Onome Amuge
Nigeria’s external finances have recorded a significant improvement, with the Central Bank of Nigeria (CBN) announcing a Balance of Payments (BOP) surplus of $6.83 billion for the 2024 financial year. This marks a sharp reversal from deficits of $3.34 billion in 2023 and $3.32 billion in 2022, the apex bank said in a statement recently.
The CBN attributed the positive shift to wide-ranging macroeconomic reforms, stronger trade performance, and renewed investor confidence in Africa’s largest economy.
The current and capital accounts registered a combined surplus of $17.22 billion in 2024, primarily driven by a robust goods trade surplus of $13.17bn. The central bank highlighted a notable decline in import expenditure, with petroleum imports falling by 23.2 percent to $14.06 billion and non-oil imports decreasing by 12.6 percent to $25.74 billion.
On the export front, gas exports saw a substantial increase of 48.3 percent to $8.66 billion, while non-oil exports also recorded strong growth, rising by 24.6 percent to $7.46 billion. Remittance inflows proved resilient, climbing by 8.9 percent to $20.93 billion, indicating continued support from Nigerians living abroad.
Inflows through International Money Transfer Operators (IMTOs) rose 43.5 percent to $4.73 billion, up from $3.30 billion in the previous year, reflecting increased engagement from the diaspora. Official development assistance also saw a 6.2 percent rise to $3.37 billion.
The financial account also showed significant improvement, with Nigeria recording a net acquisition of financial assets totalling $12.12 billion. Portfolio investment inflows more than doubled, increasing by 106.5 percent to $13.35 billion, while resident foreign currency holdings grew by $5.41 billion, indicating greater confidence in domestic economic stability.
Despite a 42.3 percent fall in foreign direct investment (FDI) to $1.08 billion, the CBN noted that the overall financial account posted notable gains.
Boosting the country’s external buffer, Nigeria’s external reserves increased by $6.0 billion to $40.19 billion by the end of 2024. Furthermore, net errors and omissions, a measure of data integrity, narrowed 79.5 percent to a negative $5.10 billion, down from a negative $24.90 billion in 2023, indicating substantial improvements in data availability and accuracy.
The CBN stated that the 2024 BOP surplus underscores the effectiveness of Nigeria’s ongoing reform agenda. It cited the liberalisation and unification of the foreign exchange market, a disciplined monetary policy aimed at managing inflation and stabilising the Naira, and coordinated fiscal and monetary measures as key contributors to enhanced competitiveness and improved investor sentiment.
“The positive turnaround in our external finances is evidence of effective policy implementation and our unwavering commitment to macroeconomic stability,” the CBN stated, adding that the surplus marks an important step forward for Nigeria’s economy, benefiting investors, businesses, and everyday Nigerians alike.
