August 3, 2015
Volume 1 April 2014
Provisional Monetary statistics by the CBN show an increase in currency in circulation a portion of overall money supply. Specifically, currency in circulation rose (Month-on-Month) by 14.2 percent to N2.2 million in December 2016 the highest Month-on-Month increase recorded for the year 2016. The rise in currency- outside-bank may be attributed to the growing demand for cash balances for spending activities during the festive period. This development would largely compound the liquidity problem associated with TSA implementation and ongoing CBN monetary tightening as deposit money banks might be cash-strapped. Going forward, efforts should be geared towards intensifying initiatives that promote a cashless economy that encourages cashless transactions.
Internally Generated Revenue: Total internally generated revenue particularly declined across the 36 states in Nigeria, in 2015. This is attributable to the weak macroeconomic and financial conditions
Recent Data on Nigerias Real GDP growth rate (Year-on-Year) declined by 2.47 percentage points, from 2.11 per cent in 2015Q4 to -0.36 percent in 2016Q11. This is the lowest GDP growth rate since 2004Q2 (-0.81 percent). The Oil sector continued to contract, as -1.89 percent growth was recorded in 2016Q1. The negative growth witnessed in the oil sector was likely driven by the fall in global oil prices by $9.732 and decline in domestic crude oil production, relative to preceding quarter. Similarly, the Non-oil sector witnessed a negative growth as it declined by 3.32 percentage points from 3.14 percent in 2015 Q4 to -0.18 percent in 2016Q1. The underperformance in the non-oil sector was driven by significant contractions in financial (by 17.69 percent), manufacturing (by 8.77 percent), and real estate (by 5.48 percent) sub-sectors. Given that the present economic fundamentals point to a likely recession in 2016Q2, the government can stir economic activities by speeding up the budget implementation process to spur growth in the non-oil sector and the economy at large. More so, the domestic production shock in the oil sector needs to be addressed to effectively leverage on the present marginal rise in crude oil prices.
Data released by the National Bureau of Statistics shows that Internally Generated Revenue by states increased in 2017H1. The IGR increased from N392.1 billion in 2016H1, to N396.9 billion in 2017H1, a slight 1.2 percentage half Year-on-year growth. Also, N149.5 billion was generated in 2017Q3. Lagos state remains top in internal revenue generation, with a significant 42.3 percent share of total IGR in the review half year. The improvements in IGR may be attributable to efficient revenue collection by each reported state from the various sources of internal revenue: taxes, fines and fees, licenses, earnings & sales, rent on government property, interests and dividends, among others.