The Nigerian economy experienced an increase in foreign exchange inflows in the fourth quarter of 2024, as stated in the latest Economic Report by the Central Bank of Nigeria.
The report highlighted a 20.62% rise in total foreign exchange inflows, reaching $27.81 billion, compared to $23.06 billion in the previous quarter.
A key highlight of the report was the sharp rise in foreign exchange inflows from autonomous sources, which soared by 47.55% to $16.27 billion, up from $11.03 billion in the third quarter. In contrast, inflows through the Central Bank of Nigeria declined by 4.05%, falling to $11.54 billion from $12.03 billion in the preceding quarter.
“The economy recorded a higher net foreign exchange inflow, driven largely by inflow through autonomous sources,” read part of the report.
The report also noted a significant rise in foreign exchange outflows, which grew by 31.37% to $10.42 billion. This increase was driven by outflows through both the Central Bank of Nigeria ($8.99 billion) and autonomous sources ($1.43 billion), with the latter recording a sharp surge of 129.59% compared to the previous quarter.
Despite the rise in outflows, Nigeria maintained a net positive foreign exchange inflow, which increased by 14.99% to $17.39 billion, up from $15.13 billion.
During the review period, the Nigerian Foreign Exchange Market recorded a notable uptick in activity, with average turnover at the NFEM rising by 75.17% to $296.16 million, up from $169.07 million in the third quarter of 2024. This sharp increase highlights a significant boost in trading activity within the market.
However, the surge in market activity was accompanied by a further depreciation of the naira. At the Nigerian Foreign Exchange Market, the average exchange rate fell by 2.13%, settling at ₦1,623.26/$, down from ₦1,588.64/$ in the third quarter. According to the CBN report, this decline was driven by heightened demand pressure in the market.
Meanwhile, the CBN projected that the country’s economy would expand at a stronger pace over the medium term, reflecting optimism about ongoing reforms and improving macroeconomic conditions.
“The anticipated improvement is hinged on the expected stability of the naira at the foreign exchange market, continued improvement in domestic crude oil production, and the crystallisation of the ongoing policy reforms,” the apex bank stated.
CBN also stated that Nigeria’s inflation is expected to begin to moderate from Q1 2025: “The expected disinflation is hinged on the lagged effect of the Bank’s restrictive policy stance, the relative stability at the foreign exchange market and improved security in food-producing areas.”
According to projections, Nigeria’s inflation rate has declined for two consecutive months, reaching 23.18% in February. Analysts anticipate a continued downward trend, provided there are no major economic shocks.
