Monday April 23, 2012

Growth in the key monetary aggregate was moderate in January 2012. On month-on-month basis, broad money (M2) grew by 3.4 per cent at end-January 2012, compared with the growth of 8.9 per cent at end of the preceding month. The development was attributed largely to the 2.1 and 3.4 per cent increase in domestic credit (net) and foreign asset (net) of the banking system. On year-on-year basis, M2 grew marginally by 0.3 per cent, owing to the same reasons above. Narrow money (M1) rose marginally by 0.8 per cent, over the level at the end of the preceding month. Reserve money fell by 3.4 per cent from its level at end of the preceding month.

Available data indicated mixed developments in banks’ deposit and lending rates in January 2012. The spread between the weighted average term deposit rate and maximum lending rates narrowed to 16.82 in January 2012 from 17.41 in the preceding month. Similarly, the margin between the average savings deposit and maximum lending rates narrowed from 21.94 percentage points to 21.69 percentage points. The weighted average interbank call rate declined to 14.19 per cent from 15.5 per cent in the preceding month, reflecting the liquidity condition in the interbank funds market.

The value of money market assets outstanding at end– January 2011 declined by 0.1 per cent to N5,538.76 billion, in contrast to the rise of 7.9 per cent at end of the preceding month. The development was attributed to the 27.3 and 1.3 per cent decline in the value of Bankers Acceptances (BAs) and Commercial Paper (CP) holdings, respectively. Activities on the Nigerian Stock Exchange (NSE) in the fourth quarter of 2011 were mixed. Total federally-collected revenue in January 2012 was estimated at N1,008.37 billion, representing an increase of 11.7 and 37.8 per cent over the levels in the preceding month and the corresponding period of 2012, respectively.

At N802.71 billion, gross oil receipts, which constituted 79.6 per cent of the total revenue, was 10.6 and 38.4 per cent higher than the levels in the preceding month and corresponding period of 2011, respectively. The increase in oil receipts during the review month was attributed, largely, to the 18.7 and 22.7 per cent rise in receipts from domestic crude oil and gas sales and crude oil and gas export during the month under review. Non-oil receipts, at N205.66 billion or 20.4 per cent of the total revenue was 16.6 and 35.9 per cent higher than the receipts in the preceding month and the corresponding month of 2011, respectively.

The increase relative to the level in the preceding month reflected largely the increase in corporate tax, Federal Government independent revenue and customs special levies). Federal Government estimated retained revenue in January 2012 was N272.08 billion, while total estimated expenditure was N388.87 billion. Thus, the fiscal operations of the Federal Government resulted in an estimated deficit of N116.86 billion, compared with the deficit of N101.7 billion recorded in the corresponding period of 2011. The dominant agricultural activities in January 2012 were: cultivation of fruits, vegetables, rice and maize; and harvesting of tree crops as well as clearing of land for the 2012 cropping season. In the livestock sub-sector, farmers were engaged in re-stocking of broilers and layers to replenish those sold during the end of 2011 festive season.

Nigeria’s crude oil production, including condensates and natural gas liquids in January 2012 was estimated at average of 2.22 million barrels per day (mbd) or 68.82 million barrels in the month under review. Crude oil export was estimated at 1.77 mbd or 54.87 million barrels for the month, while deliveries to the refineries for domestic consumption remained at 0.45 mbd or 13.95 million barrels for the month.

The average price of Nigeria’s reference crude, the Bonny Light (370 API), estimated at US$113.69 per barrel, increased by 2.9 per cent over the level in the preceding month. The end-period headline inflation rate (year-on-year), in January 2012, was 12.6 per cent, compared with 10.3 per cent at the end of the preceding month. Inflation rate, on a twelve-month moving average basis increased marginally by 0.1 percentage point to 10.9 per cent, from the level in the preceding month.

Foreign exchange inflow and outflow through the CBN in January 2012 were US$4.21 billion and US$2.95 billion, respectively, and resulted in a net inflow of US$1.36 billion. Foreign exchange sales by the CBN to the authorized dealers amounted to US$2.11 billion, showing a decline of 27.0 percent from the level in the preceding month, but an increase of 7.7 per cent, when compared with the level in the corresponding period of 2011.

The average Naira exchange rate vis-à-vis the US dollar, depreciated at the WDAS and bureau-de-change segments by 0.1 and 0.8 per cent, respectively. At the interbank segment, the Naira however, appreciated by 0.6 per cent over the level in the preceding month.

Non-oil export earnings by Nigerian exporters declined marginally by 2.0 per cent to US$201.78 million below the level in the preceding month. The development was attributed largely to the decline in exports of minerals and agricultural, products traded at the international commodities market. World crude oil output in January 2012 was estimated at 89.19 million barrels per day (mbd), while demand was estimated at 88.35 million barrels per day (mbd), representing an excess supply of 0.84 mbd, compared with 90.16 and 88.35 mbd supplied and demanded, respectively, in the preceding month. The decline in global crude oil demand was attributed to the growing economic uncertainty, particularly in the Organization for Economic Co-operation and Development (OECD) region and fragile economic conditions in Europe.

Other major international economic developments and meetings of relevance to the domestic economy during the review month included: the World Economic Forum Annual Meeting held at Davos-Klosters, Switzerland from January 25- 29, 2012 on the theme: “The Great Transformation: Shaping New Models”; the meeting of the National Coordinating Committee (NCC) on the Economic Community of West African States (ECOWAS) Multilateral Surveillance Mechanism which took place in Ouagadougou, Burkina Faso, from January 23-27, 2012; and the 18th African Union (AU) Heads of State and Government Summit held in Addis Ababa, Ethiopia from January 29 – 30 with the theme “Boosting Intra-African Trade”.