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

Food Concepts Return NASD OTC Exchange to Danger Zone

Published

10 hours ago

05/12/2025

Adedapo Adesanya

By Adedapo Adesanya

Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.

Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.

This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.

Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.

Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.

At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.

InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.

Economy

Investors Gain N97bn from Local Equity Market

Published

10 hours ago

05/12/2025

Dipo Olowookere

By Dipo Olowookere

The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.

This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.

UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.

On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.

Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.

Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.

A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.

This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.

For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.

Economy

Naira Loses 18 Kobo Against Dollar at Official Market, N5 at Black Market

Published

10 hours ago

05/12/2025

Adedapo Adesanya

By Adedapo Adesanya

The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.

At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.

It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.

Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.

Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.

Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.

“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.

Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.

Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.

If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.

Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.