Posted by From Kunle Aderinokun in Abuja on
Nigeria's gross external reserves hit $12.346 billion as at August 31, increasing from $12.228 billion recorded in the preceding month.
Nigeria's gross external reserves hit $12.346 billion as at August 31, increasing from $12.228 billion recorded in the preceding month.
The Central Bank of Nigeria stated this in its Monthly Economic Developments Report for August which will be deliberated upon at a meeting of the Monetary Policy Commit-tee on September 14.
In the report with reference number MPC/2004/08/RD.1-1, the CBN also disclosed that during the first seven months of the current year, the fiscal operation of the Federal Govern-ment resulted in a deficit of N101.3 billion, as against N110 billion in the corresponding period in 2003.
"The deficit" according to the CBN, "was financed from ways and means advances from the CBN, excess crude proceeds and other funds."
The disclosure however contradicted the declaration recently by the Minister of Finance, Dr. (Mrs.) Ngozi Okonjo-Iweala at a ministerial press briefing that the Federal Government had saved about N7 billion in the first six months of this year's fiscal operation by not borrowing through ways and means.
The government had in the budget made provision for a deficit of N181 billion. Part of the deficit will be financed through the N150 bn FGN bonds in the capital market.
The report of the CBN also indicated that the Federal Government may have been spending from the excess crude proceeds.
The banking watchdog said given the level of foreign exchange disbursement in August, "the reserves could finance 9.3 months of foreign exchange disbursement."
On foreign exchange flows, the CBN said "foreign exchange through the economy in July resulted in lower net inflow of $1.659 billion compared with a net inflow of $1.748 billion recorded in June. This translates to a decrease by 2.02 per cent in total inflow and 1.95 per cent increase in total outflows.
"Transactions through the Central Bank of Nigeria (CBN) showed that inflow and outflow were $2.231 and $1.331 billion, respectively during the month of July compared with $2.158 and $1.311 billion, higher than the net inflow of $847.62 in the preceding month," the bank stated.
Also, it added that "cumulative inflows and outflows as at end-July 2004 were $18.303 and $9.294 respectively compared with $13.052 and $9.668 billion in the corresponding period of 2003. The cumulative net inflow as at July 2004 was $9.008 billion , which was higher than the corresponding period's level of $3.384 billion".
Furthermore, the CBN in assessing the developments in the foreign exchange market during the review period, said the sale of foreign exchange to authorized dealers in August amounted to $754.31 million. This represents a decline of $141.03 million or 15.64 per cent below the level in July 2004. The apex bank stated that "under the DAS, the exchange rate of the naira depreciated marginally by 0.02 per cent over the level in the preceding month to N132.83 per dollar. "The relative stability in the exchange rate", according to the bank, "could be attributed to the moderate demand pressure in the foreign exchange market during the review period." "In the bureau de change (BDC) segment of the market, the naira depreciated marginally when it traded at an average of N140.33 to the dollar compared with N139.84 a dollar in June 2004. T
he premium between official and BDC rates widened from 5.30 in July to 5.65 in August 2004," the CBN added. However, the Central Bank said the total federally collected revenue in July stood at N347.5 billion representing an increase of 37.5 per cent and 6.8 per cent over the monthly budget estimate and the receipts in the preceding month respectively. "Oil revenue was N289.6 billion and accounted for 83.3 per cent of the total while non-oil receipts at N58 billion accounted for the balance," it stated.
The bank therefore indicated that during the review period , "actual oil revenue and non-oil receipts exceeded their budget estimates by 48.2 per cent and 1.1 per cent respectively." On a cumulative basis, the CBN added, federally collected revenue from January-July, stood at N2.096 trillion, showing a positive variance of 18.5 per cent and 50.6 per cent over the budget estimate for the period and the level in the corresponding period of 2003 respectively.
The bank pointed out the retained revenue of the Federal Government from January to July, which stood at N699.6 billion represented "an increase of 6.9 per cent and 20.6 per cent over the proportionate budget estimate of N560.69 and the level in the corresponding period of 2003 of N579.9 billion respectively." "The retained revenue of the Federal Government in July 2004 was N125.1 billion, representing an increase of 20.1 per cent and 3.9 per cent over the monthly budget estimate of N93.45 billion and the preceding month's value of N104.1 billion respectively. "Total expenditure for the months at N89.9 billion, fell short of the monthly budget estimate of N16.7 billion or 17.2 per cent.
Of the total expenditure, recurrent expenditure accounted for N88.5 billion or 98.4 per cent while transfers accounted for the balance," it stated. The bank therefore noted that the fiscal operation of the Federal Government in July resulted in a surplus of N35.2 billion.
In addition, the CBN said the cumulative expenditure for the seven month period was N800.9 billion as against N690 billion for the corresponding period of 2003. It explained that "of the total cumulative expenditure, recurrent expenditure and capital expenditure and transfers accounted for 72.3, 24.9 and 2.8 per cent respectively." It further added that "debt service payments accounted for N143.7 billion or 24.8 per cent."
The CBN also disclosed that inflation rate for the 12-month period ended July was 19.1 per cent compared with 19.4 percent in the preceding period, while the projection for August 2004 was 18.9 per cent. It pointed out that the projection for August was 0.2 percentage points below the level in the preceding month of 2003. The bank attributed the downward trend in inflationary pressure to "the relative stability in the prices of petroleum products in most parts of the country, as well as the decrease in the prices of some items due to the harvest period."