Economy

Growth in Money Supply Falls Below Targets

Published

8 years ago

19/09/2017

By FSDH Research

The monetary aggregates (narrow money and broad money) as at July 2017 show that the annualised growth rate in money supply is below the target that the Central Bank of Nigeria (CBN) has set for the year 2017. In Nigeria, narrow money supply (M1) is the sum of demand deposits and currency in circulation less the cash currency held in deposit money banks’ vaults.

Quasi money supply (QM) is the savings deposits plus time deposits. Broad money supply (M2) is the sum of M1 and QM (M2 = M1 + QM). The M2 decreased by 5.08% to N22.20trillion in July 2017 from N23.39trillion in December 2016. This is lower than the CBN’s growth target of 10.29% for the year 2017. The major drop in M2 is from M1, which dropped by 6.71% to N10.33trillion in July 2017, from N11.07trillion in December 2016.

The QM also dropped by 3.62% to N11.87trillion from N12.32trillion in December 2016. The need to maintain foreign exchange stability and to curb the high inflation rate in the country, which stood at 16.05% as at July 2017, were the main reasons the CBN adopted restrictive monetary policy stance.

According to the CBN, the net domestic credit increased marginally by 1.92% to N27.16trillion in July 2017 from N26.65trillion in December 2016.

The annualised growth rate in the net domestic credit in July 2017 was 3.29%, below the target growth rate of 17.93% for 2017. The net domestic credit to the Federal Government increased by 6.88% to N4.99trillion in July 2017 from N4.67trillion in December 2016. The net domestic credit to private sector also increased marginally by 0.87% to N22.17trillion in July 2017 from N21.98trillion in December 2016.

In another development, the Nigerian economy recorded a favourable trade balance for the third consecutive quarter in Q2 2017. According to the National Bureau of Statistics (NBS) the trade surplus stood at N506.5billion in Q2 2017. The total trade stood at N5.70trillion in Q2, 2017, an increase of 7.7% from N5.29trillion recorded in Q1 2017. Exports recorded an increase of 3.2% to N3.10trillion in Q2 2017, from N3trillion in Q1 2017. Imports on the other hand, increased by 13.5% to N2.60trillion in Q2, 2017, from N2.29trillion in Q1 2017. A further analysis of total trade by sector in Q2, 2017 shows that Crude Oil trade accounted for 42.57% (N2.42trillion) of total trade during the period. This was followed by the Other Oil sector, accounting for 21.90% (N1.24trillion).

The value of agriculture imports stood at N232.1billion in Q2, 2017, 16.01% higher than N200billion in Q1, 2017 and 61.02% higher than Q2, 2016 figure. Raw Materials imports increased by 17.4% to N298.84billion in Q2, 2017, from N246.35billion in Q1, 2017. Manufactured Goods imports also recorded a growth of 9.5% to N1.1trillion in Q2, 2017, compared with N995billion in Q1, 2017 but 18.33% lower than Q2, 2016 figure. Solid Minerals imports increased by 1,527.4% to N191.5billion in Q2, 2017, from N11.7billion in Q1, 2017, and 1,947.5% higher than Q2, 2016 figure.

On the exports side; Agriculture exports stood at N29.71billion in Q2, 2017, a marginal decrease of 1.03% from N30.02billion in Q1, 2017 but 94.05% higher than Q2, 2016 figure. Raw Materials exports increased by 31.76% to N21.76billion in Q2, 2017, from N14.85billion in Q1, 2017.

Manufactured Goods exports decreased by 16.98% to N81.5billion in Q2, 2017, from N95billion in Q1, 2017. Solid Minerals exports decreased by 27.58% to N3.06billion in Q2, 2017, from N4.24billion in Q1, 2017 but 122.01% higher than Q2, 2016 figure. We expect foreign trade to remain favourable for Nigeria for the rest of 2017.

The CBN may maintain the current tight monetary policy stance until there is sustainable stability in the foreign exchange market. There are opportunities for revenue and exports diversification from the developments of solid minerals and agriculture sectors to meet the consumers’ and industrial sectors’ in Nigeria. Agriculture can supply the raw material requirements of the manufacturing sector if there are appropriate policies to increase production and quality of yields. More job opportunities and additional revenue will also be generated through the linkage between agriculture and manufacturing sectors.

Economy

Nigerian Stocks Close 1.13% Higher to Remain in Bulls’ Territory

Published

6 hours ago

20/12/2025

Dipo Olowookere

By Dipo Olowookere

The local stock market firmed up by 1.13 per cent on Friday as appetite for Nigerian stocks remained strong.

Investors reacted well to the 2026 budget presentation of President Bola Tinubu to the National Assembly yesterday, especially because of the more realistic crude oil benchmark of $64 per barrel compared with the ambitious $75 per barrel for 2025. This year, prices have been between $60 and $65 per barrel.

Business Post observed profit-taking in the commodity and energy sectors as they respectively shed 0.14 per cent and 0.03 per cent.

But, bargain-hunting in the others sustained the positive run, with the consumer goods index up by 3.82 per cent.

Further, the industrial goods space appreciated by 1.46 per cent, the banking counter improved by 0.08 per cent, and the insurance industry gained 0.04 per cent.

As a result, the All-Share Index (ASI) increased by 1,694.33 points to 152,057.38 points from 150,363.05 points and the market capitalisation chalked up N1.080 trillion to finish at N96.937 trillion compared with Thursday’s closing value of N95.857 trillion.

A total of 34 shares ended on the advancers’ chart, while 24 were on the laggards’ log, representing a positive market breadth index and bullish investor sentiment.

Austin Laz gained 10.00 per cent to close at N2.42, Union Dicon also jumped 10.00 per cent to N6.60, Tantalizers increased by 9.80 per cent to N2.69, Aluminium Extrusion improved by 9.78 per cent to N12.35, and Champion Breweries grew by 9.71 per cent to N16.95.

Conversely, Sovereign Trust Insurance dipped by 7.42 per cent to N3.87, Royal Exchange lost 6.84 per cent to trade at N1.77, Omatek slipped by 6.84 per cent to N1.09, Eunisell depreciated by 5.88 per cent to N80.00, and Eterna dropped 5.63 per cent to close at N28.50.

Yesterday, traders transacted 1.5 billion units worth N21.8 billion in 25,667 deals compared with the 839.8 million units sold for N32.8 billion in 23,211 deals in the preceding session, showing a surge in the trading volume by 76.61 per cent, an uptick in the number of deals by 10.58 per cent, and a shrink in the trading value by 33.54 per cent.

Economy

FrieslandCampina, Two Others Erase N26bn from NASD OTC Bourse

Published

8 hours ago

20/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Three stocks stretched the bearish run of the NASD Over-the-Counter (OTC) Securities Exchange by 1.21 per cent on Friday, December 19, with the market capitalisation giving up N26.01 billion to close at N2.121 billion compared with the N2.147 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropping 43.47 points to 3,546.41 points from 3,589.88 points.

The trio of FrieslandCampina Wamco Nigeria Plc, Central Securities Clearing System (CSCS) Plc, and NASD Plc overpowered the gains printed by four other securities.

FrieslandCampina Wamco Nigeria Plc lost N6.00 to sell at N54.00 per unit versus N60.00 per unit, NASD Plc shrank by N3.50 to N58.50 per share from N55.00 per share, and CSCS Plc depleted by N2.91 to N33.87 per unit from N36.78 per unit.

On the flip side, Air Liquide Plc gained N1.01 to close at N13.00 per share versus N11.99 per share, Golden Capital Plc appreciated by 70 Kobo to N7.68 per unit from N6.98 per unit, Geo-Fluids Plc added 39 Kobo to sell at N5.50 per share versus N5.11 per share, and IPWA Plc rose by 8 Kobo to 85 Kobo per unit from 77 Kobo per unit.

During the trading day, market participants traded 1.9 million securities versus the previous day’s 30.5 million securities showing a decline of 49.3 per cent. The value of trades went down by 64.3 per cent to N80.3 million from N225.1 million, but the number of deals jumped by 32.1 per cent to 37 deals from 28 deals.

Infrastructure Credit Guarantee Company (InfraCredit) Plc finished the session as the most active stock by value on a year-to-date basis with 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units traded for N4.9 billion.

The most active stock by volume on a year-to-date basis was still InfraCredit Plc with 5.8 billion units worth N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.

Economy

Naira Crashes to N1,464/$1 at Official Market, N1,485/$1 at Black Market

Published

10 hours ago

20/12/2025

Adedapo Adesanya

By Adedapo Adesanya

It was not a good day for the Nigerian Naira at the two major foreign exchange (FX) market on Friday as it suffered a heavy loss against the United States Dollar at the close of transactions.

In the black market segment, the Naira weakened against its American counterpart yesterday by N10 to quote at N1,485/$1, in contrast to the N1,475/$1 it was traded a day earlier, and at the GTBank forex counter, it depreciated by N2 to settle at N1,467/$1 versus Thursday’s closing price of N1,465/$1.

In the Nigerian Autonomous Foreign Exchange Market (NAFEX) window, which is also the official market, the nation’s legal tender crashed against the greenback by N6.65 or 0.46 per cent to close at N1,464.49/$1 compared with the preceding session’s rate of N1,457.84/$1.

In the same vein, the local currency tumbled against the Euro in the spot market by N2.25 to sell for N1,714.63/€1 compared with the previous day’s N1,712.38/€1, but appreciated against the Pound Sterling by 73 Kobo to finish at N1,957.30/£1 compared with the N1,958.03/£1 it was traded in the preceding session.

The market continues to face seasonal pressure even as the Central Bank of Nigeria (CBN) is still conducting FX intervention sales, which have significantly reduced but not remove pressure from the Naira. Also, there seems to be reduced supply from exporters, foreign portfolio investors and non-bank corporate inflows.

President Bola Tinubu on Friday presented the government’s N58.47 trillion budget plan aimed at consolidating economic reforms and boosting growth.

The budget is based on a projected crude oil price of $64.85 a barrel and includes a target oil output of 1.84 million barrels a day. It also projects an exchange rate of N1,400 to the Dollar.

President Tinubu said inflation had plunged to an annual rate of 14.45 per cent in November from 24.23 per cent in March, while foreign reserves had surged to a seven-year high of $47 billion.

Meanwhile, the cryptocurrency market was dominated by the bulls but it continues to face increased pressure after million in liquidations in previous session over accelerating declines, with Dogecoin (DOGE) recovering 4.2 per cent to trade at $0.1309.

Further, Ripple (XRP) appreciated by 3.9 per cent to $1.90, Cardano (ADA) rose by 3.5 per cent to $0.3728, Solana (SOL) jumped by 3.4 per cent to $126.23, Ethereum (ETH) climbed by 2.9 per cent to $2,982.42, Binance Coin (BNB) gained 2.0 per cent to sell for $853.06, Bitcoin (BTC) improved by 1.7 per cent to $88,281.21, and Litecoin (LTC) soared by 1.2 per cent to $76.50, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.