The Central Bank of Nigeria has predicted that in 2024, the country’s foreign reserves may decline slightly, due to debt repayment and other commitments.
This was disclosed in the inaugural edition of CBN 2024 Macroeconomic Outlook: Price Discovery for Economic Stabilisation, which was recently released, according.
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.”
Nigeria’s foreign reserve surpassed $35.05 billion on July 8 for the first time in about a year, and it has been above that amount ever since.
As of Thursday, the country’s external reserves stood at $35.77bn.
Additionally, the projection predicted a little increase in diaspora remittances to $19.42bn from $19.17bn in 2023.
“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.
According to the report, public debt is expected to continue growing but to stay on a sustainable path by 2024.it stated “The expected trajectory of public debt is underscored by planned infrastructural investment, social interventions, and the securitisation of the Ways and Means Advances to the FGN.
Meanwhile, in the foreword of the outlook, the Governor of the CBN, Olayemi Cardoso, stated that the bank will continue to tighten its monetary policy in an effort to control the rising rate of inflation.
He said, “To mitigate some of the risks and address existing imbalances, it is imperative to intensify monetary tightening to subdue inflation risk, sustain reforms to strengthen the foreign exchange market and tackle security issues around the food belt and oil installations.
“The outlook for the Nigerian economy indicates broad resilience, with continued growth, expected moderation of inflation, and greater exchange rate stability. The outlook is shaped by continued improvements in the domestic production and refining capacity of crude oil, as well as the expected rise in crude oil prices that could prop growth to 3.38 per cent in 2024 from 2.74 per cent in 2023.”
