Nigeria’s economy experienced a notable boost in financial inflows of 335 percent increase in the third quarter of 2024, reaching $6.44 billion compared to $1.48 billion in the preceding quarter.
The increase, as highlighted in the Central Bank of Nigeria’s (CBN) quarterly economic report, was attributed to a rise in Central Bank liabilities and government loan acquisitions.
Breaking down the figures, the report noted that “other investment” liabilities recorded a net inflow of $4.06 billion, a sharp turnaround from the net reduction of $3.50 billion in the second quarter of 2024. The increase was driven by higher loan liabilities. Foreign direct investment liabilities also showed a modest rise to $0.56 billion, up from $0.52 billion in the previous quarter.
However, portfolio investment liabilities witnessed a significant decline, dropping to $1.92 billion from $4.42 billion in the second quarter, largely due to a reduction in debt securities.
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The report further revealed an impressive surge in financial assets acquired by resident investors, which grew to $10.47 billion in Q3 2024, compared to $1.79 billion in the preceding quarter. This development stemmed from a notable increase in foreign currency and deposit holdings by residents, which rose to $5.49 billion from withdrawals of $0.83 billion in Q2 2024.
Additionally, reserve assets saw an accretion of $4.21 billion, up from $2.47 billion in the previous quarter. Direct investment assets and “other investment” assets also increased significantly to $0.63 billion and $5.53 billion, respectively, contrasting with their lower levels in Q2 2024.
Meanwhile, Nigeria’s external debt stock as of the end of June 2024 stood at USD 42.90 billion, representing 23.90 percent of the country’s GDP. Multilateral loans, which include those from the World Bank Group, International Monetary Fund, and African Development Bank Group, accounted for the largest share at $21.62 billion, or 50.41 percent of the total.
Commercial loans, predominantly Eurobonds, followed with $15.12 billion (35.24 percent), while bilateral loans and syndicated loans stood at $5.89 billion (13.72 percent) and $0.27 billion (0.63 percent), respectively.
Debt servicing payments during the same period amounted to $1.12 billion. This included 0.40 billion in interest payments (35.71 percent of the total) and $0.58 billion in principal repayments (51.79 percent). The remaining balance covered other payments. A closer analysis revealed that commercial borrowings accounted for the majority of interest payments at 74.72 percent (USD 0.30 billion), while multilateral institutions and bilateral loans accounted for 23.45 percent (USD 0.09 billion) and the balance, respectively.
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On the international investment front, the report highlighted a decrease in Nigeria’s net financial liabilities, despite an increase in financial assets to $107.49 billion in Q3 2024 from $114.13 billion in Q2 2024. The growth in assets was primarily driven by increases in “other investment” assets and reserve assets, which rose by 11.69 percent and 13.02 percent, respectively, to $52.82 billion and $39.29 billion. Direct and portfolio investment assets also grew, reaching $17.33 billion and $4.58 billion, respectively.
However, financial liabilities saw a rise, increasing to $174.29 billion in Q3 2024 from $167.88 billion in the preceding quarter. This was primarily due to a 4.64 percent increase in “other investment” liabilities, which climbed to $74.30 billion. Direct investment liabilities also rose to $68.66 billion, compared to $66.09 billion in Q2 2024, while portfolio investment liabilities increased slightly to $31.25 billion from $30.61 billion.
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