Macroeconomic Report & Economic Updates

March 10, 2018

Nigeria Economic Update (Issue 6)

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The federal government fiscal operations in 2017 shows that there were deficits for the four quarters recorded. The CBN report reveals that the federal government spent a total of N147.11 billion on capital expenditure in the four quarters (including a 2016 fiscal year roll-over due todelay in approving the 2017 budget), and N3.64 trillion as recurrent expenditure in 2017. Capital releases suggest that only about 6.6 percent of budgetary amount of N2.24 trillion was spent in the fiscal year, while recurrent expenditure represented 72 percent of N5.06 trillion budgeted
for the year. Nigeria’s recurrent expenditure has always exceeded capital expenditure for infrastructure, however, the delay in the passage of the 2017 budget (in June 2017) may have triggered the slow-down in capital releases. Nonetheless, the 2017 budget is still being followed, given that the 2018 budget has not been passed. Going forward, the process of the 2018 budget release should be expedited, as delay in budget sends negative signals to foreign investors which could make them divert capital investment to other countries.




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Nigeria Economic Update (Issue 33)

Available reports from the Nigerian National Petroleum Corporation(NNPC), suggests a significant reduction in the cost incurred to produce one barrel of crude oil for the past two years. Specifically, the cost of production reduced by 71 percent from $78 as at August 2015, to $23 per barrel as at August 2017. This may be attributable to moderations in operational expenditures, following repairs and restructuring in the oil region.

Nigeria Economic Update (Issue 5)

All Share Index (ASI) and Market Capitalization declined by 13 percent to close at 23514.04 points and N8.09 trillion respectively at the end of the trade session on January 15. The huge drop in the Index, representing a 3-year low, led to the introduction of the Index Circuit Breakers Rule. While this policy measure may prevent huge losses in the stock market, rising concerns about macroeconomic stability in Nigeria may significantly increase the level of volatility in the stock market. This may have substantial adverse implications for investors in the Stock Exchange.

Nigeria Economic Update (Issue 17)

Activities in the manufacturing sector remained at levels recorded in 2016Q3. Specifically, manufacturing capacity utilization (a measure of potential manufacturing output that is actually realized) remained at 48.46 percent in 2016Q4 below average. During the quarter, structural bottlenecks such as epileptic power supply (average of 2, 548 Megawatts) in addition to forex constraints, hampered manufacturing activities. As such, high cost of raw materials and cost of production subdued activities in the short term. Recent efforts by the monetary authority to increase forex access to the manufacturing sector as well as improvement in gas supply and electricity generation would help minimize production costs and enhance production process.