The depository corporations survey, released by the Central Bank of Nigeria (CBN) showed that broad money supply increased by 1.73 per cent month on month to N25.71 trillion in October 2018.
This resulted from a 6.10 per cent m-o-m increase in Net Domestic Assets (NDA) to N16.38 trillion which offset a 0.43 per cent m-o-m decrease in Net Foreign Assets (NFA) to N18.74 trillion.
On domestic asset creation, the growth in NDA resulted from an increase of 2.55 per cent in Net Domestic Credit (NDC) to N26.63 trillion which was accompanied by 2.67 per cent m-o-m fall in Other Liabilities (net) to N10.25 trillion.
Further breakdown of the NDC showed a rise of 14.60 per cent m-o-m rise in Credit to the Government to N3.90 trillion as well as an increase of 0.70 per cent in Credit to the Private sector to N22.72 trillion.
On the liabilities side, 1.73 per cent m-o-m increased in Broad Money Supply was driven by 4.20 per cent m-o-m growth in Narrow Money to N11.13 trillion as Demand Deposits which rose by 4.94 per cent to N9.52 trillion was accompanied by a 0.01 per cent rise in currency outside banks to N1.61 trillion); however, Quasi Money near maturing short term financial instruments fell by 0.08 per cent m-o-m to N14.58 trillion.
Reserve Money Base Money increased m-o-m by 7.74 per cent to N7.33 trillion as Bank reserves and Currency in circulation rose m-o-m by 10.97 per cent and 1.54 per cent to N5.02 trillion and N1.96 trillion respectively.
Meanwhile, CBN Purchasing Managers’ Index (PMI) survey report for November
2018, showed faster expansions in both manufacturing and non-manufacturing sectors. The faster expansion rate in the manufacturing sector was driven by stronger customer demand despite the increase in selling prices, to 51.9 from 51.2 reported in the preceding month.
According to the survey, the manufacturing composite PMI stood at 57.9 index point in November 2018 higher than 56.8 index point in the preceding month. The new orders and production volume expanded to 58.1 and 59.9 in November from 56.8 and 58.9 in October respectively – despite the rise in output prices.
Also, stock of raw materials increased to 58.7 in November from 56.2 in October amid increased sales and shortened supplier delivery time due to greater efficiency of suppliers, to 56.9 against 56.4 reported in the corresponding period, amid improved sales employment level grew, to 55.4 in November from 54.8 in October. All of the fourteen manufacturing sub-sectors under survey recorded growth, especially ‘Food, beverage & tobacco products’ and ‘Paper products’ that registered faster expansion of 60.1 from 55.6 and 59.3 from 53.4 respectively.
The non-manufacturing sector composite PMI registered 58.4 points in November 2018 higher than 57.0 points in October 2018, in the nineteenth consecutive expansion. The higher expansion in non-manufacturing sector according to the report was due to the rise in new business, to 57.5 in November from 56.4 in October which resulted in faster business activity at 60.4 from 58.3 recorded the previous month. In spite of the rise in average inputs cost to 52.6 in November from 50.7 in October, inventory grew faster, at 59.6 from 57.6.
Given the faster growth in business activity, number of persons employed increased as employment level index points expanded slower, to 56.2 from 55.7.
The seventeen non-manufacturing sub-sectors under survey, sixteen sectors recorded growth, especially, ‘Water supply, sewage & waste management’ which registered faster expansion of 65.2 from 45.8.
Analysts from Cowry Assets management research group said that the strategy by CBN to use the banks’ cash reserves in its vault to fund the real sector at a single digit interest rate has not been apparent, given the marginal increase in credit to private sector.
The analysts however, said ahead of the release of third quarter 2018 Gross Domestic Product figure next week, they expect a slightly higher than Q2 2018 growth rate amid the marginal increase in PMI readings in the third quarter compared to the second quarter.
