The Central Bank of Nigeria (CBN) announced on Thursday that it foresees a decline in both inflationary trends and exchange rates in 2024. CBN also revealed projections of reduced revenue from oil exports in the fiscal year, while highlighting that total trade on the Nigerian Foreign Exchange Market (NFEM) reached N18.804 billion in the third quarter of 2023.
During an appearance before the Senate and House of Representatives Joint Committee on Banking, Insurance, and Other Financial Institutions, CBN Governor Olayemi Cardoso expressed optimism about the domestic economy’s outlook for 2024. He asserted that both inflation and exchange rates would exhibit resilience against fluctuating pressures and achieve stability.
Cardoso stated, “The outlook for the domestic economy remains positive and is expected to maintain a positive trajectory for 2024. Inflation pressures may persist in the short term but are expected to decline in 2024. Exchange rate pressures are also expected to reduce significantly with the smooth functioning of the foreign exchange market.”
He highlighted the unification of exchange rate windows in June 2023 as a pivotal move in managing exchange rates, aimed at reducing speculation and rent-seeking behavior. Cardoso emphasized the shift towards a market-driven approach where foreign exchange rates are determined by demand and supply.
Regarding trade figures, he disclosed, “Total trade in the third quarter of 2023 stood at N18.804.68 billion. Exports were valued at N10.346.60 billion, while total imports stood at N8.457.68 billion. This represents a positive trade balance, which would lead to an increase of the external reserves.”
However, Cardoso acknowledged that, due to domestic factors, lower revenues are expected from oil exports in 2024. He explained, “We expect less revenue from oil exports due to the production limit of 1.78 mbpd in 2024. The OPEC-approved quota for Nigeria is 1.8 mbpd, which is higher than the 2024 budget assumption.”
Prior to the CBN Governor’s presentation, the chairman of the joint committee, Senator Tokunbo Abiru, emphasized that the interactive session was organized for a statutory briefing by CBN in compliance with existing laws. Co-chairman Hon Bashir Bello El-Rufai commended the CBN governor and the entire management team for implementing measures to stabilize the economy.”