Nigeria’s Economic Growth Slowed in October – CBN report

The nation’s economic growth slowed in October as the Manufacturing Purchasing Managers’ Index rose slightly but remained below the 50-index point benchmark.

The Central Bank of Nigeria disclosed this in a report on the recent Monetary Policy Committee meeting.

The CBN Governor, Godwin Emefiele, said, “The committee also noted the continued improvement in the Manufacturing Purchasing Managers’ Index, which though remained below the 50-index point benchmark, rose to 47.3 index points in October 2021 from 46.6 index points in September 2021.

“This improvement indicated a gradual recovery of output growth, driven largely by the increase in new orders associated with rising aggregate demand and upswing in business activities.

“The Non-Manufacturing PMI, however, declined to 47.5 index points in October 2021 from 47.8 index points in September 2021 as uncertainties persisted around the poor security situation.”

He said the committee noted the continued moderation in headline inflation (year-on-year) to 15.99 per cent in October from 16.63 per cent in the previous month, the seventh consecutive month of decline.

The decrease was attributed to a marginal decline in both the food and core components to 18.34 and 13.34 per cent respectively in October 2021 from 19.57 and 13.74 per cent in September 2021.

Inflation, however, remained above the bank’s implicit tolerance corridor of six to nine per cent and above its benchmark policy rate of 11.5 per cent, despite its progressive decline.

The CBN said observing developments in monetary aggregates, the committee noted that broad money supply grew by 7.10 per cent in October, compared with 4.72 per cent in September.

It said this was driven by growth in net domestic assets by 9.12 per cent in October, compared to 10.71 per cent recorded in September.

According to the report, net foreign assets, on the other hand, contracted moderately by -1.50 per cent in October, compared with -20.85 per cent in the preceding month.

It said the continued growth in net domestic assets was largely driven by increased claims on the Federal Government and other public nonfinancial corporations, private sector and state and local governments.

It said in the financial markets, money market rates oscillated within the standing facilities corridor, reflecting the prevailing liquidity conditions in the banking system.