The Central Bank of Nigeria (CBN) said that FX inflows into the country in the first quarter (Q1) of 2024 was 136 percent of total inflows in 2023.
“In Q1 we saw a massive spike in inflows, the FX flows into the country in the first quarter 2024 was 136 percent of the total inflows that we had in the whole of 2023,” Blaise Ijebor, director of risk CBN representing Olayemi Cardoso said.
This increase is attributed to major reforms to liberalize the foreign exchange markets, which has enhanced transparency, reduced arbitrage opportunities, promoted stability and improved liquidity in the market.
The CBN director of risk said this at The 8th edition of the Vanguard Economic Summit, themed: ‘Reforms In The Era of Global Economic Uncertainties: Whither Nigeria?’ on Thursday, May 23, in Lagos.
He said that the settlement of all valid FX backlogs, which was one of his commitments on becoming the governor of the Central Bank of Nigeria, has also improved the confidence of stakeholders.
Last month BusinessDay reported that Foreign exchange inflows into Nigeria surged to a five-year high in March as investor confidence has improved on the back of the central bank’s reforms.
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According to data obtained from FMDQ’s website, total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) increased by 41.7 percent to $3.75 billion as against $2.64 billion in February – the highest level since March 2019 ($6.07 billion).
Inflows from foreign sources spiked 39.6 percent to $1.54 billion, the highest in over four years.
The data revealed that local sources accounted for 59 percent of total transactions, while foreign sources contributed 41 percent of gross transactions.
Inflows from local sources increased by 43.2 percent to $2.21 billion in March as against $1.54 billion in February.
Blaise said that the apex bank will continue to be committed to a transparent and functional FX market where price discovery is based on market driven frameworks, and we are confident that this will look to long term stability of the naira.
“I know that a lot of people want to be able to know exactly what the rate of the naira is at any given time,” he said.
He said that the challenge of high inflation in Nigeria is driven likely by food inflation data, the rising costs of transport of farm produce, infrastructure related constraints, security challenges in some food producing areas, an exchange rate passing through the domestic prices for imported goods.
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We have embarked on tying the bank’s monetary policy to address inflationary pressure in the economy, and believe that the results will become evident in the data.
“ Luckily, we have already seen a deceleration in inflation evidenced by a decline in the amount of growth in the headline and food inflation rates based on our March inflation figures,” he said.
Blaise said that the Central Bank of Nigeria is committed to continue to enhance its effort to deliver on its mandate of promoting monetary and price stability in Nigeria.
Kashim Shettima, represented by Tope Fashua, Special Adviser to the president on economy, mentioned some of the government’s efforts to steer the Nigerian economy in a positive direction.
“Mr. President has been able to secure more than $20 billion in potential investment into the country, including $14 billion from India, two $50 million from the Netherlands and commitments of $500 million for lithium development in natural state, as well as another $500 million from Germany and into renewable,” he said.
“It has been noted that the approach of the Tinubu administration to tackle the ways and means situation head on with very tight time limits towards resolving them, classifying the loans properly as part of national debt and ensuring that any new debts are properly structured,” he said.
Fahua said that the administration is not out to make the lives of Nigeria’s tougher but to make Nigeria’s economy sustainable and the lives of our people might enjoy. And rest assured, that the next few years will be full of positive achievements, improvements in standards of living, higher productivity, and food security.”
