Thursday June 15 2017
Nigeria Inflation Rate Slows To 1-Year Low In May
National Bureau of Statistics | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Nigeria's consumer prices increased 16.25 percent year-on-year in May of 2017, easing from a 17.24 percent rise in the previous month. The inflation rate fell for the fourth straight month to the lowest in 12 months, led by a general slowdown in prices. Annual core inflation rate was 13.02 percent, the lowest since March last year. On a monthly basis, consumer prices increased 1.88 percent.

Compared to May of 2016, prices rose less for: food (19.27 percent vs 19.30 percent in April); housing and utlities (12.91 percent vs 16.05 percent); clothing and footwear (16.31 percent vs 17.10 percent); transport (13.26 percent vs 14.91 percent); furniture and household equipment (11.35 percent vs 12.84 percent); education (16.25 percent vs 18.19 percent); health (9.47 percent vs 10.66 percent); miscellaneous goods and services (10.09 percent vs 12.16 percent); communication (3.65 percent vs 3.96 percent) restaurants and hotels (7.84 percent vs 9.08 percent) and alcoholic beverages, tobacco and kola (11.04 percent vs 12.78 percent).

Annual core inflation rate eased to 13.02 percent from 14.75 percent in the previous month, reaching the lowest since March last year.

On a monthly basis, consumer prices rose 1.88 percent, accelerating from a 1.60 percent increase in April.




Tuesday May 23 2017
Nigeria Is Expected To Return To Growth In 2017
Joana Taborda | joana.taborda@tradingeconomics.com

The Nigerian economy contracted in 2016 for the first time in 25 years after militant attacks in the Niger River delta destroyed oil pipelines and slump in oil prices led to a decline in government revenues and a shortage of foreign reserves. The economy is expected to slowly return to growth in 2017, boosted by public investment in roads, rails, ports and the power sector and higher oil production after peace talks between the government and militant groups started this year.

Recent data suggests the Nigerian economy has bottomed out although the GDP shrank 0.52 percent year-on-year in the first three months of 2017. It was the smallest contraction in five quarters as the non-oil sector rose 0.72 percent, rebounding from a 0.33 percent drop in the previous period, boosted by a recovery in transportation, manufacturing and construction. The oil sector continued to decline but at a slower pace (-11.64 percent vs -17.7 percent in Q4) as average crude oil production rose by 0.07 million barrels per day to 1.83 million, first increase in 2 years. Yet, Nigeria's refineries processed 10 million barrels of crude oil in the first quarter, compared to 24 million in full 2016.

In addition, non-oil sector is recovering. After reaching record low of 41.9 in June of 2016, the manufacturing PMI rose to 51.1 in April of 2017 showing first expansion in factory activity so far this year. Also, the non-manufacturing PMI came in at 49.5 in April, pointing to the smallest contraction in services in sixteen straight months, as business activity and new orders rebounded and employment fell less.

Also, the inflation slowed to 17.24 percent in April, the lowest in nine months. The inflation rate spiked to double digits in 2016 after the naira slumped to record lows against the USD on lower oil prices and as the foreign exchange reserves dropped to 10-year low as the central bank tried to protect the currency. As a result, the central bank hiked the key rate two times by a total of 300bps to 14 percent. However, following the recovery in oil prices, foreign exchange reserves rose to USD 30.80 billion in April, the highest level since September of 2015. Thanks to higher oil revenues, the central bank has been able to boost foreign exchange supply in the economy and created a multiple exchange rate system, aiming to improve dollar supply and trading it at a more market-determined rate. As a result, the naira stabilized and the spread between the official rate and unofficial one has been narrowing. 




Tuesday May 23 2017
Nigeria Holds Key Rate At 14%
Central Bank of Nigeria | Joana Taborda | joana.taborda@tradingeconomics.com

The Central Bank of Nigeria held its benchmark interest rate unchanged at 14 percent at its May 2017 meeting as inflationary pressures start to ease while the economy remained in recession for the fifth quarter in the first three months of 2017. The decision came in line with market expectations.

Excerpts from the Statement by the Central Bank of Nigeria:

Available data and forecasts of key economic variables as well as the newly released Federal Government?s Economic Recovery and Growth Plan (ERGP), indicate prospects of output recovery in 2017. The Committee expects that the implementation of this plan, the new foreign exchange policy as well as the current effort by the Federal Government to restore peace in the Niger Delta region would help revive economic growth and stabilize prices. The Committee identified the downside risks to this outlook to include the possibility of a slower-than-expected rate of global economic activity, tight monetary policy stance by the U.S. Fed, resulting in strengthening U.S dollar, and low oil prices.

The Committee re-evaluated the implications for Nigeria of the continuing global uncertainties as reflected in the unfolding protectionist posture of the United States and some European countries; sustenance of the OPEC-Russian agreement to cut oil production beyond July 2017; sluggish global recovery and the strengthening U.S. dollar. 

The Committee also evaluated other challenges confronting the domestic economy and the opportunities for achieving price stability, conducive to growth in 2017. In particular, the Committee noted the persisting inflationary pressures; continuing output contraction; high unemployment rate; elevated demand pressure in the foreign exchange market; low credit to the real sector and weakening financial system indicators, amongst others. Nonetheless, members welcomed the improved implementation of the foreign exchange policy that resulted in naira?s recent appreciation. Similarly, the Committee expressed satisfaction on the release of the Economic Recovery and Growth Plan, and urged its speedy implementation with clear timelines and deliverables. On the strength of these developments, the Committee felt inclined to maintain a hold on all policy parameters. 

In summary, the MPC decided to:
(i)  Retain the MPR at 14 per cent;
(ii) Retain the CRR at 22.5 per cent;
(iii) Retain the Liquidity Ratio at 30.00 per cent;
(iv) Retain the Asymmetric corridor at +200 and -500 basis points around the MPR.




Tuesday May 23 2017
Nigerian Economy Contracts The Least In 1 Year
National Bureau of Statistics | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

The GDP in Nigeria shrank 0.5 percent year-on-year in the first quarter of 2017, following an upwardly revised 1.7 percent decrease in the previous period. It is the smallest fall in five quarters of contraction, as oil sector continued to decline although at a slower pace.

The oil sector went down 11.64 percent year-on-year, following an upwardly revised 17.7 percent drop in the previous period and marking the fifth consecutive quarter of falls. The country produced 1.8 million barrels of crude oil per day, down from 2.1 mbpd a year earlier. As a result, oil sector accounted for 8.90 percent of the GDP compared to 10.02 percent a year earlier.

The non-oil sector advanced 0.72 percent, following a 0.33 percent contraction in the previous period. Ouput rebounded significantly for transport (10.55 percent vs -5.32 percent in Q4), manufacturing (1.36 percent vs -2.54 percent in Q4) and construction (0.15 percent vs -6.03 percent in Q4). In addition, production grew faster for information and communication (2.73 percent vs 1.38 percent in Q4), water supply, sewerage, waste management and remediation (12.63 percent vs 10.76 percent in Q4) and fell less for real estate activities (-3.10 percent vs -9.27 percent in Q4), electricity, gas, steam and air conditioning (-5.04 percent vs -5.16 percent in Q4) and mining (-11.46 percent vs -17.26 percent in Q4). Meanwhile, financial and insurance (0.67 percent vs 2.68 percent in Q4) and agriculture (3.39 percent vs 4.03 percent in Q4) rose less and trade continued to shrank (-3.08 percent vs -1.44 percent in Q4). The non-oil sector accounted for 91.10 percent of the GDP, up from 89.98 percent in the first quarter of 2016.

On a quarterly basis, the economy slipped 12.9 percent compared to a downwardly revised 3.75 percent expansion in the previous quarter.




Tuesday May 16 2017
Nigeria Inflation Rate Slows For The 3rd Month
National Bureau of Statistics | Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Nigeria's consumer prices increased 17.24 percent year-on-year in April of 2017, easing slightly from a 17.26 percent rise in the prior month. The inflation rate fell for the third straight month to the lowest in nine months, led by a slowdown in prices of housing and utilities and transport. Annual core inflation rate was 14.75 percent, the lowest since April last year. On a monthly basis, consumer prices increased 1.60 percent.

Compared to April of 2016, prices went up at a slower pace for housing and utlities (16.05 percent vs 18.85 percent) and transport (14.91 percent vs 15.43 percent).

Meanwhile, cost rose faster for food (19.30 percent vs 18.44 percent), including bread ,cereals,meat, fish, potatoes, yams and other tubes, coffee, tea and cocoa, milk cheese, eggs, oils and fats. Yet, food inflation hit the highest since February of 2009. Also, prices advanced for clothing and footwear (17.10 percent vs 16.65 percent), furniture and household equipment (12.84 percent vs 12.47 percent), health (10.66 percent vs 10.30 percent), miscellaneous goods and services (12.16 percent vs 11.52 percent), restaurants and hotels (9.08 percent vs 8.55 percent) and recreation and culture (10.77 percent vs 10.30 percent).

Annual core inflation rate  eased to 14.75 percent from 15.44 percent in the previous month.

On a monthly basis, consumer prices increased 1.60 percent, slowing from a 1.72 percent rise in March, as cost went up less for: food (2.04 percent vs 2.21 percent), imported food (0.88 percent vs 1.43 percent), housing and utilities (0.87 percent vs 1.08 percent) and transport (1.13 percent vs 1.16 percent).


Thursday April 13 2017
Nigeria Inflation Rate Slows For The 2nd Month
National Bureau of Statistics |Luisa Carvalho | luisa.carvalho@tradingeconomics.com

Nigeria's consumer prices increased 17.26 percent year-on-year in March of 2017, easing from a 17.78 percent rise in the previous month. The inflation rate slowed for the second straight month, due to food and non-food prices, namely housing and utilities, clothing and footwear and transport.

Compared to March of 2016, prices went up at a slower pace for food (17.26 percent vs 17.78 percent in February), including soft drinks, fruits, coffee, tea and cocoa. Meanwhile, biggest increases were recorded for bread, cereals, meat, fish, potatoes, yams and other tubers and wine. In addition, cost slowed for housing and utilities (18.85 percent vs 20.44 percent); clothing and footwear (16.65 percent vs 17.39 percent); transport (15.43 percent vs 16.75 percent); furniture and household equipment (12.47 percent vs 13.27 percent); education (18.56 percent vs 19.12 percent), health (10.3 percent vs 10.5 percent) and miscellaneous goods and services (11.52 percent vs 11.86 percent).

Meanwhile, cost rose faster for recreation and culture (10.30 percent vs 9.99 percent) and restaurants and hotels (8.55 percent vs 8.18 percent).

Annual core inflation rate edged down to 15.44 percent from 16.01 percent in the previous month.

On a monthly basis, consumer prices went up 1.72 percent compared to a 1.49 percent rise in the previous month, as cost increased for: food (2.21 percent vs 1.99 percent); housing and utilities (1.08 percent vs 1.02 percent); clothing and footwear (1.54 percent vs 1.04 percent); transport (1.16 percent vs 0.99 percent) and furniture and household equipment (1.29 percent vs 0.93 percent). 


Tuesday March 21 2017
Nigeria Leaves Monetary Policy Unchanged
Central Bank of Nigeria | Deborah Neves | deborah.neves@tradingeconomics.com

The Central Bank of Nigeria held its benchmark interest rate unchanged at 14 percent at its March 2017 meeting, as expected. The inflation rate eased slightly for the first time in fifteen months to 17.78 percent in February, but remained well above the central bank target of 10 percent by 2020. Also, the economy shrank 1.5 percent in 2016, the first annual contraction in 25 years.

Excerpts from the Statement by the Central Bank of Nigeria:

The Committee re-evaluated the implications for Nigeria of the continuing global uncertainties as reflected in the unfolding protectionist posture of the United States and some European countries; sustenance of the OPEC-Russian agreement to cut oil production beyond July 2017; sluggish global recovery and the strengthening U.S. dollar.

The Committee also evaluated other challenges confronting the domestic economy and the opportunities for achieving price stability, conducive to growth in 2017. In particular, the Committee noted the persisting inflationary pressures; continuing output contraction; high unemployment rate; elevated demand pressure in the foreign exchange market; low credit to the real sector and weakening financial system indicators, amongst others.

Nonetheless, members welcomed the improved implementation of the foreign exchange policy that resulted in naira’s recent appreciation. Similarly, the Committee expressed satisfaction on the release of the Economic Recovery and Growth Plan, and urged its speedy implementation with clear timelines and deliverables. On the strength of these developments, the Committee felt inclined to maintain a hold on all policy parameters.

Besides, the Committee noted the need to create binding restrictions on growth in narrow money and structural liquidity and the imperative of macroeconomic stability to achieving price stability conducive to growth.

The Committee noted the consecutive positive contribution of agriculture to GDP in Q4 2016, a development partly traceable to the Bank’s interventions in the sector. The Committee remains optimistic that, if properly implemented, the newly released Economic Recovery and Growth Plan (ERGP) coupled with innovative, growth-stimulating sectoral policies would help fast track economic recovery.

In summary, the MPC decided to:

(i)  Retain the MPR at 14 per cent;
(ii) Retain the CRR at 22.5 per cent;
(iii) Retain the Liquidity Ratio at 30.00 per cent;
(iv) Retain the Asymmetric corridor at +200 and -500 basis points around the MPR.


Tuesday March 14 2017
Nigeria Inflation Rate Slows to 17.78% in February
National Bureau of Statistics | Deborah Neves | deborah.neves@tradingeconomics.com

Nigeria's consumer prices increased by 17.78 percent year-on-year in February of 2017, following 18.72 percent gain in the previous month. The inflation rate slowed for the first time in fifteen months, mainly due to non-food prices.

Compared to February of 2016, prices increased at a slower pace for: housing and utilities (20.4 percent from 27.2 percent in January); education (19.1 percent from 21 percent); clothing and footwear (17.4 percent from 17.9 percent); furnishings and household equipment (13.3 percent from 13.9 percent) and transport (16.8 percent from 17.2 percent).

Meanwhile, cost of food rose faster by 18.5 percent following 17.8 percent in the previous month, namely for bread, cereals, fish, meat, potatoes and wine; while increased less for imported food (19.4 percent from 21 percent). 

Annual core inflation rate edged down to 16 percent from 17.85 percent in the previous month.

On a monthly basis, consumer prices went up 1.49 percent compared with a 1.01 percent rise in the previous month, as cost rose for: food (+1.99 percent); imported food (+0.9 percent); housing and utilities (+1.02 percent); clothing and footwear (+1.04 percent) and transport (+0.99 percent).


Tuesday February 28 2017
Nigerian Economy Contracts 1.3% in Q4
National Bureau of Statistics | Deborah Neves | deborah.neves@tradingeconomics.com

The GDP in Nigeria shrank 1.3 percent year-on-year in the fourth quarter of 2016, following a 2.24 percent decline in the previous period. It was the fourth consecutive quarter of contraction as lower oil prices keep hurting the oil sector. Considering full 2016, the economy contracted 1.5 percent, following a 2.8 percent growth in 2015, the first annual contraction in 25 years.

The oil sector declined 12.38 percent year-on-year, following a 22.01 percent drop in the previous period and marking the fourth consecutive quarter of falls in the oil sector. The country produced 1.9 million barrels per day, down from 2.16 mbpd a year earlier, hurt by lower oil prices. As a result, the oil sector accounted for 7.15 percent of the GDP compared to 8.06 percent a year earlier.

The non-oil sector decreased slightly by 0.33 percent after being flat in the previous period (0.03 percent): production continued to fall for real estate (-9.27 percent from -7.37), manufacturing (-2.54 percent from -4.38 percent in the third quarter); construction (-6.03 percent from -6.13 percent), trade (-1.44 percent from -1.38 percent) and electricity, gas, steam and air conditioning supply (-5.16 percent from -6.68 percent). In addition, output rose less for agriculture (4.03 percent compared to 4.54 percent). The non-oil sector accounted for 92.85 percent of the GDP up from 91.94 percent in the fourth quarter of 2015.

On a quarterly basis, the economy expanded by 4.09 percent slowing from 8.99 percent in the previous quarter.

Considering full 2016, industrial output drove the contraction (down 8.53 percent), followed by services (down 0.82 percent) while agriculture sector expanded (up 4.11 percent). The oil sector shrank 13.65 percent, following a 5.45 percent drop in 2015, reducing the oil sector share in GDP to 8.42 percent from 9.61 percent. The country produced 1.833 million barrels a day in 2016, down from 2.13 mbpd in 2015. In addition to lower oil prices, Nigeria faced several contraints including pipeline vandalism, fuel shortages and lower electricity generation that dragged oil and industrial production down.


Wednesday February 15 2017
Nigeria Inflation Rate Highest Since September 2005
National Bureau of Statistics | Deborah Neves | deborah.neves@tradingeconomics.com

Nigeria's consumer prices increased by 18.72 percent year-on-year in January of 2017, following 18.55 percent rise in the previous month. The inflation rate accelerated for the 12th straight month to the highest since September 2005, as prices continued to rise for food and housing and utilities.

Compared to January of 2016, cost of food increased by 17.8 percent following 17.4 percent in December (namely for bread and cereals; meat, oil and fats, and fish) while prices of imported food increased slightly less (21 percent from 21.1 percent). Additional upward pressure came from: housing and utilities (27.2 percent, at the same pace as in December); education (21 percent from 21.6 percent); clothing and footwear (17.9 percent from +18.8 percent); furnishings and household equipment (13.9 percent from 13.6 percent) and transport (17.2 percent from 17.3 percent).

Annual core inflation rate edged down to 17.85 percent from 18.03 percent in the previous month.

On a monthly basis, consumer prices went up 1.01 percent compared with a 1.06 percent rise in the previous month, as cost rose for: food (+1.3 percent); imported food (+0.9 percent); housing and utilities (+0.6 percent); and clothing and footwear (+0.9 percent).