Nigeria’s External Reserves Could Reduce Slightly In 2024, Says CBN

Posted by African Examiner Business News, Latest Headlines Friday, July 19th, 2024

(AFRICAN EXAMINER) – The Central Bank of Nigeria (CBN) has projected that Nigeria’s external reserves could reduce slightly in 2024.

This was disclosed in the recently released maiden edition of its ‘Macroeconomic Outlook: Price Discovery for Economic Stabilisation’ report.

The apex bank attributed the project deep in the country’s reserves to debt service and other obligations.

The outlook said, “The external reserves, which stood at $33.09bn in 2023 could reduce slightly in 2024. This is on the assumption of continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt service. The expected improvement in crude oil earnings, together with recent reforms in the foreign exchange market and energy sector, however, would cushion the drop in external reserves.”

On July 8, Nigeria’s foreign reserve crossed $35.05bn, the first time in about a year and has remained above that mark since then.

As of Thursday, the country’s external reserves stood at $35.77bn.

Also, the outlook projected a marginal increase to $19.42bn from $19.17bn in 2023 for diaspora remittances.

“This is on account of the expected improvement in global economic conditions and reforms in the foreign exchange market that allow international money transfer operators to pay beneficiaries at market-determined exchange rates. Similarly, the ongoing efforts by the Bank to improve efficiency, transparency and confidence in the foreign exchange market is expected to boost remittances through formal channels,” the outlook said.

On public debt, the report said it was expected to maintain an upward trajectory, but remain on a sustainable path in 2024, saying, “The expected trajectory of public debt is underscored by planned infrastructure investment, social interventions, and the securitisation of the Ways and Means Advances to the FGN.”