthers* \n \n \n0.00 \n40.64 \n0.00 \n611.75 \nSource: Compiled from OAGF figures \nNote: * Others include revenue from Special Accounts, Special Levies and share of dividend. \nThe Budget figures are provisional, IR = Independent Revenue \n \nFederal Government \nRetained Revenue \n \n25 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nDriven by a reduction in recurrent spending, the provisional aggregate \nexpenditure of the FGN fell by 36.2 per cent and 43.5 per cent, relative to \n2022Q2 and the quarterly budget, respectively. Provisional aggregate \nexpenditure of the FGN amounted to N2,419.31 billion in the review \nperiod. A breakdown shows that recurrent expenditure, capital \nexpenditure, and transfers accounted for 73.8 per cent, 17.2 per cent \nand 9.0 per cent of total expenditure, respectively, (Figure 13). \n Figure 17: Federal Government Expenditure (N Billion) \n \nSource: CBN Staff Estimates and compilation from OAGF data \n \n \nThe disproportionate decline in FGN expenditure, relative to revenue, \nresulted in a contraction in the fiscal deficit. At N1,191.98 billion, the \nprovisional fiscal deficits of the FGN was 56.5 per cent and 25.3 per cent \nbelow the level in the preceding period and the quarterly budget, \nrespectively. The observed narrower deficit is indicative of subsisting \nfiscal constraints (Table 6). \n0\n1,000\n2,000\n3,000\n4,000\n5,000\n2021Q3\n2022Q2\n2022Q3\nBudget\nAggregate expenditure\n Recurrent\n Capital\n Transfers\nTable 6: Fiscal Balance (N Billion) \n \n2021Q3 \n2022Q2 \n2022Q3 \nBudget \nRetained revenue \n1,326.16 \n1,052.42 \n1,227.33 \n2,492.30 \nAggregate expenditure \n3,242.36 \n2,454.14 \n2,419.31 \n4,329.85 \n Recurrent \n2,505.22 \n1,882.87 \n1,785.72 \n2,674.35 \n Non-debt \n1,055.70 \n1,238.68 \n1,246.02 \n1,418.52 \n Debt Service \n1,403.09 \n792.92 \n701.02 \n921.35 \n Capital \n613.00 \n498.80 \n416.17 \n1,366.85 \n Transfers \n124.13 \n72.47 \n217.42 \n288.65 \nPrimary balance \n-513.10 \n-608.79 \n-490.96 \n-916.21 \nOverall balance \n-1,916.19 \n-1,401.72 \n-1,191.98 \n-1,837.55 \nSource: Compiled from OAGF figures and CBN Staff Estimates \nNote: The figures are provisional. \nOverall Fiscal Balance \nFederal Government \nExpenditure \n \n26 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n \nGovernment borrowing, in the review period, was anchored on the \nMedium-term Debt Strategy 2020-2023 (MTDS 2020- 2023) of the FGN. \nTotal public debt outstanding at N42,845.88 billion (or 23.4 per cent of \nGDP) at end-June 2022, increased by 3.0 per cent and 20.8 per cent, \nrelative to end-March 2022 and end-June 2021; but remained within \nthe 40.0 per cent threshold. Domestic debt accounted for 61.2 per cent \nof total debt, while external debt constituted 38.8 per cent. Of the \nconsolidated public debt outstanding. FGN (including State \ngovernments’ external debt, which are contingent liabilities of the \nFGN’s) accounted for N37,564.60 billion (87.7 per cent), while State \ngovernments’ domestic debt stock made up the balance of N5,281.28 \nbillion (12.3 per cent). \nOf the total FGN debt, domestic debt stood at N20,948.94 billion (55.8 \nper cent of total debt), while external debt amounted to N16,615.66 \nbillion (44.2 per cent of total debt). Further analysis shows that, FGN \nbond issues maintained its dominance, accounting for 72.5 per cent of \nthe total domestic debt, while Treasury Bills (21.5 per cent), FGN Sukuk \n(2.9 per cent), Promissory Notes (2.5 per cent), and others4 (0.6 per \ncent) constituted the balance. With regard to holdings of external debt, \nMultilateral, Commercial and Bilateral loans accounted for 47.8 per \ncent, 39.0 per cent and 11.7 per cent, respectively, while ‘other’ loans \nconstituted 1.5 per cent. \nDebt service obligations in 2022Q2, amounted to N912.71 billion, \ncompared with N897.17 billion in 2022Q1. The rise was attributed to \nprincipal repayments and redemption of matured debt obligations. \n \n Figure 18: FGN External and Domestic Debt Composition (N Billion) \n \n \n4 This includes Treasury bonds (0.4 per cent), Green bond (0.1 per cent) and Special \nFGN Savings bond (0.1 per cent). \n 28,000.0\n 30,000.0\n 32,000.0\n 34,000.0\n 36,000.0\n 38,000.0\n 40,000.0\n -\n 5,000.0\n 10,000.0\n 15,000.0\n 20,000.0\n 25,000.0\n2021 Q2\n2021 Q3\n2021 Q4\n2022 Q1\n2022 Q2\nExternal Debt\nDomestic Debt\nTotal Debt\nFederal Government \nDebt \n \n27 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nSource: Compiled from DMO Figures \n \n Figure 19: Composition of Domestic Debt Stock by Instrument \n \nSource: Compiled from DMO figures \n \n Figure 20: Composition of External Debt Stock by Instrument \n \nSource: Compiled from DMO figures \n \n \n \n \n \n \n \n \n \n \nFGN Bonds\n72.5%\nT/Bills\n21.5%\nFGN Sukuk\n2.9%\nPromissory \nnotes\n2.5%\nOthers\n0.6%\nMultilateral\n47.8%\nCommercial\n39.0%\nBilateral\n11.7%\nOthers\n1.5%\n \n28 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n2.3 \nMONETARY AND FINANCIAL SECTOR \nThe financial system remained safe, and sound as financial soundness \nindicators were within the regulatory benchmarks. To moderate the \ngrowth of money supply and help rein in inflation, the Bank maintained \na tight monetary policy stance that affected discretionary liquidity in the \nbanking system. On the Nigerian Exchange (NGX) Limited, activities \nwere bearish, a reflection of portfolio switching. \n \n2.3.1 Monetary Developments \nReserve money increased in 2022Q3, owing to the improved confidence \nin the banking system. At N15,007.59 billion, reserve money grew by 8.3 \nper cent over the level at end-December 2021. The growth was mainly \naccounted for by 18.1 per cent increase in liabilities to Other Depository \nCorporations (ODCs), while currency-in-circulation (CIC) declined by 2.9 \nper cent in the review period (Table 7). \n Table 7: Components of Reserve Money (N Billion) \n \n2021Q3 \n 2021Q4 \n 2022Q1 \n 2022Q2 \n2022Q3 \nMonetary Base \n12,905.94 \n13,295.15 \n14,301.77 \n13,860.27 \n15,007.59 \nCurrency-in-\nCirculation \nNaira and coins \neNaira \n \n \n2,837.06 \n2,837.06 \n- \n \n3,325.16 \n3,324.22 \n0.94 \n \n \n \n3,245.60 \n3,244.60 \n1.00 \n \n3,255.56 \n3,254.20 \n1.36 \n \n3,228.75 \n3,227.27 \n1.48 \nLiabilities to ODCs \n10,068.88 \n9,969.99 \n11,056.17 \n10,604.70 \n11,778.84 \nMoney Multiplier \n(M3) \n3.13 \n3.34 \n3.19 \n3.53 \n3.29 \n Source: Central Bank of Nigeria \n \nThe money multiplier at 3.3 in the period, amplified the reserve money \nto yield an expansion in broad money supply (M3). Consequently, broad \nmoney supply at N49,333.08 billion, grew by 11.00 per cent over level \nat end-December 2021. The annualised growth of 14.67 per cent was \nwell within the programme target of 14.92 per cent. \nOn the assets side, growth in broad money (M3) was due to the increase \nin Net Domestic Assets (NDA), which compensated for the contraction in \nNet Foreign Assets (NFA). Net Domestic Assets (NDA), grew by 27.8 per \ncent, attributed to the 29.9 per cent growth in domestic claims. The \nupward movement in domestic claims was hinged on the 64.9 and 16.0 \nper cent rise in net claims on central government and claims on other \nsectors, respectively. The growth in net claims on central government, \nwhich contributed 20.2 percentage points to the growth in M3, was due \nReserve Money \nBroad Money \nSummary \n \n29 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nto the increase in loans, while the rise in claims on other sectors \nresulted, largely, from the 16.8 per cent increase in claims on the \nprivate sector, which contributed 9.0 percentage points to the growth \nin M3. Conversely, the Net Foreign Assets (NFA) of depository \ncorporations declined by 52.0 per cent, due to the rise in liabilities to \nnon-residents, occasioned by increased foreign credit lines and \ndeposits. \n Table 8: Money and Credit Growth over preceding December (%) \nSource: Central Bank of Nigeria \n \n \nContribution \nto M3 growth \n(Sep-22) \nSep-21 \nJun-22 \nSep-22 \n \nAnnualise\nd rate \n2022 \nBenchmark \nNet Foreign Assets \n-10.95 \n-35.28 \n-34.73 \n-52.04 \n-69.39 \n- \nClaims on Non-\nresidents \n0.77 \n7.86 \n0.63 \n1.64 \n2.19 \n- \nLiabilities to Non-\nresidents \n11.72 \n \n43.69 \n29.55 \n45.54 \n60.72 \n- \nNet Domestic Assets \n21.95 \n20.36 \n21.93 \n27.80 \n37.07 \n- \nDomestic Claims \n32.81 \n13.43 \n17.88 \n29.90 \n39.87 \n16.23 \nNet Claims on Central \nGovernment \n20.22 \n13.16 \n31.61 \n64.93 \n86.57 \n12.26 \nClaims on Central \nGovernment \n21.84 \n20.88 \n22.61 \n39.62 \n52.83 \n- \nLiabilities to Central \nGovernment \n1.62 \n31.33 \n13.23 \n6.76 \n9.01 \n- \nClaims on Other \nSectors \n12.59 \n13.54 \n12.44 \n16.02 \n21.36 \n17.73 \nClaims on Other \nFinancial \nCorporations \n \n1.38 \n \n-3.37 \n2.91 \n7.76 \n10.35 \n- \nClaims on State and \nLocal Government \n1.64 \n11.70 \n29.85 \n29.28 \n39.04 \n- \nClaims on Public \nNonfinancial \nCorporations \n0.62 \n50.21 \n42.37 \n34.27 \n45.69 \n- \nClaims on Private \nSector \n8.95 \n19.75 \n12.77 \n16.76 \n22.34 \n- \nTotal Monetary \nAssets (M3) \n11.00 \n3.97 \n10.02 \n11.00 \n14.67 \n14.92 \nCurrency Outside \nDepository \nCorporations \n-0.47 \n-4.97 \n-7.46 \n-7.10 \n-9.46 \n- \nTransferable Deposits \n7.52 \n1.85 \n16.61 \n22.16 \n29.55 \n- \nNarrow Money (M1) \n7.05 \n0.78 \n12.69 \n17.35 \n23.20 \n- \nOther Deposits \n3.93 \n11.36 \n8.19 \n6.62 \n8.83 \n- \nBroad Money (M2) \n11.00 \n6.93 \n10.02 \n10.97 \n14.67 \n \nSecurities Other than \nShares \n0.00 \n-99.91 \n100.00 \n100.00 \n133.33 \n \nTotal Monetary \nLiabilities (M3) \n11.00 \n3.97 \n10.02 \n \n11.00 \n \n \n14.67 \n \n14.92 \n \n30 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nFrom the liability side, transferable deposits and other deposits grew \nby 22.2 per cent and 6.6 per cent, respectively, and accounted for the \ngrowth in total monetary liabilities. In terms of proportional \ncontribution, other deposits were 3.9 percentage points of total \nmonetary liabilities, while transferable deposits were 7.5 percentage \npoints. Currency outside depository corporations declined by 7.1 per \ncent, with a negative contribution of 0.5 percentage points to the \ngrowth in total monetary liabilities. The fall in currency outside \ndepository corporations, reflected the increased adoption of electronic \nmeans of payment in the economy. \n \n2.3.2 Credit Utilisation \nSustained efforts to boost productivity and output in the real economy \nspurred growth in sectoral credit in the review quarter. Total credit \nutilisation by sectors of the economy grew by 5.1 per cent to \nN28,204.27 billion in 2022Q3 from N26,846.40 billion in 2022Q2. A \nbreakdown shows that credit to the Agriculture, Industry, and Services \nsectors increased to N1,658.04 billion, N11,478.45 billion and \nN15,067.79 billion, from N1,630.38 billion, N10,591.87 billion and \nN14,624.15 billion, respectively, in the preceding quarter. An analysis \nof the relative share of the sectors in total credit utilization revealed \nthat the shares of services and industry sectors stood at 53.4 per cent \nand 40.7 per cent, respectively, while agriculture accounted for the \nbalance of 5.9 per cent (Table 9). \n Table 9: Relative Share in Total Sectoral Credit (Per cent) \n \n2021Q3 \n2022Q2 \n2022Q3 \nAgriculture \n5.27 \n6.07 \n5.88 \nIndustry \n42.36 \n39.46 \n40.70 \nOf which; Construction \n5.00 \n4.39 \n4.15 \nServices \n52.37 \n54.47 \n53.42 \nOf which; Trade/General \nCommerce \n 6.29 \n \n7.13 \n \n7.12 \n \n Source: Central Bank of Nigeria \n \nThe volume of consumer credit extended by Other Depository \nCorporations (ODCs) grew in 2022Q3. Consumer credit outstanding rose \nby 24.3 per cent to ₦2,402.67 billion at end-September 2022, from \n₦1,933.18 billion at the end of the second quarter. The share of \nconsumer credit in total private sector credit grew by 1.5 percentage \npoints to 8.7 per cent, from 7.2 per cent in the preceding quarter \n(Figure 21). \nConsumer Credit \nSectoral \nUtilisation of \nCredit \n \n31 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n \nFigure 21: Consumer Credit Outstanding \n \n Source: Central Bank of Nigeria \n \nAnalysis of consumer loans revealed a net increase of 3.5 percentage \npoints in personal loans, relative to the level in the preceding quarter, \nwhile retail loans fell by the same proportion. Personal loans \nmaintained its dominance, accounting for 76.9 per cent of total loans, \nwhile retail loans accounted for the remaining share of 23.1 per cent \n(Figure 22). \n Figure 22: Composition of Consumer Credit \n \n Source: Central Bank of Nigeria \n \n \n0\n1\n2\n3\n4\n5\n6\n7\n8\n9\n10\n -\n 500,000\n 1,000,000\n 1,500,000\n 2,000,000\n 2,500,000\n 3,000,000\n2021Q3\n2021Q4\n2022Q1\n2022Q2\n2022Q3\nPer cent (%)\nN'Million\nConsumer Credit (LHS)\nConsumer Credit as a Share of Private Sector Credit (RHS)\n -\n 10\n 20\n 30\n 40\n 50\n 60\n 70\n 80\n2021Q3\n2021Q4\n2022Q1\n2022Q2\n2022Q3\nPersonal\n75.69\n74.87\n78.05\n73.49\n76.94\nRetail\n24.31\n25.13\n21.95\n26.51\n23.06\nPer cent \n \n32 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n \n2.3.3 Money Market Developments \nLiquidity in the banking system marginally declined in the review period. \nPrimary market sales of securities (₦1,960.98 billion) and OMO \nauctions (₦70.00 billion) culminated in a withdrawal of ₦2,030.98 \nbillion from the banking system, which outweighed the injection of \n₦1,502.92 billion in matured securities. This resulted in a net \nwithdrawal from the banking system by N528.06 billion. Consequently, \nthe average banking system liquidity declined by 1.8 per cent to \n₦183.43 billion from ₦186.77 billion in the preceding quarter. \nThere were OMO auctions with maturities of 103 to 362 days in the \nreview quarter. Total amount offered, subscribed, and allotted, \ndeclined to ₦120.00 billion, ₦327.87 billion, and ₦70.00 billion, \nrespectively, from ₦140.00 billion, ₦983.59 billion, and ₦140.00 billion \nin the preceding quarter (Figure 23). \n Figure 23: Open Market Operation (N Billion) \n \nSource: Central Bank of Nigeria \n \nActivities in the standing facility window slowed in 2022Q3. The total \nrequest for SLF moderated by 4.7 per cent to ₦3,448.78 billion, with a \ndaily average of ₦57.48 billion, compared with ₦3,619.12 billion and a \ndaily average of ₦77.00 billion in the preceding quarter. The \ntransactions at the Standing Deposit Facility (SDF) window showed \nsimilar trend, with a decline of 40.0 per cent to ₦536.50 billion from \n₦894.88 billion in the preceding quarter, reflecting the liquidity \ncondition in the banking system. \n \n \n0\n100\n200\n300\n400\n500\n600\n700\n800\n900\n1000\nOffer\nSubscription\nAllotment\nRepayment\n2021Q3 (N'Billion)\n220.00\n718.02\n213.21\n735.34\n2022Q2 (N'Billion)\n140.00\n983.59\n140.00\n215.01\n2022Q3 (N'Billion)\n120.00\n327.87\n70.00\n259.00\nN' Billion\nStanding Facility \nWindows \nLiquidity \nManagement \nOpen Market \nOperations \n \n33 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nInvestments in the Nigerian Treasury Bills (NTBs) and FGN Bond slowed \nin the review quarter Despite the increase in stop rate to 7.38 per cent \n(±4.63), from 4.09 per cent (±2.35) in the preceding quarter, total \nsubscriptions in NTBs declined by 25.0 per cent to ₦1,494.33 billion \nfrom ₦1,992.80 billion in the preceding quarter, reflecting the tight \nliquidity condition. Analysis of subscriptions shows investors’ \npreference for the 364-day tenored instruments, which accounted for \n₦1,434.74 billion or 96.0 per cent of total in 2022Q3. The preference is \nunderpinned by market expectations of a lower future inflation. \n \n Figure 24: Primary Market NTBs, 2022Q3 (N Billion) \n \nSource: Central Bank of Nigeria \n \nSimilarly, subscriptions for the FGN Bonds dipped in 2022Q3 by 58.6 \nper cent to N635.82 billion from N1,537.40 billion in the preceding \nquarter (Figure 24). \nKey short-term interest rates trended in tandem with constrained \nliquidity conditions in the market. Average inter-bank call and Open-\nBuy-Back rates were 14.0 per cent and 12.9 per cent respectively, \ncompared with 9.4 per cent and 9.3 per cent in the preceding quarter. \nSimilarly, other rates such as the 30-day and 90-day NIBOR trended \nupward, at averages of 11.5 per cent and 11.7 per cent compared with \n8.7 per cent and 9.6 per cent, respectively, (Figure 25). \n \n \n \n \n \n \n0\n500\n1,000\n1,500\n2,000\n2,500\n3,000\n2021Q3 (N'Billion)\n2022Q2 (N'Billion)\n2022Q3 (N'Billion)\nOffer\n1,021.98\n918.92\n1,369.37\nSubsription\n2,807.29\n1,992.80\n1,494.33\nAllotment\n1,390.01\n1,015.56\n1,133.47\nRepayment\n1,021.98\n918.92\n1,369.37\nN' Billion\nPrimary Market \nInterest Rate \nDevelopment \n \n34 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n Figure 25: Developments in Short-term Interest Rates \nSource: Central Bank of Nigeria \nSimilarly, the average prime and maximum lending rates increased \nmarginally by 0.2 and 0.4 percentage points to 12.2 per cent and 28.0 \nper cent, respectively. Likewise, the average term-deposit rate \nincreased by 1.8 percentage points to 5.2 per cent, from 3.4 per cent, \nleading to narrowing of the spread between the average term deposit \nand maximum lending rates to 22.8 percentage points from 24.2 \npercentage points in the preceding quarter. The narrowing of the \nspread reflected improved efficiency in financial intermediation (Figure \n26). \n Figure 26: Trend in Average Deposit and Lending Rates \n \nSource: Central Bank of Nigeria; Note: PLR = Prime lending rate, MXLR = Maximum \nlending rate, AVTD = Average term deposit rate, SPRD = Spread between AVTD and \nMXLR \n \n \n2021Q3\n(%)\n2021Q4\n(%)\n2022Q1\n(%)\n2022Q2\n(%)\n2022Q3\n(%)\nInterbank Call rate\n12.96\n12.36\n11.33\n9.40\n14.00\nOBB\n11.89\n11.96\n7.05\n9.31\n12.90\nNIBOR 30-day\n11.63\n10.24\n8.77\n8.74\n15.50\nNIBOR 90-day\n12.70\n11.13\n10.15\n9.61\n11.71\nMPR\n11.50\n11.50\n11.50\n13.00\n15.50\n0\n2\n4\n6\n8\n10\n12\n14\n16\n18\nPer cent (%)\n22\n22\n23\n23\n24\n24\n25\n25\n26\n0\n5\n10\n15\n20\n25\n30\n2021Q3\n2021Q4\n2022Q1\n2022Q2\n2022Q3\nPercentage Points\nPer cent (%)\nPLR\nMXLR\nAVTD\nSPRD (RHS)\n \n35 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n2.3.4 \nCapital Market Developments \nActivities on the Nigerian Exchange (NGX) Limited were bearish in the \nreview period, occasioned by portfolio switching. The aggregate market \ncapitalisation decreased by 1.3 per cent to N49,533.09 billion from \nN50,172.09 billion in 2022Q2. A disaggregation of the components \nindicates that equities and Exchange Traded Funds (ETF) shed 5.3 per \ncent and 8.2 per cent, to N26,451.40 billion and N6.84 billion, \nrespectively. The debt market capitalisation, however, rose by 3.8 per \ncent to N23,074.85 billion. The equities, debt and ETF components of \nthe market capitalisation constituted 55.4 per cent, 46.6 per cent and \n0.01 per cent, respectively (Figure 27). \n \nThe All-Share Index (ASI), which opened at 51,829.67 index points at \nthe beginning of the review quarter, closed at 49,024.16 index points, \na decline of 5.4 per cent. The fall in the NGX-ASI was occasioned by \nflight to profit as investors moved away from stocks to more profitable \nfixed income investments. \n \n Figure 27: Aggregate Market Capitalisation and All-Share Index \n \n Source: Nigeria Exchange (NGX) Limited \n \n \nIn the review quarter, one (1) sectoral index trended upward, sixteen \n(16) indices trended downward while one (1) remained flat relative to \ntheir levels in the preceding quarter, underpinning the bearishness of \nthe market. \n \n \n \n \n \n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\n0\n10,000\n20,000\n30,000\n40,000\n50,000\n60,000\nQ3-20\nQ4-20\nQ1-21\nQ2-21\nQ3-21\nQ4-21\nQ1-22\nQ2-22\nQ3-22\nIndex Points\nN billion\nAggregate Market Capitalisation (LHS)\nAll Share Index (RHS)\nMarket \nCapitalisation \nNGX All Share \nIndex \n \n36 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n \n Table 10: Nigeria Exchange (NGX) Limited Sectorial Indices \nNGX Indices \n2022Q2 \n2022Q3 \nChanges (%) \nNGX-Growth \n1,487.20 \n1,659.11 \n11.6 \nNGX-Asem \n658.99 \n658.99 \n0 \nNGX-Main Board \n2,274.79 \n2,251.59 \n-1 \nNGX-Sovereign Bond \n854.22 \n837.85 \n-1.9 \nNGX-Banking \n397.79 \n379.2 \n-4.7 \nNGX-MERI Value \n2,167.09 \n2,061.42 \n-4.9 \nNGX-Insurance \n178.33 \n168.6 \n-5.5 \nNGX-Consumer Goods \n623.99 \n584.68 \n-6.3 \nNGX-LOTUSISLM \n3,251.25 \n3,039.72 \n-6.5 \nNGX-Oil & Gas \n545.34 \n508.26 \n-6.8 \nNGX-30 \n1,887.62 \n1,746.95 \n-7.5 \nNGX-Afri Div yield \n3,191.06 \n2,911.40 \n-8.8 \nNGX-Pension \n1,823.58 \n1,659.38 \n-9 \nNGX-Afri Bank Value \n925.95 \n837.4 \n-9.6 \nNGX-MERI Growth \n2,364.94 \n2,135.97 \n-9.7 \nNGX-Premium \n4,924.13 \n4,438.40 \n-9.9 \nNGX-CG \n1,319.70 \n1,177.21 \n-10.8 \nNGX-Industrial Goods \n2,152.24 \n1,773.22 \n-17.6 \nSource: Nigeria Exchange (NGX) Limited \n \nThe total turnover, volume, and value, of traded securities on the \nExchange fell by 77.3 per cent and 68.1 per cent, to 12.30 billion shares \nand N154.67 billion, respectively, in 246,966 deals, from 54.27 billion \nshares, valued at N485.41 billion, in 320,759 deals, at the end of \n2022Q2 (Figure 28). \n \n Figure 28: Volume and Value of Traded Securities \n Source: Nigeria Exchange (NGX) Limited. \n \n \n0.00\n100.00\n200.00\n300.00\n400.00\n500.00\n600.00\n0.00\n10.00\n20.00\n30.00\n40.00\n50.00\n60.00\nQ3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22\nN Billion\nBillion\nVolume of traded securities (LHS)\nValue of traded securities (RHS)\n \n37 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nThere were twelve (12) new listings and 4 supplementary listings on the \nExchange, comprising 7 bonds, 3 script dividends, 2 ordinary shares \nplacement, 2 rights issue, 1 derivative and 1 Zero Coupon Unsecured \nSubordinated Irredeemable Convertible (Table 11). \n \n Table 11: Listings on the Nigerian Exchange Limited in 2022Q3 \nCompany/ Security \nShares Units \nRemarks \nListing \nDangote Cement PLC \n11.85% APR 2027 \nTranche A 4,269,000 \nunits of N4,269,000,000 5 \nYear Bonds \nSenior unsecured \nBonds \nNew \nDangote Cement PLC \n12.35% APR 2029 \nTranche B 23,335,000 \nunits of N23,335,000,000 \n7 Year Bonds \nSenior unsecured \nBonds \nNew \nDangote Cement PLC \n13% APR 2032 \n Tranche C 88,396,000 \nunits of N88,396,000,000 \n10 Year Bonds \nSenior unsecured \nBonds \nNew \n8.375% FGN MAR \n2029 \n1,250,000 units of \n$1,250,000,000.00 USD \nSeries 12 Euro \nBond \nNew \nFGN Roads Sukuk \nCompany 1 Plc \n250 million units of N250 \nBillion 13% Ijarah \nSovereign Sukuk 10year \nBond \nUnsecured Bonds \nNew \nNigerian Breweries \nPLC \n145,074,002 ordinary \nshares of 50k each \nScrip Dividend \nSuppl. \nLagos Free Zone \nCompany 13.25% \nLFZC GTEED SEP \n2042 \nTranche A of 25,000,000 \nunits of \nN25,000,000,000.00 20 \nYear Bonds \nSenior \nguaranteed \ninfrastructure \nBonds \nNew \nCapital Hotels Plc \n1,611,995,510 units of 50 \nKobo per share \nOrdinary shares \n(Private \nplacement) \nNew \nNeimeth \nInternational \nPharmaceuticals Plc \n2,373,947,500 units of \nN1.55 at 5 for every 4 \nshares \nOrdinary shares \nNew \nUAC of Nigeria \nadditional 44,835,076 \nordinary shares of \nScrip Dividend \nElection \nSuppl. \n50 kobo each \nScheme \nABC Transport Plc \n900,000 unit at N1,000 at \npar value \nSenior Secured \nFixed Rate Bonds \nNew \nABC Transport Plc \n734,921,774 ordinary \nshares of 50 Kobo each \nRights Issue \nSuppl. \nNGX30H3 and \nNGXPENSIONH3 \n \nDerivative \nNew \nChemical and Allied \nProducts Plc \n26,487,980 ordinary \nshares of \nCAP’s Scrip \nDividend Election \nScheme \nSuppl. \n50 kobo each \nMcNichols \nConsolidated Plc \n531,242,609 ordinary \nshares of 50 kobo each at \n50 kobo per share \nProposed Rights \nIssue \nNew \nTranzact \nInternational Plc \n2,565,433,333 ordinary \nshares of 50 Kobo each \nZero Coupon \nUnsecured \nSubordinated \nIrredeemable \nConvertible \nDebenture Stock \nto \nNew \nEquity \nSource: Nigeria Exchange (NGX) Limited \n \n \n38 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n2.3.5 Financial Soundness Indicators \nThe banking industry remained safe and sound, as key financial \nsoundness indicators were within regulatory benchmarks. The industry \nCapital Adequacy Ratio (CAR) at 13.8 per cent, remained above the 10.0 \nper cent threshold for banks with national/regional authorisation. \nHowever, compared to 14.1 per cent in the preceding quarter, the CAR \ndeclined marginally by 0.3 percentage point, attributed to the increase \nin risk-weighted assets of banks. \nSimilarly, at 4.9 per cent, the banks’ asset quality, measured by the ratio \nof non-performing loan (NPL), improved by 0.1 percentage point below \nthe 5.0 per cent prudential benchmark and the level in the preceding \nquarter. This was driven by sustained loan recoveries and policy \nsupport by the Bank. \nThe Industry Liquidity Ratio (LR) increased by 2.5 percentage points to \n56.7 per cent, compared with 54.2 per cent in the preceding quarter, \nshowing an increase in the stock of liquid assets held by banks. The LR \nwas above the regulatory benchmark of 30.0 per cent. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n2.4 EXTERNAL SECTOR DEVELOPMENTS \n2.4.1. External Balance \nDespite the prevailing global economic conditions which weighed on the \nexternal sector performance, the current account maintained a surplus \nposition of US$1.89 billion. However, the financial account recorded a \nlower net incurrence of financial liabilities of US$2.07 billion, reflecting \nthe impact of monetary tightening across major advanced economies. \nThe external reserves at end-September 2022 stood at US$37.51 billion, \ncompared with US$39.16 billion at end-June 2022. The level could \nfinance 9.9 months of imports of goods only, or 7.6 months of imports \nof goods and services, well above the international standard of 3 \nmonths import cover. The average exchange rate of the naira per US \ndollar at the I&E window, was ₦426.34/US$, compared with \n₦415.70/US$, in 2022Q2. \n2.4.2. Current and Capital Accounts Developments \nAlthough the current account recorded a surplus position in 2022Q3, it \nnarrowed compared to the position in the preceding quarter. The current \naccount surplus declined to US$1.89 billion (1.7 per cent of GDP), from \nUS$5.07 billion (4.7 per cent of GDP). The out-turn was due to \nsignificant decline in export earnings, and a wider primary income \naccount deficit, on account of higher repatriation of dividends and \nprofits (Figure 29). \n Figure 29: Current Account Balance (US$ Billion) \n Source: Central Bank of Nigeria \n \nThe performance of exports was adversely affected by developments in \nthe international markets and domestic constraints. Crude oil prices \ndeclined following softer global demand, and concerns about the \noutlook of global growth, as central banks continued to raise interest \nrates to contain inflation. Estimated export earnings decreased by 28.9 \nper cent to US$12.92 billion in 2022Q3, compared with US$18.18 billion \nSummary \nExport \nPerformance \n2.63\n5.07\n1.89\n0.00\n1.00\n2.00\n3.00\n4.00\n5.00\n6.00\nQ1 2022\nQ2 2022\nQ3 2022\nUS$ Billion\n \n40 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nin the preceding period. A breakdown shows that crude oil and gas \nexports decreased by 32.4 per cent to US$10.95 billion, relative to \nUS$16.21 billion in the preceding quarter. \n \nThe development was driven majorly by the reduction in Bonny Light \nprices and domestic oil production. The price of Bonny Light fell to \nUS$106.73 per barrel, from US$118.34, while production dropped to \n1.14mbpd, compared with 1.28mbpd in the preceding quarter. \nSimilarly, non-oil, including electricity export receipts decreased \nmarginally by 0.03 per cent to US$1.97 billion. In terms of share in total \nexports, crude oil and gas export receipts remained dominant, \naccounting for 84.8 per cent while non-oil exports accounted for the \nbalance. \n \nRising global inflation and the persisting supply chain disruptions \nsubdued merchandise imports in the review period. Provisional data \nrevealed that merchandise imports fell by 8.9 per cent to US$11.36 \nbillion in 2022Q3, relative to US$12.48 billion in the preceding quarter. \nThe development was observed, majorly, in the importation of non-oil \nproducts, which declined by 17.3 per cent to US$7.63 billion, from \nUS$9.22 billion. Conversely, import of petroleum products increased by \n14.6 per cent to US$3.73 billion, from US$3.26 billion. The increase in \npetroleum products import was to cover domestic supply shortages in \nthe period. The share of non-oil import remained dominant, accounting \nfor 67.2 per cent of the total, while petroleum products constituted the \nbalance of 32.9 per cent. \nA breakdown of non-oil import by sector revealed that import of raw \nmaterials and machinery for industrial use accounted for the largest \nshare of 50.3 per cent, reflecting inclination towards import \nsubstitution in the economy. Other sectoral import shares include \nmanufactured products (20.8 per cent); food products (13.2 per cent); \noil (7.3 per cent); transport (3.6 per cent); mineral (3.5 per cent); and \nagricultural products (1.2 per cent). \nThe deficit in the services account narrowed, mainly, because of the \ndecline in travels and transport during the review period. The deficit in \nthe services account narrowed by 28.2 per cent to US$2.58 billion, from \nUS$3.59 billion in the preceding quarter. The lower deficit was as a \nresult of 33.6 per cent and 27.9 per cent decline in transport and travel \nservices, respectively. A breakdown of the deficit indicates that \npayment for services amounted to US$3.37 billion, while receipts from \nservices was US$0.80 billion. Further analysis shows that payments for \nServices \nMerchandise \nImport \n \n41 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \ntransportation and travels stood at US$1.49 billion and US$0.75 billion, \nrespectively, accounting for 44.2 per cent and 22.1 per cent of the total. \nOther business services at US$0.67 billion, accounted for 20.0 per cent. \nPayments for insurance and pensions was US$0.13 billion, constituting \n3.9 per cent. Payments for telecommunications, government goods \nand services, financial services, and charges for the use of intellectual \nproperties were US$0.12 billion (3.5 per cent), US$0.08 billion (2.3 per \ncent), US$0.07 billion (2.2 per cent), US$0.06 billion (1.9 per cent) of \nthe total, respectively, (Figure 30). \n \nFigure 30: Share of Service Out-Payments (per cent) \n \n Source: Central Bank of Nigeria \nReceipts from services declined by 35.9 per cent to US$0.80 billion, \nfrom US$1.24 billion the in the preceding quarter. This was due mainly, \nto decline in receipts from transport, travels and financial services by \n64.5 per cent, 14.5 per cent and 42.4 per cent, respectively. In terms of \nshare in total, receipts from travels, transportation and financial \nservices stood at US$0.25 billion, US$0.17 billion and US$0.17 billion, \nand accounted for 31.4 per cent, 21.8 per cent and 21.7 per cent, \nrespectively. Government services, telecommunications, insurance & \npensions, and other businesses, at US$0.11 billion, US$0.06 billion, \nUS$0.02 billion and US$0.01 billion, represented 14.0 per cent, 7.8 per \ncent, 1.8 per cent and 1.4 per cent, respectively, (Figure 31). \nTransport\n44.2%\nTravel\n22.1%\nInsurance and \npension services\n3.9%\nGovernment services \n2.3%\nFinancial services\n2.2%\ncharges for the use of \nintellectual property \nn.i.e\n1.9%\nTelecommunications, \ncomputer, and \ninformation services\n3.5%\nOther business \nservices\n20.0%\n \n42 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nFigure 31: Share of Services Receipts (per cent) \n \nSource: Central Bank of Nigeria \n \nThe deficit in the primary income account widened as repatriation of \ndividends increased in the review period. The deficit in the primary \nincome account widened by 10.9 per cent to US$2.91 billion in 2022Q3, \ncompared with US$2.62 billion in the preceding quarter. This reflected \nhigher repatriation of dividends and profits, as well as increased \ninterest payments on loans. The surplus in the compensation of \nemployees sub-account decreased by 2.4 per cent to US$0.05 billion in \nthe review period, compared with the level in the preceding quarter \n(Figure 32). \n \n Figure 32: Primary Income Balance (US$ Billion) \n \n Source: Central Bank of Nigeria \n \nTransport\n21.8%\nTravel\n31.4%\nInsurance and pension \nservices\n1.8%\nGovernment services \n14.0%\nFinancial services\n21.7%\nTelecommunications, \ncomputer, and \ninformation services\n7.8%\nOther business \nservices\n1.4%\n-2.13\n-2.45\n-3.94\n-2.62\n-2.91\n2021Q3\n2021Q4\n2022Q1\n2022Q2\n2022Q3\nU$ BILLION\nPrimary Income \n \n43 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nThe gains from remittance policies positively influenced the secondary \nincome account, leading to a higher surplus position. The surplus in the \nsecondary income account increased to US$5.82 billion in the review \nperiod, compared with US$5.58 billion in the preceding quarter. The \ndevelopment was due to an increased inflow of remittances to US$5.06 \nbillion, from US$4.95 billion in the preceding quarter. Similarly, general \ngovernment transfers in the form of aids and grants rose by 7.3 per cent \nto US$0.78 billion, from US$0.72 billion in 2022Q2 (Figure 33). \n \nFigure 33: Secondary Income Balance and Remittances Inflow (US$ Billion) \n \nSource: Central Bank of Nigeria \n \n 2.4.3. Financial Account \nThe financial account recorded a lower net incurrence of financial \nliabilities, occasioned by tight financial conditions, as monetary \nauthorities continued to hike interest rates to rein in inflation. The \nfinancial account recorded a net incurrence of liabilities of US$2.07 \nbillion (1.9 per cent of GDP), relative to US$3.16 billion (2.8 per cent of \nGDP) in the preceding quarter. \nAn Inflow of US$2.86 billion was recorded in 2022Q3, relative to \nUS$4.05 billion in the preceding quarter. The decline was due largely, \nto lower purchase of equity & debt securities by non-resident investors, \nas monetary policy normalisation created safer havens for investors \nabroad. FDI recorded a lower divestment of US$0.96 billion, relative to \nUS$1.59 billion in the preceding quarter, reflecting a lower drawdown \nfrom reserves of companies. Conversely, portfolio investment inflow \ndecreased by 4.1 per cent to US$1.61 billion from US$1.68 billion in the \n5.61\n5.73\n5.65\n5.90\n5.58\n5.82\n4.93\n4.98\n5.03\n5.16\n4.95\n5.06\n2021Q2\n2021Q3\n2021Q4\n2022Q1\n2022Q2\n2022Q3\nSecondary Income Balance\nWorkers' Remittances\nSecondary Income \nFinancial Account \nDevelopments \nNet Incurrence of \nLiability \n \n44 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nprevious quarter. The decline was as a result of a 6.8 per cent decrease \nin investment in short-term debt securities by non-resident investors. \nSimilarly, inflow of “other investment” fell by 25.6 per cent to US$2.20 \nbillion, from US$2.96 billion in the preceding period. \nAggregate financial assets rose to US$2.21 billion in 2022Q3, compared \nwith US$0.89 billion in the preceding quarter, occasioned by the \nacquisition of other investment assets, particularly, increased holdings \nof foreign currency and deposits in foreign banks by the private sector. \nForeign direct investments recorded a lower disposal of US$0.12 billion, \nrelative to US$0.20 billion in the preceding quarter. On the other hand, \nportfolio investment assets recorded a lower acquisition of US$0.15 \nbillion, relative to US$0.38 billion, as a result of the lower purchase of \ndebt securities by resident investors. On the contrary, “Other \ninvestment” assets witnessed an acquisition of US$2.19 billion, \ncompared with the disposal of US$0.29 billion in the preceding quarter, \nowing to increase in foreign currency holdings by the private sector. \nFurthermore, reserve assets recorded a reduction of US$1.43 billion, \nrelative to US$0.89 billion in the preceding quarter, following the Bank’s \nsustained efforts to ensure liquidity in the foreign exchange market. \n2.4.4. External Debt \nNigeria's public external debt surged in the review period, owing to new \nborrowings. Nigeria’s public sector external debt stock and external \ndebt service payment at end-June 2022 stood at US$40.06 billion (9.2 \nper cent of GDP) and US$0.60 billion, respectively. A breakdown \nshowed that the multilateral loans, from the World Bank, International \nMonetary Fund, and African Development Bank Groups, amounted to \nUS$19.16 billion, accounting for 47.8 per cent of the total. A total of \nUS$15.62 billion or 40.0 per cent of the total was borrowed from \ncommercial sources in the form of Euro and Diaspora Bonds. Loans \nfrom bilateral sources was US$4.70 billion, or 11.7 per cent of the total, \nwhile promissory notes were US$0.59 billion, or 1.5 per cent of the total \ndebt stock. \n \nThe external debt service payment stood at US$0.60 billion at end-June \n2022, relative to US$0.69 billion in the preceding quarter. A breakdown \nshowed that the principal repayment was US$0.38 billion, accounting \nfor 55.1 per cent of the entire payment. Interest payment totalled \nUS$0.20 billion, or 29.0 per cent of the total, while other payments \nmade up the balance. An analysis of interest payments show that \ninterest payment on commercial borrowings accounted for 80.0 per \ncent of the total at US$0.16 billion, while multilateral institutions \nPublic Sector \nExternal Debt \nNet Acquisition of \nAsset \n \n45 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \naccounted for 10.0 per cent of the total or US$0.02 billion. Interest \npayments on bilateral loans accounted for the balance. \n \n2.4.5. International Investment Position (IIP) \nNigeria's International Investment Position (IIP) recorded a net financial \nliability of US$76.16 billion at end-September 2022. The stock of financial \nassets decreased by 2.2 per cent to US$105.93 billion at end-\nSeptember 2022, from US$108.34 billion at end-June 2022. This was \ndue, largely, to a 4.2 per cent reduction in external reserves assets, as \nthe Bank continued to stabilise the foreign exchange market. Portfolio \ninvestment assets increased by 4.4 per cent to US$3.46 billion. \nSimilarly, direct investment assets increased marginally, by 0.9 per cent \nto US$13.42 billion, driven by lower disposal of equity and direct \ninvestment fund shares by resident investors. Other investment assets \nalso increased by 4.4 per cent to US$51.54 billion in the review period, \nfrom US$49.35 billion in 2022Q2. \n \nThe stock of financial liabilities representing foreign investors' claims on \nthe economy decreased by 0.2 per cent to US$182.09 billion at end-\nSeptember 2022, from US$182.43 billion at end-June 2022. The \ndevelopment reflected an increase in the stock of direct investment, \nrelative to the level at end-June 2021. The stock of portfolio and other \ninvestment liabilities, however, increased by 4.3 per cent and 4.0 per \ncent, to US$38.64 billion and US$57.12 billion, respectively, from \nUS$37.03 billion and US$54.92 billion at end-June 2022. \n \n2.4.6. International Reserves \nThe international reserves remained above the standard benchmark of \n3.0 months of import cover. The international reserves stood at \nUS$37.39 billion at end-September 2022, relative to US$39.16 billion at \nend-June 2022. The level of external reserves could cover 6.5 months \nof import for goods and services or 9.0 months of import for goods only. \n \n \n \n \n \n \n \n46 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nFigure 34: External Reserves and Months of Import Cover \n \n Source: Central Bank of Nigeria \n \nA breakdown of the external reserves by ownership shows that, the \nshare of the CBN was US$35.67 billion (95.39 per cent); Federal \nGovernment, US$1.72 billion (4.61 per cent); while the Federation \naccounted for the balance of US$0.58 million (0.00 per cent). In terms \nof currency composition, the US dollar was US$28.73 billion, (76.8 per \ncent); Special Drawing Rights, US$4.81 billion (12.9 per cent); Chinese \nYuan, US$3.46 billion (9.2 per cent); GB Pounds, US$0.18 billion (0.5 per \ncent); Euro, US$0.21 billion (0.6 per cent); and other currencies \naccounted for the balance. \n \n2.4.7 Foreign Exchange Flows through the Economy \nThe economy recorded a net inflow of US$7.29 billion in 2022Q3, \ncompared with US$9.25 billion in the preceding quarter. Foreign \nexchange inflow into the economy decreased by 14.2 per cent to \nUS$17.22 billion, from US$20.08 billion in the preceding quarter. The \ndevelopment was driven by the 17.0 per cent and 12.1 per cent \ndecrease in inflow through the CBN and the autonomous sources, \nrespectively. Foreign exchange outflow through the economy \ndecreased by 8.3 per cent to US$9.93 billion, from US$10.83 billion in \n2022Q2. \nForeign exchange inflow through the Bank, at US$7.28 billion, fell below \nthe US$8.77 billion in the preceding quarter. A disaggregation shows \nthat receipts from crude oil related sources increased by 7.2 per cent \nto US$2.68 billion, relative to the value in 2022Q2. In contrast, receipts \n0\n2\n4\n6\n8\n10\n12\n14\n -\n 5\n 10\n 15\n 20\n 25\n 30\n 35\n 40\n 45\nJul-21\nAug-21\nSep-21\nOct-21\nNov-21\nDec-21\nJan-22\nFeb-22\nMar-22\nApr-22\nMay-22\nJun-22\nJul-22\nAug-22\nSep-22\nUS$ Billion\nExternal Reserves - LHS\nMonths of Import (Goods only)\nMonths of Import (Goods and Services)\nForeign Exchange \nFlows through the \nEconomy \n \n47 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nfrom non-oil sources fell to US$4.60 billion from US$6.27 billion in the \npreceding quarter. Foreign exchange inflow through autonomous \nsources also decreased to US$9.94 billion from US$11.31 billion in the \npreceding period, driven mainly, by decline in total Over-the-Counter \n(OTC) purchases. \nHowever, outflow through the Bank, at US$8.54 billion, increased by \n1.1 per cent, relative to US$8.45 billion in the preceding quarter, \nattributed, largely, to increase in external debt service and third-party \nMDA transfers. Autonomous outflow also fell by 41.6 per cent to \nUS$1.39 billion, on account of decreased invisible imports. \nConsequently, autonomous sources recorded a net inflow of US$8.55 \nbillion in the review period, compared with US$8.94 billion in 2022Q2. \nHowever, a net outflow of US$1.26 billion was recorded through the \nBank, compared to a net inflow of US$0.32 billion in the preceding \nquarter. Thus, resulting in a net inflow of US$7.29 billion into the \neconomy in 2022Q3. \nFigure 35: Foreign Exchange Transactions through the Economy 2022Q3 \n(US$ billion) \n \nSource: Central Bank of Nigeria \n \n2.4.8 Transactions in the Foreign Exchange Market \nTotal foreign exchange sales to authorised dealers by the Bank decreased \nin the review period. Foreign exchange sales at US$4.18 billion, \ndecreased by 13.1 per cent, below the level in the preceding quarter. A \ndisaggregation shows that, foreign exchange sales at the Secondary \nMarket Intervention Sales (SMIS) and Investors’ and Exporters’ (I & E) \nwindows, decreased by 10.5 per cent and 4.3 per cent to US$1.83 \nbillion and US$0.79 billion, respectively. Similarly, matured swap \ncontracts fell by 48.9 per cent to US$0.57 billion, relative to 2022Q2. \nQ3 2021\nQ2 2022\nQ3 2022\nInflow\n30.20\n20.08\n17.22\nOutflow\n10.22\n10.83\n9.93\nNetflow\n19.98\n9.25\n7.29\n -\n 5\n 10\n 15\n 20\n 25\n 30\n 35\nInflow\nOutflow\nNetflow\nSpot \nTransactions \n \n48 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nHowever, sales at the Small and Medium Enterprises (SMEs) and \ninterbank/invisibles windows increased by 32.4 per cent and 10.0 per \ncent to US$0.46 billion and US$0.53 billion, respectively, relative to the \nlevels in the preceding quarter. \n Figure 36: Foreign Exchange Sales to Authorised Dealers (US$ billion) \n \n Source: Central Bank of Nigeria \n \nThe average turnover at the I&E segment decreased by 25.0 per cent \nto US$0.11 billion, relative to the level in 2022Q2, reflecting liquidity \nconditions in the segment. \n Figure 37: Turnover in the I&E Foreign Exchange Market \nSource: Central Bank of Nigeria. \n \nThe average exchange rate of the naira per US dollar at the I&E \nwindow was ₦426.34/US$, compared with ₦415.70/US$ in 2022Q2. \n \n \n0\n2\n4\n6\n8\n10\n12\n14\n16\nQ3\n2019\nQ4\n2019\nQ1\n2020\nQ2\n2020\nQ3\n2020\nQ4\n2020\nQ1\n2021\nQ2\n2021\nQ3\n2021\nQ4\n2021\nQ1\n2022\nQ2\n2022\nQ3\n2022\nUS$Bn\n32.54\n104.09\n-46.81\n81.58 \n42.26 \n14.86 \n(35.81)\n16.38 \n(25.04)\n-60\n-40\n-20\n0\n20\n40\n60\n80\n100\n120\n -\n 20\n 40\n 60\n 80\n 100\n 120\n 140\n 160\n 180\n 200\nQ 3 \n2 0 2 0\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\nPercent\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 \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \n3.0 MACROECONOMIC OUTLOOK \n3.1 Global Economic Outlook \n The performance of the global economy is projected to slow in 2022, on \naccount of the economic uncertainty induced by the Russia-Ukraine war. \nThe revised projection by the IMF indicate that global growth would \nslow to 3.2 per cent in 2022 from 6.1 per cent in 2021, which is 0.4 \npercentage points lower than the initial estimate of 3.6 per cent in April. \nIn the Advanced Economies (AEs), growth is projected to slow from 5.2 \nper cent in 2021 to 2.5 per cent in 2022, while in Emerging Market and \nDeveloping Economies (EMDEs), it is projected to slow to 3.6 per cent \nfrom 6.8 per cent in 2021. The downward revision of the growth \nforecast was on account of the impact of the Russia-Ukraine war, which \nhas generated significant negative effects on the global economy. In \naddition, increased fiscal withdrawals, pandemic-induced supply chain \ndisruptions, and monetary tightening are other factors that could \nfurther slow output growth. Furthermore, China's growth deceleration, \ndue to the zero-COVID policy, is expected to dampen global growth \nprospects. \nGlobal inflation is expected to remain elevated in 2022, rising to 6.6 per \ncent in AEs, and 9.5 per cent in EMDEs. The IMF’s World Economic \nOutlook projection for July 2022 shows that persistent high inflation in \nthe near term is hinged on the surge in commodity and energy prices, \namid tight labour market conditions. While higher energy cost is \nexpected to be the main driver of inflation in AEs, rising food prices is \nexpected to play significant role in most EMDEs. \n3.2 \nDomestic Economic Outlook \nGrowth prospects for the domestic economy remains positive in the near-\nterm, amid downside risks. The positive outlook is predicated on \nrelatively high crude oil prices, effective implementation of the National \nDevelopment Plan 2021-2025, and the positive impact of CBN \ninterventions on growth-enhancing sectors, among others. However, \ncontraction in global demand, persistent security challenges and \ninfrastructural deficit, remain possible headwinds to growth. \nFurthermore, mounting value shortfall recovery in PMS and crude oil \nproduction bottlenecks, could weaken the fiscal space and constrain \ngovernment’s effort in ramping up capital investment to support \ngrowth. However, with the sustained momentum in non-oil revenue \nthrough continuous implementation of the Finance Act and other fiscal \nreform strategies of the FGN, coupled with the ongoing effort to clamp-\ndown on crude oil theft, fiscal conditions are likely to improve in the \nnear-term. \n \n50 | P a g e Central Bank of Nigeria Economic Report \nThird Quarter 2022 \nECONOMIC REPORT, THIRD QUARTER 2022 \nThis document is for CBN internal consumption \nInflationary pressures are expected to remain elevated in the near-term, \non account of rising energy and food prices. This outlook is hinged on \nincreased production cost, high energy prices, lag-effect of flooding, and \nsecurity challenges. Nevertheless, CBN’s monetary tightening as well as \nthe various supply-side interventions by the Bank and the FGN in \ngrowth-enhancing sectors of the economy, are expected to moderate \ninflation in the near-term. \nThe prospect for Nigeria’s external sector position is positive on the back \nof favourable crude oil prices and domestic production, following \nsignificant reduction in crude oil theft. However, rising import bills, hike \nin policy rates in most AEs and high external debt service, remain \npossible impediments to accretion to reserves.", "source": "CBN", "stratum": "cb_requests", "fetch_date": "2026-05-11", "url": "file:///CBN/Quarterly_Economic_Reports/THIRD QUARTER 2022 ECONOMIC REPORT (1).pdf"}
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