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Macro-Economic News

Covid-19: Nigerian record worst consumption expenditure in over 12 quarters

Nigerians spent less on consumption expenditure in the first half of 2020 as Covid-19 hit income



Misery Index

Nigerians spent a total of N46.99 trillion on household consumption expenditure in the first half of 2020 (January – June). This is contained in the Nigerian Gross Domestic Product report (Expenditure and Income approach), released by the National Bureau of Statistics (NBS).

According to the report, the final consumption expenditure of Nigerian households in nominal terms stood at N46.99 trillion in H1 2020, indicating a 4.2% decline compared to N49.06 trillion recorded in the corresponding period of 2019.

In terms of quarterly breakdown, household consumption expenditure grew by 8.62% in Q1 2020 to stand at N25.49 trillion, while it dipped by 15.96% at N21.5 trillion in the second quarter of the year.

What this means

Consumption expenditure is an important factor in determining economic growth for any country. Thus, as Nigerians suffered the effects of the Covid-19 lockdown in the second quarter of the year, consumption expenditure dropped meaning more Nigerians spent less as they stayed at home.

  • A major driver of the lower spending was households with consumption falling to N21.5 trillion, the lowest in over 12 quarters. The data dates to the first quarter of 2018.
  • Covid-19 meant more Nigerians stayed at home reducing the amount they spent on household consumption. Most Nigerians spent more on staple food items, and critical supplies required to stay safe.
  • Spending on internet data also rose in the period as Nigerians relied on social media and streaming to stay informed.
  • Nigeria needs consumption expenditure to rise if it is to exit the recession.


  • Consumption expenditure of non-profit institutions serving households grew by 56.8% from N267.7 billion recorded in H1 2019 to N419.7 billion in H1 2020.
  • Compensation of employees also recorded a 1.9% increase to stand at N18.77 trillion between January and June 2020 as against N18.42 trillion recorded in the comparable period of 2019.
  • Also, changes in inventories were estimated at N602.7 billion in H1 2020, a 2.76% increase compared to N586.6 billion recorded in the corresponding period of 2019.
  • National disposable income for the first half of the year stood at N68.7 trillion in nominal terms. grew by 4.26% (year-on-year) from N65.87 trillion.

A cursory look at the data in real terms showed that household consumption expenditure in Q1 and Q2 2020 declined by 4.03% and 0.08% (year-on-year) respectively compared to 2.68% negative growth and 0.75% growth for the corresponding periods of 2019.


It is worth noting that household consumption accounted for 63.11% of the total real GDP at market prices in the second quarter, an increase of 3.7% points when compared to Q2 2019.

Government expenditure

In nominal terms, government expenditure grew by 9.61% in Q1 and 157.01% in Q2 2020. General government expenditure accounted for 6.23% of the gross domestic product in real terms in the first quarter and 14.58% in the second quarter of 2020.

  • In Q1 and Q2 2020, real general government expenditure grew by 6.80% and 152.05% respectively, with the half-year growth rate recorded at 77.25%.

Compensation of employees

In nominal terms, compensation of employees rose by 9.5% in Q1 but recorded a decline of 4.64% in Q2 2020 compared with growth of 7.83% and 14.35% for the comparative periods in 2019.

  • In real terms, however, compensation of employees recorded growth of 6.7% in Q1 and 6.47% decline in Q2 2020, year-on-year). For the first half of 2020, growth in this component was marginal at -0.34% year on year, or 7.74% points slower than 7.4% in 2019.

Net lending to rest of the World

Net lending grew by 348.25% in Q1 but declined by 51.11% in Q2 2020 compared with declines of 172.06% in Q1 and 242.85% in Q2 2019.

  • While, for the first half of 2020, nominal Net lending grew by 52.43%, compared to a decline of 213.85% recorded in 2019.

What you should know

  • The Nigerian economy contracted by 6.1% in the second quarter of 2020, and consequently slipped into recession after enduring a second contraction in Q3 2020.
  • The decline in economic activities in the country can be attributed to the disruptions brought about by the lockdown as a result of covid-19 pandemic.
  • Household disposable income, which measures the income of households after taking into account net interest, dividends received, payment of taxes, and social contributions grew by 2.55% and 0.66% in Q1  and Q2 2020 respectively.

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Macro-Economic News

CBN retains MPR at 11.5%, holds other parameters constant

The CBN voted unanimously to keep the Monetary Policy Rate (MPR), at 11.5% and other parameters constant.



CBN forex restrictions on food itemsCBN approves new cheque standard for banks

The Monetary Policy Committee (MPC), of the Central Bank of Nigeria (CBN), has voted unanimously to retain the Monetary Policy Rate (MPR) at 11.5%

This was disclosed by Governor, CBN, Godwin Emefiele while reading the communique at the end of the MPC meeting on Tuesday 26th January 2021.

Other parameters such as Cash Reserve Ratio (CRR), Liquidity ratio, and asymmetric corridor remain unchanged.

Highlights of the Committee’s decision

  • MPR retained at 11.50%
  • The asymmetric corridor of +100/-700 basis points around the MPR
  • CRR was retained at 27.5%
  • While Liquidity Ratio was also kept at 30%

According to Emefiele, MPC was of the view that it should pursue its current stance of systematic synchronization of monetary and fiscal policy accommodation through its developmental finance initiatives. This is aimed at quickening the recovery process of the country’s economy.


“Although the economy is currently in a stagflation environment with simultaneous occurrence of inflationary pressures and contracting output, the MPC resolved to reverse both developments and continue pursuing price stability in growing the economy”, He said.

On the other hand, the committee also opined that an aggressive expansionary stance could worsen both inflation and the negative real interest rate, thereby affecting the exchange rate negatively.

What this means

  • The Central Bank’s decision to retain the benchmark interest rate at 11.5% is in line with its move to boost consumer spending by increasing credit facilities to households, SMEs, health, agricultural, and the manufacturing sector so as stimulate the Nigerian economy.
  • Holding the rate will also encourage borrowing, as lending rate by banks is expected to remain low.

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Macro-Economic News

Price Watch: Nigerians paid less for Kerosene in December 2020

NBS Report shows that consumers paid less for Kerosene in December than they did in November 2020.



Average prices of Kerosene, Diesel and Cooking Gas in Nigeria

The latest National Bureau for Statistics (NBS) Price Watch report for the month of December 2020 indicates that the average price per litre paid by consumers for National Household Kerosene reduced by 0.17% from N353.38 in November 2020 to N352.79 in December 2020.

Also according to the report, the average price per gallon paid by consumers for National Household Kerosene reduced by 3.52% from N1,218.50 in November 2020 to N1,175.59 in December 2020.

Price variations across states

  • In the month of December 2020, States with the highest average price per litre of kerosene include; Benue (N436.81), Ebonyi (N425.83) and Taraba (N423.33).
  • However, consumers in Bayelsa (N235.95), Rivers (N302.04) and Delta (N307.69) enjoyed the lowest average price per litre of kerosene.
  • Consumers in Kebbi (N1,534.21), Nasarawa (N1,488.00) and Benue (N1,450.00) paid the highest average price per gallon of kerosene.
  • While consumers in Sokoto (N733.33), Bayelsa (N773.75) and Adamawa (N822.00) on the other hand, paid the lowest average price per gallon of kerosene.

Prices across zones

  • Consumers in South-East zone paid the highest average price for a litre of Kerosene (N377.53), followed by North East (N370.13), North West (N354.66), North Central (N354.44) while consumers in South West(N337.57) and South South (N325.96) paid the lowest average price for a litre of Kerosene.
  • In respect of the average price paid for a gallon of Kerosene, consumers in North West zone paid the highest (N1,197.54), followed by North Central (N1,305.68), South East (N1,220.66), while consumers in South West (N1,161.00), North East (N1,113.25) and South-South(N1,037.60) paid the lowest average price of a gallon of kerosene.

Why this matters

Kerosene has remained an important source of energy for cooking for most families, both in the rural areas and cities. Kerosene is mostly used in rural areas as a source of lighting.

Considering that food and lighting are very essential to life, it is therefore important that the price paid for Kerosene is quite reasonable and as well as affordable for most Nigerians.

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Macro-Economic News

Nigeria’s inflation rate hits 15.75% in December 2020, highest in 3 years

This is 0.86% points higher than the rate of 14.89% recorded in November 2020.



Despite billions on agriculture, food inflation up by 108% since 2015.

Nigeria’s inflation rate increased by 15.75% (year-on-year) in December 2020, the highest rate recorded in 3 years.

According to the latest Consumer Price Index report, released by the National Bureau of Statistics (NBS), the latest figure is 0.86% points higher than the rate of 14.89% recorded in November 2020.

On a month-on-month basis, the index increased by 1.61% in December 2020. This is 0.01% point higher than the rate recorded in November 2020 (1.60%).

READ: Inflation rate up 207% since 2009 as bad economic policies ravages naira.

Food inflation


The closely watched index rose sharply by 19.56% in December compared to 18.3% recorded in the previous month.

  • On a month-on-month basis, the food sub-index increased by 2.05% in December 2020, up by 0.01% point from 2.04% recorded in November 2020.
  • The rise in the food index was caused by increases recorded in prices of bread and cereals, potatoes, yam and other tubers, meat, fruits, vegetable, fish and oils and fats.

READ: Hope rises for employment in December 2020 and January 2021 – CBN survey Report 

Core inflation

The “All items less farm produce’‘ or Core inflation, which excludes the prices of volatile agricultural produce stood at 11.37% in December 2020, up by 0.32% when compared with 11.05% recorded in November 2020.

  • Also, on a month-on-month basis, the core sub-index increased by 1.10% in December 2020. This was up by 0.39% when compared with 0.71% recorded in November 2020.
  • The highest increases were recorded in prices of passenger transport by air, medical services, hospital services, shoes and other footwear, passenger transport by road, miscellaneous services relating to dwellings, hairdressing salons and personal grooming establishments, and repair of furniture.
  • Others include vehicle spare parts, pharmaceutical products, motor cars, maintenance and repair of personal transport equipment, paramedical services, motorcycle, dental services, and bicycles.

READ: Cost of data subscription reduces by over 50% in 2020

Worst hit states

  • In the month of December 2020, Bauchi State recorded the highest inflation rate at 19.85%, closely followed by Kogi State with an inflation rate of 18.4%
  • Others include Edo (18.1%), Zamfara (17.9%), and Sokoto (17.6%)
  • In terms of food inflation, Edo State also recorded the highest rise in inflation rate with 24.1%, followed by Kogi (23.16%), Sokoto (22.2%); while Kwara and Zamfara State recorded food inflation of 22.1% and 21.7% respectively.

READ: Nigeria’s inflation expected to maintain double digit in the next one year

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Meanwhile, the urban inflation rate increased by 16.33% (year-on-year) in December 2020 from 15.47% recorded in November 2020, while the rural inflation rate increased by 15.20% compared to 14.33% recorded in November 2020.

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What this means

The rise in the consumer price index indicates that consumers spent more in the month of December compared to the previous month.

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  • This implies that the purchasing power of Nigerians is continually eroding.
  • Nigerians could be faced with new worries if the second wave of the covid-19 pandemic leads to a second round of lockdown in the country.
  • The significant increase could, however, be attributed to the Christmas and New year festivities in the month of December.

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