Macroeconomic Report & Economic Updates

Data from the NBS on mining and quarrying in Nigeria show an increase in the quantity of solid minerals produced in 2017. Precisely, Nigeria produced 45.75 million tons of solid minerals in 2017¹ – up by 5.2 percent Year-on-Year. Disaggregated by states, Ogun state produced the largest tons of about 51 percent of total solid minerals, followed by Kogi and Abuja with 11 and 10 percent respectively. By type, granite and limestone were the most produced solid minerals, representing 38 percent and 31 percent of total tons respectively. The increase in production of solid mineral may have been triggered by improved demand for raw materials needed to produce end-products like cement – given the commissioning of the Okpella factory in 2017²

For the 12th consecutive period, the Monetary Policy Committee voted to retain all rates at the end of the policy meeting held on July 23-24, 2018 – MPR at 14 percent, CRR at 22.5 percent, Liquidity ratio at 30 percent and asymmetric corridor at +200 and -500 around the MPR1. A review of laudable developments in key macroeconomic indicators and positive economic growth in the first half of 2018 informed the committee’s stance to hold all rates. However, the committee noted constraints to economic growth outlook in the second half of 2018, especially slow and irregular implementation of the 2018 expansionary fiscal budget that would derail its liquidity impact, as well as possible external shocks. Going forward, there is need for a standardized budgetary calendar that should be adhered to mandatorily in order to guide public and private sector investment plan and foster economic stability

The IMF retained its 2.1 percent forecast of Nigeria’s GDP growth rate for 2018, while increasing the 2019 projected GDP growth rate to 2.3 percent1, from 1.9 percent projected earlier. The stated review is at the backdrop of continued increases in commodity prices in the long term, for which crude oil is the benchmark for Nigeria. Outlook on crude oil price and production is expected to maintain upward improvements in the near term. However, the Nigerian government pegs its own forecasted growth rate at 3.5 percent in 2018 – higher than figures predicted by the IMF, although premised around the same driving factors. In order to achieve a 3.5 percent GDP growth rate, a more effective implementation of the bold initiatives in this administration’s economic plan - the Economic Recovery and Growth Plan - is critical particularly in the agriculture and manufacturing sectors.

Information from the Apex bank shows a likelihood of not attaining the financial inclusion target of 2020 as stated in the Nigeria Financial Inclusion Strategy (NFIS) of 2012. Precisely, the CBN’s 2016 financial inclusion report states that only 58.4 percent of Nigerian adults were financially included as against the overall financial inclusion rate targeted at 80 percent. Similarly, only about 48.6 percent use formal financial services compared to the targeted 70 percent¹. Related to the targets are 22 key performance indicators that Nigeria still lags behind in. Leveraging on technology to boost financial inclusion would be a significant step forward

Analysis of transactions at the stock market for the month ended May 2018 reveals an increase in the total transaction by a significant 50 percent. From N212.2 billion recorded in April to N318.3 billion in May 2018¹. Foreign transactions also increased by 57 percent to N193 billion and accounted for 61 percent of total transactions at the bourse. Similarly, domestic investment increased by 40 percent to N125 billion with a 49 percent share of total transactions. With a growing foreign investors’ participation, foreign portfolio investment outperformed domestic investment by 21.3 percent, and for the second consecutive month