Macro-economy confidence index grows by 24.50pts

The business Expectations survey report released by the Central Bank of Nigeria (CBN) has shown increase in the respondents overall confidence index in the macroeconomy. The respondents confidence index grew to 24.50 index points at the end of March against 14.5 points reported in February.
The increase according to the survey was on the back of improvements in volume of total order, business activity, and internal liquidity positions (financial conditions).
The report also revealed that the businesses outlook for April 2018 has greater confidence in the macroeconomy at 64.1 index points against 57.8 points recorded previously.
Analysts from Cordros Capital Limited were optimistic that business confidence will maintain an upward trajectory due to the continued improvement in macroeconomic conditions.
Some of the things listed as major factors constraining growth were— insufficient power supply, high interest rate, insufficient demand, and unfavourable political climate, adding that they remain downside risks to the outlook.
Meanwhile, the overnight lending rate softened by 108 basis points week on week to 2.92 per cent, standing as the lowest since 14 December 2017, against 4.00 per cent it closed the previous week.
High system liquidity from the prior week carried on into this week, buoyed by inflows from matured open market operation (OMO) N476.21 billion bills. The CBN intervened once, via OMO auction, selling a total of N500.00 billion worth of bills.
On the global economy, China reported a trade deficit of $4.95 billion in March, from a $23.56 billion surplus in the same month of 2017. This was the first trade deficit since February 2017 and missed market expectation of a $27.1 billion surplus. Imports in March were 14.4 per cent higher year-on-year at $179.07 billion, while exports fell by 2.7 per cent year-on-year to $174.18 billion. Notably, the trade surplus with the US, China’s largest export market, dropped to $15.32 billion, from $21.0 billion in February.
Available report showed that growth in the Chinese economy – largely driven by exports – is likely to be weighed upon by the trade gap, particularly in first quarter, amidst trade war tensions with the US.