Weekly Economic and Financial Commentary – WE 03rd May, 2019


Saturday, May 04, 2019  / 08:39AM / By ARM Research 


Global Economy

In the U.S, employers added 263,000 jobs in the month of April, causing the unemployment rate to drop by 20bps YoY to 3.6%. This is the lowest on record, in half a century, underscoring the economy’s resilience despite fears of a slowdown at the start of the year. Also, monetary policy committee in the U.S and U.K left policy rates unchanged at 2.5% and 0.75% respectively, as concerns on slowing global economic growth, muted inflation and Brexit uncertainty. Elsewhere, preliminary estimates by Eurostat showed the eurozone regained its momentum, expanding by 0.4% QoQ in Q1 2019,  from 0.2% expansion recorded in Q4 18. On annualized basis, the economy expanded 1.2% YoY - unchanged from the previous quarter. Specifically, growth in the bloc was supported by rebound in Italy which expanded 0.2% QoQ after 2 consecutive quarters of decline, while growth in France remained unchanged at 0.3% QoQ for the third consecutive time. Germany’s data was unavailable at the time of writing.      


Domestic Economy 

Total revenue accrued to the states’ government (including FCT) printed at N3.7 trillion over 2018, implying an addition of N1.0 trillon, as reported by the National Bureau of Statistics (NBS). The increase reflected a 43% YoY increase in net FAAC allocations to N2.6 trillion and 25% YoY increase in Internally Generated Revenue to N1.2 trillion. Notably, increased FAAC allocation mirrors higher oil prices and production reported in the period, while improved tax collections in Lagos, Ogun, Ondo and Rivers state drove the increase in IGR. Also, of the 36 states, the IGR remains the main source of revenue for both Lagos and Ogun when compared to FACC received during the year.



The Nigerian Bourse closed negative this week with the NSE ASI slipping 1.78% WoW to close at 29,212.00 points, while market capitalization lost N198 billion. The bearish sentiment was spurred by losses across the Cement (-3.67%), Banking (-2.00%), Personal Care (-1.20%) and Food (-1.18%) sectors. Dissecting the sector performance reveals selloff across various stocks such as DANGCEM: -3.69%, GTBANK: -2.19%, ZENITH: -1.64%, PZ: -5.5%, NESTLE: -1.94%, and DANGSUGAR: -1.4%.


Fixed Income

Average fixed income yield closed the holiday-shortened week flat at 13.65%, with yields in both the short and long end of the curve  unchanged from the previous week. At the NTB market, average yield was flat at 12.98%, as yield contraction in the 182-day bill offset expansions in the 91-day and 364-day bills. Average yield in the bond market was also flat at 14.32%, with notable movement in the FEB 20 (-16bps WoW) and the JUL 34 (+15bps) bonds. Meanwhile, at the NTB auction held during the week, N109.7 billion worth of bills were sold with stop rates of the 91-day, 182-day and 364-day bills printing at 10% (previously 10.15%), 12.5% (previously 12.5%) and 12.77% (previously 12.74%), respectively.  


Take-Away For The Week

Trend in total revenue accrued to states—N’billion This  week, we feature the total FAAC and IGR generated by all states from 2012 to 2018

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Source: NBS, ARM Research



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Research 234 (1) 2701653  research@armsecurities.com.ng


Nigeria: Economic Dashboard @ 030519


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