The National Bureau of Statistics (NBS) recently released the Revised GDP for 2011 and estimates for 2012. The executive summary is below:

Overall GDP Estimates (Revised 2011 and estimates of Q1 – Q4 of 2012)

On an aggregate basis, the economy when measured by the Real Gross Domestic Product (GDP), grew by 6.99% in fourth quarter of 2012 as against 7.76% in the corresponding quarter of 2011. This was also slightly lower than the initial forecast for the fourth quarter of 2012 at 7.09%. Relative to the third quarter of 2012, the economy experienced an uptick as growth increased by 0.44 percentage points from the 6.48% recorded in the third quarter of 2012.

The nominal GDP for the fourth quarter of 2012 was estimated at 10,593,714,64 million naira as against the 9,554,854.69 million naira during the corresponding quarter of 2011. The economy, which can be broken into two broad output groups, that is, Oil and Non-oil sectors, had both sectors witnessing decreased output in the fourth quarter of 2012. The non-oil sector growth was driven by growth in activities recorded in the building & construction, cement, hotel and restaurant, and electricity sectors.

Oil Sector
The average daily production was 2.14 million barrels per day in fourth quarter of 2012 as supplied by NNPC as against 2.44 million barrels per day in the corresponding quarter in 2011. These figures, with their associated gas components, resulted in a growth rate, in real terms of -0.79% in oil GDP in the fourth quarter of 2012 compared with the -0.08% for the corresponding period in 2011. Production in this sector was also in a decline compared to the third quarter of 2012. In the third quarter, the sector grew by of 0.08% as against –0.79 pecent recorded in the fourth quarter as was earlier stated. G

The Nigerian oil sector had witnessed levels of disruptions due to facility shut downs. For example, the activities of vandals and oil theft has affected production of Bonny Light and Forcados grades as well as Qua Iboe crude oil production. However, the sector also benefited immensely from the relative stability in international crude oil market price and the exchange rate of naira against the dollar. The Oil sector contributed 12.59% to real GDP in the fourth quarter of 2012, lower than the 13.57% recorded in the corresponding quarter in 2011. Again, the contribution of this sector was relatively lower compared to third quarter of 2012 where the sector contributed 13.42%.

Non-oil sector
The Non-oil sector continued to be a major driver of the economy. On a year-on-year basis, growth in the sector was marginally lower by 0.89 percentage points as the sector recorded 8.21% growth in real terms in the fourth quarter of 2012 compared with 9.10% at the corresponding period in 2011. Relative to the third quarter of 2011 however, growth was marginally higher as this sector recorded a growth rate of 7.55% during the period. The growth in the Non-oil sector decreased in the fourth quarter of 2012 when compared with the corresponding quarter of 2011. This decline was largely attributed to decline in activities in the Wholesale & Retail trade and Real Estate.

In furtherance to the earlier information provided in our third quarter GDP reports several assessments of the effect of flooding that occurred in year 2012, indicates that agricultural activities which comprise of crop production, Livestock, Fishing, forestry were affected in varied degrees. The impact especially on crop production was unevenly distributed across farms of different crop types. The moderated effect of the flood on crop were witnessed was because some crops were harvested already be fore the flood while others were to be planted after the flood receded. Most of the major crop are planted across most of the states in Nigeria as a result of which actual losses from affected state, were supplemented by production in the state that were not adversely affected. The fourth quarter GDP for 2012 is a reflection of the above scenario In terms of output, the real agricultural GDP growth in the fourth quarter of 2012 stood at 3.62% , a decline from the 5.68% in the corresponding period of 2011. The growth in this sector was also relatively lower that the growth rate of 3.89% in the third quarter of 2012.

Finance & Insurance
The Finance and Insurance sub-sector comprises banking, insurance, pension and stockbroking firms. These firms operate in the various segments of the financial markets such as money market, capital market and the foreign exchange market. They play prominent role in ensuring an efficient financial intermediation in the economy. This sector recorded a growth of 3.48% in the fourth quarter of 2012 compared with the 3.42% recorded in same period of 2011, The increased in growth of the sector was traceable to the vibrancy in the financial sector driven by increased facilities (products/ services) as well as the continued favourable investment yields in the bond market which has favoured key players in the industry especially pension fund managers, banks and insurances firms. Increased activities in the bond market has increased the vibrancy in business activities in the sector. Relative to the third quarter of 2012, growth in the sector slightly slower growth as growth in sector was lower by 0.60 percentage points from the 4.08% recorded in the third quarter of 2012.

Wholesale and Retail Trade
This sector recorded a real GDP growth of 10.81% and a contribution of 20.61% in the quarter under review as against 11.92% growth and 19.88% contribution to GDP recorded in corresponding quarter in 2011. Compared to the third quarter of 2012, the sector recorded a decline of 1.11 percentage points as 9.62% was recorded in that quarter. The decline is attributable to a number of factors which include decline in corresponding sectors (Agriculture, Other Manufacturing, Petroleum products) which are key inputs in the Wholesale and retail trade sector. Nevertheless, the sector is still a major driver of the economy.

Telecommunications and Post
This sector which used to suffer from absence of competition, abuse of monopoly in the market during the NITEL era is now with alternative options (Telecommunication ) for the consumers. This sector is playing pivotal role in the growth of many other sectors through its intensive marketing strategy and value added services. The data services is contributing tremendously to the growth of the sector. The sector recorded a real GDP growth of 32.44% in fourth quarter of 2012 as against 36.39% recorded in corresponding period in 2011. The decline in growth recorded in this sector was attributable to the declining quality of service due to economic inefficiencies or operational restructuring on the part of operators. The sector performed better in the fourth quarter relative to the third quarter of 2012 as there was a slight up tick of 0.87 percentage points from the 31.57% recorded in the third quarter of 2012.

During the third quarter of 2012, manufacturing activities increased relative to the same period in 2011. It recorded an increase in growth rate from 7.63% in fourth quarter of 2011 to 7.70% in the review period in 2012 as shown in Figure 12. The development is traceable to a number of factors which include. Stead improvement in power supply increase production in cement industry and value-chain policy of the government towards some production sectors.

Real Estate
The sector is characterised by two major classes of properties:-, the low end and the high end. The low end being places of low development which are driven by investments from individuals and few corporate bodies mostly in form of residential buildings, while the high end comprises of those areas where aggressive and high valued investments into real estate properties are made. The situation at the high end areas is a decreasing demand situation. However, investments from individuals and some corporate entities still trickle into the low end of the sector. The situation is that this sector is driven by the activities in the low end. The growth recorded in the sector stood at 11.09% in the fourth quarter of 2012 compared with 11.16% in corresponding period of 2011, a relative decline of –0.07 percentage points. The sector performed better in the fourth quarter relative to the third quarter of 2012 as there was an appreciation of 0.85 percentage points from the 10.24% recorded in the third quarter of 2012.

Business and Other services
The increase in growth recorded in the fourth quarter of 2012 relative to its performance in the fourth quarter of 2011 in Business and Other Services was traceable to the higher consumer demands. The sector recorded a real GDP growth of 10.46% in the fourth quarter of 2012 compared to 9.81% recorded in the corresponding quarter of 2011. Growth in this sector was also relatively higher than rates recorded in the third quarter of 2012 by 1.35 percentage points, as the sector grew by 9.11% during the third quarter. GDP Estimates for 2011, Q1 – Q3, 2012.

You can download the full report here.

Courtesy of Afrinvest and FSH, here are the performance stats and reports for the NSE for the past week.

basic stats


basic stats-2

The best and worst performing stocks were:

best and worst

The reports are below:


NSE Weekly Report - Afrinvest - March 1 2013 (983).

NSE Weekly Report - FSDH - March 1 2013 (973)

It’s Been A Long Time

In: News

5 Mar 2013

I apologize for not posting anything in over 5 months now.

Henceforth, you can expect regular posts on the website. I will be posting reports for the Nigerian Stock Exchange for the previous week on Mondays. Economic updates will be posted on Wednesdays and company results for the week will be posted on Fridays.

FSDH recently released their analysis/review of the Nigerian economy for the first half of the year and their outlook for the rest of the year.

Below is their summary. And you can read the full report below.

2012 So Far…
Food Prices
According to the Food and Agriculture Organization (FAO), the FAO Food Price Index (FFPI), which measures the monthly change in international prices of a basket of food commodities averaged 201 points in June 2012, down by 1.8% from a slight upward revision in May value of 205 points, and still the lowest since September 2010.

According to the organization, continued economic uncertainties and generally adequate supply prospects kept international prices of most commodities under downward pressure. The decline in the global food prices had a moderating effect on inflation rate across regions in the first half of the year. The rising inflation rate in Nigeria was due to home grown structural issues.

Nigerian Economy: GDP
Available data from the National Bureau of Statistics (NBS) shows that the Real Gross Domestic Product (GDP) in Nigeria grew by 6.17% in Q1 2012, compared with 7.13% recorded in Q1 2011. The NBS noted that the growth rate surpassed its previous forecast of 5.34%, which indicated that the economy is more resilient than otherwise anticipated.

The observed decline in Q1 2012 real GDP figure was due mainly, to the partial removal of subsidy on petrol, subsequent civil unrest and weaker consumer demand following the higher price levels across major segments of the economy. Higher cost of production and prevailing security concerns also contributed to the decline in growth rate of real GDP during the period. Oil nominal GDP accounted for 44.02%, while non-oil nominal GDP contributed 55.98%.

The Nigerian economy as measured by the real GDP growth rate has been decelerating since the beginning of 2011 in the face of high unemployment rate currently at 23.90%. Various factors have been given for the declining growth rate. Some of which are: the poor infrastructure in the economy; security challenges in the country which has reduced free mobility of goods and people; vandalism of petroleum pipelines in the country; weak purchasing power and high interest rates regime in the economy. We appreciate the fact that some of the factors causing the declining GDP growth rate may not be addressed by pure monetary policy tools, but a relaxed monetary policy stance may improve the situation to prevent Nigeria from joining the league of countries already in recession.

Nigeria’s Foreign Trade Statistics
Foreign Trade Statistics published by the National Bureau of Statistics (NBS) released on June 5, 2012 indicated that the total value of merchandise trade for the Nigerian economy in Q1 2012 stood at N6.62trn, representing an increase of 4.69%, compared with N6.33trn recorded during Q1 2011. A cursory look at the foreign trade statistics shows that exports accounted for N4.97trn or 75.05%, while imports accounted for N1.65trn or 24.95%. Hence, there was a trade surplus of N3.32trn in Q1 2012, representing a significant increase of 2911.17% over the N110.17bn recorded in Q1 2011. An analysis of import by region shows that the highest import was recorded from Asia with an import value of N617.70bn (37.40%), Europe: N537.10bn (32.50%), Americas: N395bn (23.90%) and Africa: N59bn (3.60%). While an analysis of export by region shows that Europe recorded the highest contribution of N1.82trn (36.60%), Americas: N1.39trn (27.90%), Asia: N1.14trn (22.40%) and Africa N535bn (10.80%). India was Nigeria’s largest destination for exports in Q1 2012 at N688.50bn, made up of N626.01bn oil exports and N62.52bn non-oil exports. With respect to import destination China, United States of America, United Kingdom, Brazil and India, in that order, were Nigeria’s largest import destinations. However, Nigeria recorded a favourable balance of trade (BOT) between 2009 and 2011.

Telecommunications Industry
According to the Nigerian Communications Commission (NCC), the installed capacity in the telecommunications industry as at April 2012 stood at 199,639,372 lines, an increase of 14.98% over 173,631,441 lines as at December 31, 2011. The installed capacity is made up of Mobile Global Systems Mobile (GSM), Mobile Code Division Multiple Access (CDMA) and Fixed wired/wireless in the proportion of 84.93%, 9.75% and 5.32%, respectively. FSDH Research maintains that the internet usage per head in Nigeria at 5% is very low and telecoms operators can develop products to bridge the gap. This is where the next level of growth will come from in telecommunications in Nigeria.

Crude Oil
The OPEC Reference Basket (ORB) declined for the third consecutive month in June to US$93.98/b, representing a decline of 13%, the largest month-on-month loss since December 2008. Besides the current economic climate in the Euro-zone area, the main factors responsible for the decline in the Basket value were abundant crude oil supplies and speculators who increasingly sold off long positions. OPEC opined that unsteady pace of the global economic recovery is causing a great amount of uncertainty on oil demand; and it expects the second half of the year to experience more uncertainty. In 2012, demand for OPEC’s crude is expected to average 29.9mb/d, representing a marginal decline of 0.1mb/d from 2011.

External Reserves
According to Central bank of Nigeria (CBN), Nigeria’s external reserves position as at June 29, 2012 stood at US$36.72bn, representing an increase of 15.15%, compared with US$31.89bn as at June 30, 2011 while it grew by 11.54% from US$32.92bn as at end-December 2011. However, the reserves position has been under threat since May 2012 due to the downward spiral in international price of oil arising from concerns about the prospects of the global economy, and the withdrawal of funds by foreign investors from the government securities market on concerns about inflationary pressure and security challenges in the country.

Public Debt
Available data from the Debt Management Office (DMO) shows that Nigeria’s total debt stock (addition of external and domestic debts) as at March 31, 2012 stood at N6,889bn representing an increase of 5.82% from the December 31, 2011 figure of N6,510bn. A breakdown of the debt stock shows that external debt accounted for 13.39% of the total debt stock at N922.40bn, while domestic debt stock accounted for 86.61% of the total debt stock at N5,967bn. The total public debt stock in the country as at December 2011 is estimated at about 17.50% of the GDP, as against the applicable critical limit of 40% for countries in Nigeria’s economic peer group.

External Debt
The total external debt stock is estimated at about 2.39% of the GDP as at December 2011. The breakdown of the external debt in 2011 showed that 83.28% was owed to Multilaterals, which includes the World Bank Group, International Fund for Agricultural Development (IFAD), African Development Bank Group (ADB), International Development Bank (IDB) and Economic Development Fund (EDF); 8.26% was owed to Non-Paris Group of creditors and 8.46% was owed to others. An analysis of Nigeria’s external debt by holder type indicate that the Non-financial Public (FGN & States and Government Parastatals) held 87.27% (US$4.95bn); while the Financial Public (Banks & Non-banks) held 12.73% (US$721mn) of the total external debt of US$5.67bn as at December 31, 2011.

Domestic debt
The ratio of domestic debt stock to GDP as at December 31, 2011 is estimated at 15.11%. The breakdown of the total domestic debt stock by instrument type as at March 31, 2012 shows that the FGN Bonds accounted for N3,665.85bn representing 61.44%; Nigerian Treasury Bills (NTBs) accounted for N1,947.19bn, representing 32.63% and Treasury Bonds (TBs) accounted for N353.73bn, representing 5.93%. An analysis of Nigeria’s domestic debt by holder type indicate that the Non-financial Public (FGN-Sinking Fund) held 2.61% (N146bn); Other Non-Financial (Non-bank) held 23.77% (N1.34trn); CBN : 6.20% (N348.84bn), while Banks & Discount Houses held 67.42% (N3.79trn) of the total domestic debt of N5.62trn as at December 31, 2011.

The Composite Consumer Price Index (CCPI) for the month of June 2012, released by the National Bureau of Statistics (NBS), showed that inflation rate year-on-year (y-o-y) in Nigeria moved upward to 12.9% in June 2012 from 12.7% recorded in the month of May 2012. On a monthly basis, the CCPI was higher by 1.15% in June 2012 compared with May 2012. Year-on-year core inflation (all items less farm produce and energy) stood at 15.19% in June from 14.54% in May 2012. The NBS noted that the increase in the y-o-y inflation could be partly attributable to persistent increase in the  prices of some farm produce such as yam tubers as well as the increase in the electricity tariff; in addition to the increase in the cost of some other recreation and sporting services, catering services, and miscellaneous services. Earlier, the NBS released an inflation rate forecast of 13.57% to end the year.

Financial Market
FGN Bonds
The Debt Management Office (DMO) is currently working with the primary market dealers in the bond market in Nigeria to switch bonds with short term maturity to long term maturity in order to restructure the FGN financial obligation in favour of long term maturity. Comparing tenor to tenor, the 3-year, 5-year & 10-year FGN Bonds issued in HY1 2012 received higher average marginal rates than those issued in HY1 2011.

Equity Market
The NSE ASI pattern during the period shows that the market responds to earnings and corporate benefits. The developments in the Nigerian macroeconomic environment also impacted the market. The NSE ASI closed HY1 2012 at 21,599.57 points, up from 20,730.63 points as at December 31, 2011, representing an appreciation of 4.19% (a gain of 4.68% in US$), against the appreciation of 0.85% in HY1 2011. The market capitalization gained 5.55% (a gain of 6.04% in US$) to close HY1 2012 at N6.53trn (US$44.22bn), compared with the gain of 0.93% in HY1 2011 at N7.99trn. The difference in the rate of change between the NSE ASI and Market Capitalization was due to new and supplementary listings in the period under review. All the FSDH Indices appreciated in values in HY1 2012 except the FSDH Manufacturing & Allied Index which lost marginally by 0.57%. FSDH 40 Nigeria Equity Value Index (NEVI) appreciated by 0.92% while the FSDH Banking Index gained 8.17%. A cursory look at some of the World Stock market performance in June 2012, compared to Nigeria, shows that the Cairo SE Gen (Egypt) was the best performing market among the selected markets.

Money Market and Fixed Income Securities
The restrictive monetary policy stance of the Central Bank of Nigeria (CBN) kept money market rates high during the first half of the year 2012. The CBN argued that its monetary policy stance continued to be influenced by the near-to-medium term inflationary pressure in the Nigerian economy and the somewhat return of excessive demand pressure at the foreign exchange market. A total of about N1,869.50bn was injected into the money market from the monthly statutory allocation and excess crude account in the first six months of 2012.

A cursory look at the Nigerian Inter-Bank Offered Rate (NIBOR) showed that there was upward pressure in the average inter-bank rates during the  period under review, compared with the corresponding period in 2011. The upward pressure in the rates was due to the continued restrictive monetary policy stance of the CBN.

Treasury Bill Transactions
The CBN employed the use of OMO as an effective monetary policy tool to regulate the monetary conditions in the first half of the year. Funds were attracted to this segment of the market as it offered attractive yields to investors, in addition to the fact that it carries minimal risk.

Foreign Exchange Market
The analysis of the transactions in the official foreign exchange market in the first six months of 2012 showed that both the volume of offer and sales were lower than the volume offered and sold in the corresponding period of 2011. The subdued demand in the market, and the readiness of the CBN to meet genuine demand, led to an appreciation in the value of the Naira at both the official and parallel markets. Meanwhile, there was demand pressure in June following the exit of some foreign portfolio investors from the fixed income securities market.

Revised Outlook for 2012
The World Economy
The highlights of the latest revised consensus from international organisations such as the IMF, OPEC and World Bank on the outlook of the world economy in the remainder of 2012 are:
– Looking at the world economic growth rate in 2012, IMF projects 3.5% and OPEC projects 3.3%, while the World Bank projects 2.5%. The IMF’s projection is lower than the estimated growth rate of 4.5% in 2012 released in the WEO April 2012 Edition.
– The IMF asserts that downside risks to the weaker global outlook continue to loom large. The most immediate risk is still that delayed or insufficient policy action will further escalate the Euro-area crisis; while downside risks to growth in emerging and developing economies seem primarily related to external events in the short-term.
– The world oil demand in 2012 is projected at 88.7mb/d. OPEC crude demand is projected to average 29.9mb/d. Meanwhile, the Non-OPEC supply is projected at 53.1mb/d.
– The IMF stated that Sub-Saharan Africa is expected to grow by 5.4% and 5.3% in 2012 and 2013, respectively, while according to the World Bank, Nigeria is projected to grow by 7%, 7.2% and 6.8% in 2012, 2013 and 2014 respectively.
– The revised projection for the oil price in 2012 is US$101.80/b based on future markets.

The Nigerian Economy
In addition to the import substitution strategy of the Federal Government of Nigeria (FGN) as outlined in the 2012 Budget Speech, the major events that will shape economic development in the remaining part of 2012 are:
– The deregulation of the downstream sector of the oil & gas Industry and the passage of the Petroleum Industry Bill (PIB) into law.
– The privatisation of the Power Holding Company of Nigeria (PHCN) in order to improve electricity generation, transmission and distribution in the country. The recent signing of a management contract between the Federal Government and a Canadian firm, Manitoba Hydro International of Canada for the management of the Transmission Company of Nigeria, is a step in the right direction.
– The security challenges in the country.
– The monetary policy stance of the CBN.

The World Bank and the IMF released a robust growth rate of 7% and 7.1% respectively for Nigeria in 2012. Looking at how the security challenges in the country and the restrictive monetary policy stance of the CBN will impact the economy, FSDH Research is inclined to review our upper limit of the GDP growth forecast downward to 7% from 7.5% in 2012. Thus our GDP growth rate forecast ranges between 6.5% – 7%.

In the short term, the outlook for inflation will be influenced by the anticipated increase in PHCN tariff, increase in import duties in wheat and rice, the prices of food in the international market, fiscal expansion, and supply shortages in the country due to low production, amongst others. However, the expected moderation in global commodities prices will lower the impact of imported inflation. Thus we expect inflation rate to hover around 12.5% – 13.20% to end the year.

With the price of Bonny Light at about US$100/b, we expect Nigeria’s foreign reserves to increase by about 17.10% to US$38.55bn which should be sufficient to finance about five months of imports cover. Also, given the price of oil at about US$100/b there may not be need for the FGN to grow its debt portfolio excessively, but may grow it aggressively if oil price fall sharply. We expect oil price to remain somewhat high, thus we think public debt will only grow by about 6.53% in 2012 to about N7.34trn. The growth in debt will partly be driven by the current high interest rate that government is paying on its domestic debt. The debt to GDP is expected to be in the region of 18.03%. Nigeria should maintain a relatively stable  exchange rate in 2012. The possibility of marginal depreciation cannot be ruled out. We expect the exchange rate in the region of N158.50/US$1 to end the year.

Fixed Income Securities
Reviewing the macroeconomic developments around the globe and Nigeria in particular in the last few months and the short to medium term outlook, there are evidences to suggest that the MPC should change its monetary policy stance in favour of monetary easing in the short to medium term. This is with the intention to boost economic activities and stimulate the current weak purchasing power arising from the high unemployment rate of 23.90% and the recent economic policies of the government. Restrictive monetary policy as adopted in the last one and half years has not been effective in achieving price stability.

It appears that the Monetary Policy Committee (MPC) will maintain the current monetary policy stance for the remainder of the year. Thus we expect the following to take place in the money and fixed income securities market within the next 6 months: ? Maintain the Monetary Policy Rate (MPR) at  12% and the interest rate corridor around the current level.
– Maintain the current Net foreign exchange Open Position (NOP) at the current rate of 1% until there is an appreciable increase in the external reserves
– Maintain the Cash Reserve Ratio (CRR) and the Liquidity Rate at 12% and 30% respectively.
– Aggressive use of OMO to mop up liquidity

Equities Market
Although there are some challenges which may adversely impact the market, we are of the opinion that the equities market will show better performance in the second half of the year. The equities market in HY2 2012 will be impacted by the following factors:
– Improved Q2 and Q3 earnings from the quoted companies
– Expectations of good full year earnings and corporate benefits
– The pro-active measures being put in place by the Listing, Sales and Retention Unit of the NSE, which would help to attract and retain quoted companies’ interest in the market
– Adoption of the International Financial Reporting Standard (IFRS); which will engender better disclosure in financial reports

Therefore we are inclined to revise upward our earlier forecast. We think the NSE ASI has the capacity to achieve a growth rate of 11.58% in the second half of the year. This will lead to a growth of 17.77% for the year 2012. Thus our forecast NSE ASI is 17.77% to end the year 2012. This will generate NSE ASI of 36,852.84points.

FSDH - HY2 2012 Economic and Financial Review (1607)

Courtesy of Cordros Capital, here are the best and worst performing stocks on the Nigeria Stock Exchange in the first half of the year.



The National Bureau of Statistics recently released their outlook for the Nigerian economy through 2015. Here is the Executive Summary:

In its second year of economic projections, the NBS is also evolving in its approach to forecasting by employing an econometric model to augment  results from the traditional methods of surveys and its system of administrative statistics. A Bayesian Vector Autoregressive (BVAR) model is employed to provide a baseline forecast for Gross Domestic Product (GDP), inflation and the value of total trade. Adjustments are made to incorporate the effect of the nationwide strike that occurred in the early part of January 2012, as well as the shock to the economy due to the partial repeal of the subsidy on Premium Motor Spirit (PMS).

In 2012, the Nigerian economy measured by real GDP is projected to grow at 6.50 percent, a decline in the annual growth rate compared to 2011. However, in 2013, the economy is projected to grow at a faster pace as the effects due to the partial repeal of the PMS subsidy are expected to dissipate. The economy is expected to grow at a respectable rate of 7.43 percent in 2014 and 7.25 percent in 2015.

In 2012, inflation is projected to rise to 13.57 percent due, to some extent, to the higher price levels in the economy following the partial removal of the PMS subsidy. The BVAR model also indicates inflation rates of 12.21 percent in 2013, 12.04 percent in 2014 and 11.91 percent in 2015. It is important to note that these projected rates also depend on the responses of the Central Bank of Nigeria (CBN) through monetary policy which has set its sights on single digit inflation. In fact, the moderation in price levels in 2011 could be partially attributed to the decisions by the CBN during the period.

The Value of Total Trade for the country is expected to decline in by 11.03 percent in 2012. This is expected to be partly due to the import ban on certain food products that took effect in 2011. The decline could also be due to a decline in crude oil exports possibly due to supply disruptions that occurred during 2011. Further out into the near term, the value of total trade is expected to rebound in 2013 to 11.25 percent, followed by 20.6 percent in 2014 and 16.44 percent in 2015.

In conclusion, while shocks in the early part of 2012 may have marginally slowed economic growth, the economy is expected to rebound in 2013 and grow at respectable trends in 2014 and 2015. The projected growth rates in this report may be further accelerated due to economic reforms expected to kick-in in the near future. As the current Administration is looking to reform key sectors such as agriculture and power, coupled with increased public (capital) expenditure, these are likely to put the economy on a higher growth path.

Here is the chart of their GDP projections:

You can read the full outlook below.

National Bureau of Statistics - Nigerian Economic Projections - 2012 - 2015 (1678)

The CPI and Inflation figures for April 2012 were recently released by the National Bureau of Statistics.Inflation rate rose to 12.9% year-on-year in April 2012 while the composite CPI was 0.13% higher than March 2012.

Importantly, the calculation has been rebased to 2009. The summary of the report is below. You can also download the report below.

The Composite Consumer Price Index which measures inflation rose to 12.9 percent year-on-year in April 2012. The higher year-on-year change could be partly attributable to base effects as the index was relatively more stable in April of 2011. This is because lower price levels in April 2011 will reflect higher year-on-year percentage changes in April of 2012. On a monthly basis, the composite CPI was higher by 0.13 percent when compared with March 2012, as prices moderated in April. The increase in the headline index, composed of the core and food indices, was partially due to the higher price levels in the economy. However, this was moderated by lack of constant liquidity in the economy.

The urban inflation rate was recorded at 13.4 percent year-on-year while the rural figure was reported to be 12.4 percent for April 2012. The urban All Items index increased by 0.3 percent on month-on-month, while the corresponding rural index increased marginally by 0.01 percent, when compared with the preceding month.

The percentage change in the average composite CPI for the twelve-month period ending April 2012 over the average of the CPI for the previous twelve-month period was 11.1 percent, up slightly from the 10.9 percent recorded in the preceding month. The corresponding 12-month year-on-year average percentage change for urban and rural indices were 10.3 percent and 11.7 percent respectively.

In April, the level of the Composite Food Index was higher than the corresponding level a year ago by 11.2 percent. Compared with March 2012, average monthly food prices rose in April 2012 by 0.2 percent. The rise in the food index while moderate was mainly due to marginal increases of most food classes, for instance, bread and cereals, meat, and fish, as well as the increasing cost of other food products especially yams and other tubers as they have become relatively scarce due to the drawdown from the end of year harvest. The average annual rate of rise of the index remained at 10.3 percent (year-on-year) for the twelve-month period ending April 2012.

The “All items less Farm Produce” index which excludes the prices of volatile agricultural products rose by 14.7 percent year-on-year, while the average 12 month annual rate of rise of the index was 12.2 percent for the twelve-month period ending April 2012. The rise in the “Core” index could be attributable to higher price levels in major divisions that compose the index. On a month-on-month basis, the core index increased marginally by 0.1 percent in April 2012.


Naitonal Bureau of Statistics - Nigeria\'s CPI and Inflation Figures - April 2012 (1064)

Courtesy of FSDH, here are the statistics from the NSE from the week ended April 13th 2012:

And here is the report:

NSE Weekly Report - FSDH - April 13th 2012 (1087)

The Nigeria Bureau of Statistics recently published the CPI and Inflation figures for January 2012. The summary of the report is below.

The Composite Consumer Price Index which measures inflation rose sharply to 12.6 percent  year-on-year  in  January  2012.  This  figure  is  2.2 percentage  points  higher than  10.3  percent  recorded  in  the  previous  month.  The  monthly  composite  CPI rose  significantly  by  3.4 percent  when  compared  with  December  2011.    The increase in the headline index, composed of the “Core” and Food indices, was due to  the partial  removal  of  the  subsidy  on  the  Premium  Motor  Spirit  (petrol)  that pushed  up  prices  of  many  food  and non-food  items  as  a result  of  the increase in transportation costs.

The urban inflation rate recorded a sharp increase when compared with the rural figure in January 2012. The year-on-year increase for Urban and Rural dwellers was 16.4 and 9.7 percent respectively.  The urban All Items index rose by 5.3 percent on month-on-month,  while  the  corresponding rural  index  increase  by  1.8  percent when compared with their preceding month. The inflationary impact of the partial subsidy removal was therefore largely concentrated in the urban areas relative to the  rural  areas  where  most  Nigerians  live.  The  biggest  contributors  to  the consumer  inflation  were  the  high  prices  of  some  food  items,  liquid  fuel  and transport fares, and other miscellaneous goods and services which need liquid fuel and or transport fares for providing their services.

The percentage change in the average composite CPI for the twelve-month period ending  January  2012  over  the  average  of  the  CPI  for  the previous  twelve-month period  was  10.9.  This  was  slightly  higher  than  the  10.8  percent  recorded  for  the preceding month.   The corresponding 12-month year-on-year average  percentage change for urban and rural indices were 9.1 and 12.3 respectively.

While the impact of the subsidy removal on the CPI was visible and significant, this was tempered by several demand side factors which kept a downward pressure on price increases and prevented them from rising much higher than would have been expected.  Prices are dependent largely on demand and supply forces. If prices rise above buyers ability to pay (since disposable income remains constant), there will be  excess  supply  at those  high  prices  and  for  perishable  products  in  particular, prices will gradually come back down to levels where people can afford them. Even for non-perishable products, there is an amount of time after which a seller who depends  on  daily  income  will  keep  prices  high  in  the absence  of  demand,  after which  he  will  be  forced  to  reduce  his  prices  to  get  some  sales  to  carry  out  his daily/weekly family activities even if reducing those prices will be at a loss to him.

The CPI and consequently, the inflation rate though significant was moderated by several demand factors in January 2012.  Firstly, due to proactive monetary policy from  the  Central  Bank  of  Nigeria  (CBN)  in  the  second  half  2011,  Inflation  was expected to drop to between 8% and 9% in January 2012 (assuming there was no partial removal of subsidy). This earlier tightening by the CBN therefore helped to curtail the overall impact on inflation in January 2011 following the partial removal of subsidy. At the same time, the slow release of funds by the government’s FAAC reduced effective  demand  by  reducing  available  resources  for  backing  increased consumption  and  expenditure  during  the  month  of  January. This coupled  with consumer’s  anticipated  recovery  from  December  expenses  (which  did  not  occur again,  due  to  reduced  funds  in circulation) further  depressed  demand  and  thus limited  price  increases  and  gradually  revised  some  downwards.

Furthermore, during  the  strike period in  January,  2012,  consumers  had  a  temporary  lack  of access to funds as banks were closed. Finally, consumers with higher consumption profiles  had  stockpiled  goods  before  and  during  the  strike  period  and  thus  their demand  even  after  the  strike  period  was dampened as  they  drew  down  their pantries rather than demand new stocks. This reduced demand in the market such
that the high prices that immediately followed the partial removal of subsidy was dampened  and  started  coming  down  slightly  in  the  second half  of  January  2012 (though not to the pre partial subsidy removal levels). While we acknowledge that prices of certain food products were stillvery high in some parts on the country, it is  important  to  note  that  they  were  lower  in  others.  Food  price  increases  in  the Northern part of the country, where most food is produced were not as high as in the South where food is subject to significant transportationcosts.

Accordingly, the transport  costs  effect  of  the    partial  subsidy  removal  on  food  prices  will  be  a  lot less  in  the  North  were food is  largely  produced  since  it  is  closer  to  the  source  of production and hence has fewer miles to travel than in the Southern market where it has  to  be  transported.  At  the  same  time  the rise in the  price of imported food will be lower in the Southern States which are closer to the major ports than in the North  where  imported  food  items  have  to  be  transported  and  hence  affected  by the increase in fuel prices.

Such dynamics also helped to limit the overall impact on the rise in CPI and inflation which as an average across the country. The sharp rise in urban  inflation  by  16.4  percent  as  aforementioned,  relative  to  the  somewhat muted  rise  of  9.7  percent  in  rural  inflation demonstrates  this  geographical dimension and variation in price increases in the country.

In  January  2010,  the  level  of  the  Composite  Food  Index  was  higher  than  the corresponding level a year ago by 13.1 percent.  This was higher than 11.0 percent recorded  in  the  previous  month.  On  a  month-on-month  analysis  the  average monthly  food  prices  rose  in January 2012  by  0.9  percent  from  December  2011.
Again,  while  the  higher  food  prices  partially  reflected  transportation  costs,  other factors (stated above) limited further price increases.  The rise in the food inflation was mainly due to the increasing cost of yam, other tubers, cooking oil, meat, fruit, vegetables  and beverages.  The  average  annual  rate  of  rise of  the  index  was  10.5 percent (year-on-year) for the twelve-month period ending January 2012.

The “All items less Farm Produce” index which excludes the prices of often volatile agricultural  products  rose  by  12.7  percent  year-on-year, while  the  average  12 month  annual  rate  of  rise  of  the  index  remained  stable  at  11.8  percent  for  the twelve-month period ending January 2012. On a month-on-month basis, the core index increased 3.5 percent in January 2012. The increase was mainly on transport fares,  liquid fuels  and  other  services  (  based  on  personal  services  such  as  hair dressers,  shoe  cleaners,  personal  assistants,  etc)    that require  transportation  to provide their services, or petrol, in the case of barbershops for example, to power generators.  Thus  such  services had  to  factor  in  price  increases  of  petrol  and  this affected the price of their services.

And you can also download the report here:

Nigeria Bureau of Statistics - CPI and Inflation Figures - January 2012 (1214).

Welcome Back

In: News

2 Mar 2012

I apologize for the blackout for the past 2 months. I will return to posting regularly.

The focus will be on the Nigerian Stock Market and the Nigerian economy in general. Every and any information on the Nigerian economy will be posted as and when available.


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This blog is dedicated to informing users on the latest business and economic news news from the CBN and Nigerian Stock Exchange. Happy reading!


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