Nigeria welcomes $24 billion in FX inflows in Q1’24-CBN

Business a.m.

Nigeria’s economic inflows from foreign sources soared to $24 billion during the first quarter of 2024, according to a recent statement from Olayemi Cardoso, Nigeria’s central bank governor.

Cardoso, in an interview with Bloomberg TV, stated that the measures taken by the Central Bank of Nigeria (CBN) have had a positive impact on FX inflows, with Q1 2024 data showing a 50 percent increase over previous years.

Cardoso explained that in an effort to improve Nigeria’s foreign exchange (FX) market, he has assembled a team of experts tasked with the goal of doubling the inflow of FX from international monetary operations.  According to the CBN governor, this new committee, reporting directly to him, is taking bold steps to bring more diaspora funds into the official FX market

The CBN governor stated: “Capital inflows are very important. And the reason for that in the case of Nigeria, the pass-through from the foreign exchange rate into inflation is quite significant. We believe that this is an area outside of the normal day-to-day operations that NNPC and exporters will help in closing the gap. Already, it’s beginning to bring about results. Again, we are confident that with these kinds of measurements, liquidity will increase in our market.”

The CBN has released data that shows a  136 percent growth in foreign exchange inflows during the first quarter of this year, compared to the same period last year.  The significant increase has been attributed to the successful implementation of several key reforms, aimed at liberalising the FX markets, increasing transparency, curtailing opportunities for arbitrage, promoting stability, and enhancing liquidity. 

The Nigerian economy received a much-needed boost in March as the Nigerian Autonomous Foreign Exchange Market (NAFEM) experienced a massive surge in FX inflows, according to data from FMDQ’s website. Total FX inflows soared to $3.75 billion, a staggering 41.7% increase compared to February’s $2.64 billion and the highest level since March 2019.

The Nigerian economy has been on a steady path of growth in terms of foreign exchange (FX) inflows, beginning from the first month of the year. According to the Central Bank of Nigeria (CBN), international trade transactions have resulted in a higher trade surplus in January, mainly due to the uptick in domestic crude oil production and an upward trend in global crude oil prices. In addition, capital inflows into the economy increased substantially, resulting in a higher net inflow through autonomous sources.