The Central Bank of Nigeria (CBN) has reported a decline in net foreign exchange inflows to Nigeria, with the figure dropping by 2.97% in the third quarter of 2024. The total net inflow stood at $14.46 billion, down from $14.89 billion in the previous quarter. However, this represents a significant increase of 75.91% compared to the same period in 2023 when net inflows were $8.22 billion.
The report, published on Friday, highlighted that while overall foreign exchange inflows rose by 3.01% from $22.22 billion in Q2 to $22.89 billion in Q3, the increase came mainly from official sources. Inflows through official channels grew by 39.63% to $11.86 billion, while autonomous sources saw a decline of 19.66%, falling to $11.03 billion.
The report also revealed a rise in foreign exchange outflows by 15.18%, reaching $8.43 billion in Q3, up from $7.32 billion in the previous quarter. Outflows through banks surged by 27.91% to $7.31 billion, while those through autonomous sources decreased by 30.06%, amounting to $1.12 billion.
As a result, net foreign exchange inflows through the economy decreased by 2.97%, with the bank recording a net inflow of $4.55 billion, compared to a net outflow of $2.78 billion in the previous quarter. Autonomous sources saw a significant drop in net inflows, falling from $12.12 billion in Q2 to $9.90 billion in Q3.
On a positive note, Nigeria’s external reserves rose to $39.29 billion by the end of September 2024, up from $34.76 billion at the end of Q2. This level of reserves could cover 8.91 months of imports for goods and services or 13.34 months for goods only.
CBN Governor Olayemi Cardoso also reported a substantial increase in diaspora remittances. Between January and October 2024, remittances processed through international money transfer operators reached $4.22 billion, nearly double the $2.62 billion recorded during the same period in 2023. Cardoso attributed this surge to improved efficiency in the remittance system and the favorable policies under President Bola Tinubu’s administration.
Despite challenges, such as inflationary pressures and a volatile exchange rate, the CBN remains optimistic about Nigeria’s economic prospects. The report anticipates a stronger external sector in the coming months, supported by higher domestic crude oil production, fiscal reforms, and the full operation of local refineries.
In terms of inflation, Nigeria’s rate stood at 34.60% as of November 2024, driven primarily by food and energy costs. The CBN has projected that inflation could continue to rise due to ongoing policy reforms, though efforts to stabilize the foreign exchange market may help moderate the inflationary trend.
