CBN Economic Report November 2012

CBN Economic Report November 2012


January 23, 2013/ CBN

Growth in the key monetary aggregate was modest at the end of November 2012. On month-on-month basis, broad money (M2) rose by 4.6 per cent, due, largely, to the 10.0 percent rise in domestic credit (net) of the banking system. Relative to the level at end-December 2011, M2, grew by 13.2 per cent, owing, largely, to the rise in domestic credit (net) and foreign assets (net) of the banking system. Narrow money (M1) grew by 5.2 per cent, compared with the level at the end of the preceding month. Reserve money (RM) fell by 2.0 per cent below its level in the preceding month.

Available data indicated mixed developments in deposit rates. Both maximum and prime lending rates rose in November 2012. The spread between the weighted average term deposit and maximum lending rates narrowed slightly from 17.37 percentage points to17.32 percentage points in November 2012. The margin between the average savings deposit and maximum lending rates, however, widened to 23.05 percentage points in the review month from 22.89 percent in the preceding month. The weighted average interbank call rate rose to 11.86 per cent, from 11.42 per cent in the preceding month, reflecting the liquidity condition in the inter-bank funds market during the review month.

The value of money market assets outstanding at end– November 2012 was N6, 148.81 billion, showing an increase of 0.8 per cent over the level at end-October 2012. The development was attributed to the 1.3 per cent increase in the value of FGN Bonds outstanding. Activities on the Nigerian Stock Exchange (NSE) indicated mixed developments in November 2012.

Gross federally-collected revenue in November 2012 was estimated at N841.56 billion, showing an increase of 4.2 and 3.8 per cent above the monthly budget estimate and the preceding month’s level, respectively. At N630.95 billion, gross oil receipts exceeded both the monthly budget estimate and the preceding month’s level by 14.1 and 4.0, respectively. This was attributed largely, to the rise in receipts from petroleum profit tax (PPT) and royalties.

Non-oil receipts, at N210.61 billion (25.0 per cent of the gross federally collected revenue), was 17.3 per cent lower than the monthly budget estimates, but exceeded the receipts in the preceding month by 3.2 per cent. The rise in non-oil revenue relative to the preceding month reflected, largely, the rise in corporate tax and value added tax (VAT) collections. Federal Government estimated retained revenue in November 2012 was N245.44 billion, while total estimated expenditure was N397.01 billion. Thus, the fiscal operations of the Federal Government resulted in an estimated deficit of N151.56 billion, as against the estimated monthly budget deficit of N94.68 billion.

Agricultural activities in November 2012 were dominated by harvesting of crops and livestock in preparation for the end of the year festivities. Crude oil production, including condensates and natural gas liquids was estimated at 1.95 million barrels per day (mbd) or 58.5 million barrels for the month.

Crude oil export was estimated at 1.50 million barrels per day (mbd) or 45.0 million barrels during the month. The average price of Nigeria’s reference crude, the Bonny Light (370 API), was estimated at US$111.02 per barrel, indicating a decrease of 2.8 per cent, compared with the level in the preceding month.

The end-period headline inflation rate (year-on-year), in November 2012, was 12.3 per cent, 0.6 percentage point above the level in the preceding month. Inflation rate on a twelve-month moving average basis was 12.1 per cent, compared with 11.9 per cent in the preceding month.

Foreign exchange inflow and outflow through the CBN in November 2012 were US$4.27 billion and US$3.84 billion, respectively, resulting in a net inflow of US$0.43 billion. Foreign exchange sales by the CBN to the authorized dealers amounted to US$1.64 billion, showing an increase of 13.8 percent over the level in the preceding month.

Relative to the level in the previous month, the average Naira exchange rate vis-à-vis the US dollar appreciated in the wDAS segments by 0.01 per cent, but depreciated in the inter-bank and bureau-de-change segments by 0.2 per cent apiece.

Non-oil export receipts declined by 30.50 per cent below the level in the preceding month. The development was attributed, largely, to the decline in agriculture, manufactured products and minerals sub-sectors.

World crude oil output in November 2012 stood at 90.47 million barrels per day (mbd), while demand was 90.01 million barrels per day (mbd), compared with 90.22 mbd and 89.52 mbd supplied and demanded, respectively, in the preceding month.

Other major international economic developments and meetings of relevance to the domestic economy during the month included: the G20 Finance Ministers and Central Bank Governors meeting held in Mexico City from November 4 – 5, 2012. The Meeting was convened to assess progress on the fulfillment of the mandates to promote robust growth and job creation as well as address the ongoing economic and financial challenges.

Also, the Executive Board of the International Monetary Fund (IMF) met on November 8, 2012. The Board considered the Fund’s Work Programme for the next twelve months, among others.

In another development, the 12th meeting of the Special Implementation Committee (SIC) of the Nigeria- South Africa Bi-National Commission (BNC) was held in Abuja from November 19 – 20, 2012. The objective of the meeting was to further strengthen cooperation and enhance relations between the two countries, as well as review the implementation of decisions taken at the last meeting.

Finally, the 2nd meeting of the D-8 Heads of Central Bank with the theme “Enhancing Financial and Monetary Cooperation for Promoting Inclusive Economic Growth” was organized by the State Bank of Pakistan on the sidelines of the 2012 D-8 Summit hosted by the Islamic Republic of Pakistan from November 19 – 22, 2012. The objective of the meeting was to strengthen financial and banking relationship among member states.

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