The agency ended up with total sales of NGN435bn, about 1.2x the NGN360bn it had on offer. The sales-to-offer ratio was a marked improvement compared with the 0.8x average recorded over its prior three auctions. #FBNQuestResearch

A commendable effort by the DMO The Debt Management Office (DMO) held its monthly primary market auction of FGN bonds this Monday. The auction was a resounding success, especially compared to its three previous auctions. #FBNQuestResearch

It is worth mentioning that the data is provisional and subject to revisions in subsequent publications. #FBNQuestResearch

This is compared with -NGN3.9trn and -NGN2.2trn in the previous quarter and the corresponding quarter of 2022, respectively. The data is published by the CBN but sourced from the Office of the Accountant-General of the Federation.  #FBNQuestResearch

A decline in the FGN’s fiscal deficit We see from the Central Bank of Nigeria’s (CBN) Quarterly Statistical Bulletin for Q2 ’23 that the fiscal operations of the Federal Government of Nigeria (FGN) resulted in a lower fiscal deficit of -NGN2.0trn.  #FBNQuestResearch

However, the Q2 2023 fx inflow is the lowest level observed since March 2017, when it fell to USD14.9bn. In terms of the split, the total inflow comprised of autonomous fx inflow of USD11.2bn, or about 67% of the total inflow. #FBNQuestResearch

roughly equivalent to -3.0% of GDP compared with a net deficit of -USD3.2bn in the previous quarter. Consequently, the lower net deficit on the services account partially contributed to the current account surplus of USD2.9bn recorded in Q2. #FBNQuestResearch

Today, we turn our attention to the services accounts, in continuation of our discussion on the balance of payments. The services account, which is one of the main drivers of the current account, recorded a slightly lower net deficit of -USD3.1bn in Q2 ‘23. #FBNQuestResearch

This compares with a slight contraction of -1% q/q in the preceding quarter. It is important to note that the impressive q/q growth in Q2 '23 was due to the increase in the foreign currency-denominated portion of the sector's loan book. #FBNQuestResearch

DMBs' credit growth boosted by FX devaluation According to the CBN's most recent Quarterly Statistical Bulletin (QSB) for Q2 '23, deposit money banks (DMB) total credit lending to the economy rose sharply by 24% q/q (+40% y/y) to NGN37.5trn in Jun '23. #FBNQuestResearch

The decrease in revenue receipts during the quarter was primarily attributable to lower oil revenue. The revenue collection from oil decreased sharply by -40% q/q and -36% y/y to NGN809.0bn. #FBNQuestResearch

The government’s revenue receipts have now declined for three consecutive quarters. The consistent decline in federal gross revenue reflects the continued tightness of the government’s fiscal space. #FBNQuestResearch

According to the Central Bank of Nigeria’s (CBN) most recent Quarterly Statistical Bulletin, gross federally collected revenue fell by -16% q/q and -13% y/y to NGN2.5trn in Q2 ’23. #FBNQuestResearch

To further illustrate, the latest BOP data shows a current account deficit of -0.4% of GDP in Q1 ’23, compared with a previous surplus of 2.2%. #FBNQuestResearch

The figure represents 2.8% of GDP. A notable observation is that the balance of payments (BOP) data for Q2 ’23 has significant revisions compared to the initial data reported for Q1 ’23. #FBNQuestResearch

We see from the Central Bank of Nigeria’s (CBN) most recent Quarterly Statistical Bulletin (QSB) that Nigeria’s current account improved to a surplus of USD2.9bn in Q2 ’23, up from a revised deficit of -USD412.5m in Q1 ’23. #FBNQuestResearch

It also captures lending by the CBN and state-owned development banks, such as the Bank of Industry. #FBNQuestResearch

The growth marks the fastest pace of PSCE growth this year. On a year-to-date basis (ytd), PSCE expanded by 40% ytd. The data covers lending by the entire banking system and not only the deposit money banks (DMBs). #FBNQuestResearch

Robust y/y growth in PSCE The most recent data from the Central Bank of Nigeria (CBN) shows that private sector credit extension (PSCE) increased by 45% y/y to NGN58.6trn in Sep ’23.  #FBNQuestResearch

The largest source of revenue is the collection of pay-as-you-earn (PAYE). It accounted for about c.NGN944.4bn or (52%) of total revenue collections. #FBNQuestResearch