Macroeconomic Report & Economic Updates
October 4, 2016
Nigeria Economic Update (Issue 41)
The
naira continued its downward trajectory in the review week. Specifically, naira
depreciated significantly at the parallel segment by 3.5 percent to a record
low of N440/$ on September 23, 2016. Notably, this was driven by
the worsening liquidity constraints at the interbank market which left the
excess forex demand to be sourced at the parallel market, and thus exerted
downward pressure on the naira. The naira is likely to further
weaken given that most of the liquidity constraints are exogenously determined
and thus forex supply will likely remain subdued by its demand.
Related
Nigeria Economic Update (Issue 18)
Recent Data released by the Nigeria Bureau
of Statistics reveals an increase in total public debt stock between 2015 and
2016. Foreign and domestic debt stock stood at $11.4 billion and N14.0 trillion
respectively as at December 2016, from $10.7 billion and N10.5
trillionrecorded as at December 2015. Disaggregated
data shows that foreign debt sources comprised Multilateral ($8.0 billion),
Bilateral ($0.2 billion) and Exim bank of China ($3.2 billion); domestic
sources included government bonds, treasury bills and bonds. The federal
government and states accounted for 68.7% and 31.3% respectively of foreign
debt stock; 78.9% and 21.1% respectively of domestic debt stock. This maybe
particularly at the backdrop of government borrowings in 2016 to finance its
expenditure (mostly recurrent).