Nigeria’s economic growth slowed in October remained below the 50-index point benchmark as the Manufacturing Purchasing Managers’ Index rose slightly.
A report on the recent Monetary Policy Committee meeting of the Central Bank of Nigeria showed the situation of the economy.
The CBN Governor, Godwin Emefiele said that 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.
He added that the 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.
According to the governor of the Central Bank of Nigeria, “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.”
Godwin Emefiele explained that the committee observed 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.
He said that 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, he explained, 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, in spite of its progressive decline.
The CBN explained that the committee stated that broad money supply grew by 7.10 per cent in October, compared with 4.72 per cent in September in spite of the developments in monetary aggregates.
The committee noted that 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.
The report explained that net foreign assets contracted moderately by -1.50 per cent in October, compared with -20.85 per cent in the preceding month.
It noted that the continued growth in net domestic assets was driven by increased claims on the Federal Government and other public nonfinancial corporations, as well as private sector and state and local governments.
In the financial markets, it stated that money market rates oscillated within the standing facilities corridor, reflecting the prevailing liquidity conditions in the banking system.