Wednesday June 13 2018
Nigeria Inflation Rate Slows Less Than Expected
National Bureau of Statistics | Gabriela Costa | gabriela.costa@tradingeconomics.com

Nigeria’s inflation rate decreased to 11.6 percent in May of 2018 from 12.5 percent in the prior month and slightly above market expectations of 11.4 percent. It was the lowest inflation rate since February of 2016, as prices of food & non-alcoholic beverages, housing & utilities, clothing & footwear and transport grew at a slower pace.

The inflation rate has been declining since reaching more than 12 year high of 18.7 percent in January of 2017.

Year-on-year, cost eased for food & non-alcoholic beverages (13.4 percent compared to 14.8 percent in April); housing & utilities (7 percent compared to 7.2 percent); clothing & footwear (11.8 percent compared to 12.7 percent); transport (11.2 percent compared to 11.6 percent); furnishings & household equipment (11.2 percent compared to 12.4 percent); education (9.9 percent compared to 10.1 percent); health (10.8 percent compared to 11 percent); miscellaneous goods & services (10.6 percent compared to 10.9 percent); restaurants & hotels (10.5 percent compared to 10.8 percent); alcoholic beverages, tobacco & kola (8.5 percent compared to 8.7 percent) and recreation & culture (7.9 percent compared to 8.4 percent). Meanwhile, cost went up faster for communication (5.1 percent compared to 4.9 percent).

Annual core inflation which excludes price of volatile agricultural products fell to 10.7 percent from 10.9 percent in the previous month.

On a monthly basis, consumer prices went up 1.1 percent, after rising 0.8 percent in April.




Tuesday May 22 2018
Nigeria Leaves Interest Rate Unchanged at 14%
Mario | mario@tradingeconomics.com

The Central Bank of Nigeria left its benchmark interest rate unchanged at 14 percent on May 22nd 2018, as widely expected. The last time policymakers changed rates was in July 2016, when they lifted the monetary rate by 200 bps. The Committee said the decision is consistent with achieving the single-digit inflation target rate. The annual inflation rate fell to 12.48 percent in April from 13.34 percent in March, mainly due to lower prices of food and non-alcoholic beverages.

Excerpts from the Statement by the Central Bank of Nigeria:

The Committee noted improvements in the domestic economy, attributable to the steady decline in inflation, rebound in oil prices and increase in production level, as well as the continued stability in the foreign exchange market. According to data from the National Bureau of Statistics (NBS), real Gross Domestic Product (GDP) for Q4 2017 was revised upwards from 1.92 per cent to 2.11 per cent, while a growth of 1.95 per cent was recorded in the first quarter of 2018, up from a contraction of 0.91 per cent in the corresponding period of 2017. The development was due to growth in the oil and non-oil sectors by 14.77 and 0.76 per cent, respectively.

The Monetary Policy Committee also noted the sustained positive outlook based on the Manufacturing, and Non-manufacturing Purchasing Managers’ Indices (PMI), which rose for thirteenth and twelfth consecutive months to 56.9 and 57.5 index points, respectively, in April 2018. The Committee welcomed this development but believes that growth remains largely fragile and could benefit from further reforms and stimulus.

Inflationary pressures continued to moderate with headline inflation (year-on-year) declining for the fifteenth consecutive month to 12.48 per cent in April 2018 from 13.34 per cent in March 2018. Food and Core inflation also decelerated to 14.80 and 10.92 per cent from 16.08 and 11.18 per cent, respectively, during the same period.

The outlook for inflation indicates continued moderation in the price level, even though the risks include huge liquidity injections that is expected to arise from the implementation of the proposed N9.12 trillion 2018 FGN budget; expenditure towards the 2019 elections; monthly FAAC injections, approval and implementation of the proposed new national minimum wage, possibly finance by a supplementary budget. These could impact aggregate demand and put pressure on domestic prices in the remaining months of 2018 and may dampen the gains already made by the Bank in stabilizing prices.

Overall, the Committee was convinced that the economy needed a new impetus of increased lending by the banking system and would work with the Bank to adopt innovative ways to encourage the deposit money banks (DMBs) to adopt innovative ways to accelerate credit growth, including a reduction 12 in the policy rate when conditions for such a decision arise. The MPC noted that at single digit inflation and higher reserve levels, the risks associated with a policy rate reduction under conditions of wavering foreign capital inflows and an unstable oil market, including other severe uncertainties, could be better managed to deliver macroeconomic stability in Nigeria. In consideration of the foregoing, therefore, the Committee decided by a vote of 8 members to retain the Monetary Policy Rate (MPR) at 14.0 per cent alongside all other policy parameters. One (1) member, however, voted to increase the MPR by 50 basis points.




Monday May 21 2018
Nigeria GDP Growth Slows to 1.9% in Q1
National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

The economy of Nigeria expanded 1.9 percent year-on-year in the first quarter of 2018, easing from an upwardly revised 2.1 percent growth in the previous period. It is the fourth consecutive quarter of expansion, as the oil sector continued to rise while the non-oil output growth slowed.

The oil sector grew 14.7 percent year-on-year in the first quarter of 2018, accelerating from a 11.2 percent expansion in the prior period. The country produced 2.0 million barrels of crude oil per day, up from 1.75 mbpd in the same period a year earlier. As a result, the oil sector accounted for 9.6 percent of the GDP compared to 8.5 percent a year ago.

The non-oil sector advanced 0.7 percent, after increasing 1.5 percent in the prior period.

Growth eased for: agriculture (3.0 percent compared to 4.2 percent in Q4 2017); transportation and storage (14.5 percent compared to 16.6 percent); food and accomodation services (0.3 percent compared to 0.8 percent); electricity, gas, steam and air conditioning supply (4.9 percent compared to 16.0 percent) and arts, entertainment and recreation (0.3 percent compared to 3.5 percent). Additionally, output contracted for construction (-1.5 percent compared to 4.1 percent) and internal trade (-2.6 percent compared to 2.1 percent). Also, production dropped further for public administration (-1.7 percent compared to -0.5 percent) and real estate activities (-9.4 percent compared to -5.9 percent) and continued to fall for social services (-0.4 percent). On the other hand, output increased at a faster pace for financial and insurance (13.3 percent compared to 0.2 percent); manufacturing (3.4 percent compared to 0.1 percent); mining and quarrrying (14.9 percent compared to 10.7 percent) and water supply, sewerage, waste management and remediation (11.6 percent compared to 1.2 percent). In addition, production rebounded for information and telecommunication (1.6 percent compared to -1.5 percent) and education (0.5 percent compared to -1.0 percent).

On a quarterly basis, the economy shrank 13.4 percent, after expanding 4.7 percent in the previous quarter.




Tuesday May 15 2018
Nigeria Inflation Rate Edges Down to 12.5% in April
National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Nigeria’s annual inflation rate decreased to 12.5 percent in April of 2018 from 13.3 percent in the prior month and in line with market expectations. It was the lowest inflation rate since February of 2016, as prices of food and non-alcoholic beverages and housing and utilities grew at a slower pace.

The inflation rate has been declining since reaching more than 12 year high of 18.7 percent in January of 2017.

Year-on-year, cost eased for food and non-alcoholic beverages (14.8 percent compared to 16.1 percent in March); housing and utilities (7.2 percent compared to 7.5 percent) and clothing and footwear (12.7 percent compared to 13.6 percent). In addition, prices slowed for transport (11.6 percent compared to 11.9 percent); furnishings and household equipment (12.4 percent compared to 12.9 percent); education (10.1 percent compared to 10.4 percent) and health (11.0 percent compared to 11.3 percent). Also, cost increased at a softer pace for miscellaneous goods and services (10.9 percent compared to 11.5 percent); restaurants and hotels (10.8 percent compared to 11.0 percent); alcoholic beverages, tobacco and kola (8.7 percent compared to 8.8 percent) and recreation and culture (8.4 percent compared to 9.1 percent). Meanwhile, cost went up faster for communication (4.9 percent compared to 4.5 percent). 

Annual core inflation which excludes price of volatile agricultural products fell to 10.9 percent from 11.2 percent in the previous month.

On a monthly basis, consumer prices remained unchanged, after rising 0.8 percent in January.


Thursday April 12 2018
Nigeria Inflation Rate Slows to 2-Year Low in March
National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in Nigeria advanced 13.3 percent year-on-year in March of 2018, easing from a 14.3 percent gain in the previous month and below market consensus of a 14.5 percent rise. It was the lowest inflation rate since March of 2016, mainly due to a slowdown in prices of food and housing and utilities.

The inflation rate has been declining since reaching more than 12 year high of 18.7 percent in January of 2017.

Year-on-year, prices increased at a softer pace for food and non-alcoholic beverages (16.1 percent compared to 17.6 percent in February); housing and utilities (7.5 percent compared to 7.9 percent) and clothing and footwear (13.6 percent compared to 14.4 percent). Also, cost rose less for transport (11.9 percent compared to 12.3 percent); furnishings and household equipment (12.9 percent compared to 13.5 percent); education (10.4 percent compared to 10.6 percent) and health (11.3 percent compared to 11.5 percent). In addition, prices slowed for miscellaneous goods and services (11.5 percent compared to 12.1 percent); restaurants and hotels (11.0 percent compared to 11.1 percent); alcoholic beverages, tobacco and kola (8.8 percent compared to 8.9 percent) and recreation and culture (9.1 percent compared to 9.9 percent). On the other hand, cost advanced further for communication (4.5 percent compared to 4.3 percent). 

Annual core inflation which excludes price of volatile agricultural products dropped to 11.3 percent, following a 11.7 percent gain in the prior month.

On a monthly basis, consumer prices remained unchanged, after increasing 0.8 percent in January.


Wednesday April 04 2018
Nigeria Keeps Interest Rate Steady at 14%
Central Bank of Nigeria | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Central Bank of Nigeria held its benchmark interest rate steady at 14 percent on April 4th 2018, in line with market expectations. The last time policymakers changed rates was in July of 2016, when they rose the monetary rate by 200 bps. Policymakers showed concerns about the fiscal distortions associated with tax revenue and GDP growth.

Excerpts from the Statement by the Central Bank of Nigeria:

Notwithstanding the general improvement in macroeconomic conditions, the Committee noted the rather slow pace of moderation in food inflation. It also took note of the potential risk of a pass-through from rising global inflation to domestic prices. Members, however, expressed confidence that the tight stance of monetary policy would continue to complement other policies of government in addressing some of the structural issues underlying the stickiness of food prices. The Committee noted that at 14 percent, the policy rate was tight enough to rein-in current inflationary pressures. The Committee, therefore, reaffirmed its commitment to price stability conducive to sustainable and inclusive growth.

The Committee noted with satisfaction the gradual implementation of the Economic Recovery and Growth Plan, in an effort to stimulate economic recovery. In the same vein, the Committee urged quick passage of the 2018 Appropriation Bill by the National Assembly, so as to keep fiscal policy on track and deliver the urgently needed reliefs in terms of employment and growth for the citizenry.

In reaching its decision, the Committee appraised potential policy options in terms of the balance of risks. The Committee also took note of the gains made so far as a result of its earlier decisions; including the stability of the foreign exchange market, the moderation in inflation rate as well as the restoration of economic growth. The launching of the Food Security Council by the Federal Government to improve food sustainability is a step in the 10 right direction. The Committee was concerned about the fiscal distortions associated with absence of buoyancy between GDP growth and tax revenue, and urged the fiscal authorities to deploy appropriate corrective measures to address this phenomenon.

The Committee was of the view that further tightening would strengthen the impact of monetary policy on inflation with complementary positive effects on capital flows and exchange rate stability. Nevertheless, it could potentially dampen the positive outlook for growth and financial stability. However, the Committee is of the view that loosening would strengthen the outlook for growth by stimulating domestic aggregate demand through reduced cost of borrowing. This may, however, lead to a rise in consumer prices, generating exchange rate pressures on the currency in the process. The Committee also believes that loosening could worsen the current account balance through increased importation. On the argument to hold, the Committee believes that key macroeconomic variables have continued to evolve in a positive direction in line with the current stance of macroeconomic policy and should be allowed more time to fully manifest.

Consequently, the MPC voted unanimously to retain the
(i) MPR at 14.0 per cent;
(ii) CRR at 22.5 per cent;
(iii) Liquidity Ratio at 30.0 per cent; and
(iv) Asymmetric corridor at +200 and -500 basis points around the MPR. 


Wednesday March 14 2018
Nigeria Inflation Rate Drops to Lowest Since 2016
National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in Nigeria increased 14.33 percent year-on-year in February of 2018, slowing from a 15.13 percent gain in the prior month and below market expectations of 14.5 percent. It was the lowest inflation rate since April 2016 as cost rose less for food and non-alcoholic beverages and housing and utilities.

The inflation rate has been decreasing since reaching more than 12 year high of 18.72 percent in January of 2017.

Year-on-year, prices slowed for food and non-alcoholic beverages (17.6 percent compared to 18.9 percentin January); housing and utilities (7.9 percent compared to 8.3 percent) and clothing and footwear (14.4 percent compared to 14.8 percent). Additionally, cost eased for transport (12.3 percent compared to 12.4 percent); furnishings and household equipment (13.5 percent compared to 13.7 percent); education (10.6 percent compared to 10.9 percent) and recreation and culture (9.9 percent compared to 10.1 percent). Meanwhile, prices advanced faster for miscellaneous goods and services (12.1 percent compared to 11.7 percent); restaurants and hotels (11.1 percent compared to 10.8 percent); alcoholic beverages, tobacco and kola (8.9 percent compared to 8.8 percent) and communication (4.3 percent compared to 3.9 percent). Also, inflation was steady for health (11.5 percent , the same as in January). 

Annual core inflation which excludes price of volatile agricultural products declined to 11.7 percent, following a 12.1 percent rise in the previous month.

On a monthly basis, consumer prices remained unchanged, after a 0.8 percent increase in January.


Tuesday February 27 2018
Nigeria GDP Growth Expands the Most Since 2015
National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Nigerian economy advanced 1.9 percent year-on-year in the fourth quarter of 2017, accelerating from a 1.4 percent growth in the prior period. It is the third consecutive quarter of expansion and the strongest since the fourth quarter of 2015, as the oil sector continued to recover.

The oil sector increased 8.38 percent year-on-year, following a 25.89 percent rise in the previous period.The country produced 1.91 million barrels of crude oil per day, up from 1.76 mbpd a year earlier. As a result, the oil sector accounted for 7.17 percent of GDP compared to 10.04 percent a year earlier. The non-oil sector went up 1.45 percent, after a 0.76 percent decrease in the previous period. 

Output expanded at a faster pace for: agriculture (4.23 percent compared to 3.06 percent in Q3); food and accomodation services (0.78 percent compared to 0.18 percent); electricity, gas, steam and air conditioning supply (16.03 percent compared to 11.46 percent);  water supply, sewerage, waste management and remediation (1.23 percent compared to 0.33 percent) and arts, entertainment and recreation (3.54 percent compared to 0.44 percent). Additionally, production rebounded for: manufacturing (0.14 percent compared to -2.85 percent); construction (4.14 percent compared to -0.46 percent) and internal trade (2.07 percent compared to -1.74 percent). Also, output recovered for transportation and storage (16.57 percent compared to -6.25 percent) and financial and insurance (0.22 percent compared to -5.96 percent). In addition, production fell at a softer pace for information and telecommunication (-1.46 percent compared to -4.48 percent); public administration (-0.45 percent compared to -0.72 percent); education (-1.04 percent compared to -1.22 percent) and social services (-0.38 percent compared to -0.85 percent). On the other hand, output growth slowed for mining and quarrying (7.96 percent compared to 25.44 percent). Also, real estate activities contracted further (-5.92 percent compared to -4.12 percent).

On a quarterly basis, the economy expanded 4.29 percent, easing from a 8.97 percent increase in the previous quarter. 

Considering 2017 as a whole, the Nigerian economy advanced 0.83 percent, after a 1.58 percent contraction in 2016.


Wednesday February 14 2018
Nigeria Inflation Rate Lowest in 19 Months
National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in Nigeria rose 15.13 percent year-on-year in January of 2018, easing from a 15.37 percent rise in the previous month and slightly above market expectations of 15.05 percent. It was the lowest inflation rate since April 2016 as cost grew less for food and non-alcoholic beverages, clothing and footwear and education.

The inflation rate has been steady falling since reaching more than 12 year high of 18.72 percent in January of 2017.

Year-on-year, prices advanced at softer pace for food and non-alcoholic beverages (18.9 percent compared to 19.4 percent in December); clothing and footwear (14.8 percent compared to 15.0 percent) and education (10.9 percent compared to 11.0 percent). On the other hand, prices went up faster for: transport (12.4 percent compared to 12.3 percent); health (11.5 percent compared to 11.4 percent) and miscellaneous goods and services (11.7 percent compared to 11.5 percent), restaurants and hotels (10.8 percent compared to 10.5 percent); recreation and culture (10.1 percent compared to 9.9 percent) and communication (3.9 percent compared to 3.5 percent). In addition, inflation was steady for housing and utilities (8.3 percent, the same as in December); furnishings and household equipment (13.7 percent) and alcoholic beverages, tobacco and kola (8.6 percent).

Annual core inflation which excludes price of volatile agricultural products remained unchanged, after a 12.10 percent increase in the previous month.

On a monthly basis, consumer prices rose 0.8 percent, following a 0.6 percent gain in December.


Tuesday January 16 2018
Nigeria Inflation Rate Falls to Lowest Since 2016
National Bureau of Statistics | Stefanie Moya | stefanie.moya@tradingeconomics.com

Consumer prices in Nigeria increased 15.4 percent year-on-year in December of 2017, following a 15.9 percent rise in the previous month and below market expectations of 15.8 percent. The inflation remained at its lowest level since April of 2016 and slowed for the eleventh consecutive month, as cost increased less mainly for food and non-alcoholic beverages and housing and utilities.

Year-on-year, cost rose at softer pace for food and non-alcoholic beverages (19.4 percent compared to 20.2 percent in November) with prices increasing the most for bread and cereals, potatoes, yam and other tubers, coffee, tea, cocoa, milk, cheese, eggs, fish, oil and fats. In addition, prices slowed for housing and utilities (8.3 percent compared to 8.4 percent); clothing and footwear (14.9 percent compared to 15.4 percent) and furnishings and household equipment (13.7 percent compared to 13.8 percent). Also, cost went up softer for education (11.0 percent compared to 11.4 percent); miscellaneous goods and services (11.5 percent compared to 11.7 percent); restaurants and hotels (10.5 percent compared to 10.6 percent); alcoholic beverages, tobacco and kola (8.6 percent compared to 8.7 percent) and recreation and culture (9.9 percent compared to 10.0 percent). On the other hand, prices advanced at a faster pace for health (11.5 percent compared to 11.4 percent) and communication (3.5 percent compared to 3.1 percent) and inflation was steady for transport (12.4 percent, the same as in November).

Annual core inflation which excludes price of volatile agricultural products increased to 12.10 percent from 12.21 percent in the previous month.

On a monthly basis, consumer prices rose 0.59 percent, slowing from a 0.78 percent increase in November.