Nigerians spent more dollars or foreign exchange in three months of last year, according to the Central Bank of Nigeria’s most recent Quarterly Statistical Bulletin.
This indicates that the total amount of foreign exchange used by the Nigerian economy increased every quarter, according to Businessday.
FX utilization increased to USD 4.1 billion in Q4 2023, a quarter-on-quarter increase of 21%.
However, despite the rise, FBNQuest in a report on Thursday said that the number is the second lowest over the previous eight quarters and shows a significant year-over-year fall of 46%.
A significant increase in FX utilization for invisible imports, which saw a 55% q/q increase to USD 1.5 billion, was a major contributor to the quarter’s growth. In the meantime, imports of goods made up 64% of all foreign exchange used, increasing by 21% every quarterly to USD 2.6 billion.
This indicates a 4% q/q decrease. Imports of food products rose by 8% every quarter, totaling USD 493 million and making up 19% of the total. The next category was manufactured goods, with imports totaling USD 340 million, or 13% of all FX used on goods.
Financial services accounted for around $1.5 billion, a 41 percent q/q increase, and roughly 72% of the total FX utilized by the invisible within the invisible segment. Financial services dominated the market. Another notable increase was in business services, which witnessed a q/q increase of about 250 per cent to $ 225 million.
According to CBN data, the overall trend of FX usage has been dropping since Q4 2022, except for the spike in Q4 2023. The prevalent FX liquidity issues at the time are reflected in this trend.
“Looking ahead, the CBN anticipates higher FX utilisation figures in the coming quarters. This expectation is based on the relative improvement in FX access for firms and other users, following the implementation of reforms aimed at enhancing market liquidity,” analysts at FBNQuest said.
The changes implemented by the CBN are anticipated to be crucial in stabilizing and maybe growing foreign exchange usage as Nigeria navigates its current foreign exchange environment, benefiting several economic sectors in the process.
