CBN Economic Report for Q3 2024 has revealed that the downturn in manufacturing sector is responsible for decline in global economic activity for the period under review.
In the publication available on the website of the Central Bank of Nigeria (CBN), the apex bank stated thus:
In Q32024, global economic activity decelerated driven, primarily, by a downturn in the manufacturing sector. Within the Advanced Economies (AEs) and several Emerging Markets and Developing Economies (EMDEs), economic performance exhibited a mixed trajectory, largely influenced by country-specific dynamics. Inflation eased across most AEs and EMDEs, the drop in energy and gasoline prices. The performance of financial markets varied across region, shaped, largely, by expectations of further interest rate cuts. The global bonds market softened in response to rate reductions by the Federal Reserve and other central banks. The spot price of Bonny Light crude decreased to US$82.23 per barrel (pb), from US$86.97 pb in Q22024 reflecting the weak growth in global oil demand. Similar downward trends were observed in the prices of Brent, Forcados, WTI, and OPEC Reference Basket.
The domestic economy grew by 3.46 per cent in Q32024, in the review quarter driven, mainly, by the growth of the non-oil sector. Inflation moderated to 32.70 per cent from 34.19 per cent in the preceding quarter driven by a fall in the food component of the CPI basket, and the Bank’s restrictive policy stance. Domestic crude oil production rose to 1.33 million barrels per day (mbpd), from 1.27 mbpd in the preceding quarter, reflecting improved security around the pipeline infrastructure in the Niger Delta region.
Provisional data showed an expansion in fiscal operations in Q32024, following higher receipt from non-oil sources. Federally collected revenue rose by 7.48 per cent, relative to the level in Q22024, but fell short of the benchmark by 23.71 per cent. Federal Government of Nigeria (FGN) retained revenue was below the level in Q22024 and the quarterly target. Similarly, the FGN aggregate expenditure dipped by 16.26 and 22.38 per cent below the levels in Q22024 and the quarterly target, respectively. Thus, the fiscal deficit contracted by 22.51 per cent in Q32024, but widened by 43.88 per cent, compared with the quarterly target.
Monetary aggregates trended upwards due to increased credit to key sectors of the economy and the effect of exchange rate revaluation. Broad money supply expanded, resulting from the growth in both net foreign assets (NFA) and net domestic assets (NDA). Key short-term interest rates were stable and reflected the liquidity dynamics in the banking system. Activities in the Nigerian equities market slowed, in response to rising interest rate, reflecting the preference for fixed income securities, due to its attractive yields.
The external sector performance showed improvement in Q32024, due to a higher trade surplus and remittances inflow. The financial account recorded a higher net acquisition of financial assets, driven largely by higher foreign currency and deposit holdings by residents and accretion to external reserves. At US$39.29 billion, the level of external reserves could cover 8.91 months of import for goods and services or 13.34 months for goods only. The average exchange rate at the NFEM depreciated by 14.62 per cent to ₦1,588.64/US$, from ₦1,385.96/US$ in Q22024.