Central Bank of Nigeria Projects Slight Dip in External Reserves for 2024
The Central Bank of Nigeria (CBN) has forecasted a slight decline in the nation’s external reserves for the year 2024.
This projection was revealed in the inaugural edition of the CBN’s report, “Macroeconomic Outlook: Price Discovery for Economic Stabilisation.”
The report attributes the anticipated decrease in Nigeria’s external reserves to debt service obligations and other financial commitments. According to the CBN, “The external reserves, which stood at $33.09 billion in 2023, could reduce slightly in 2024. This is on the assumption of continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt service.”
Despite the projected dip, the CBN is optimistic that an expected boost in crude oil earnings, along with recent reforms in the foreign exchange market and energy sector, will help mitigate the decline in reserves.
Notably, on July 8, Nigeria’s foreign reserves crossed the $35.05 billion mark for the first time in about a year, and as of Thursday, stood at $35.77 billion.
In addition to the reserve projections, the CBN report also forecasted a modest increase in diaspora remittances, rising to $19.42 billion from $19.17 billion in 2023.
The report notes, “This is on account of the expected improvement in global economic conditions and reforms in the foreign exchange market that allow international money transfer operators to pay beneficiaries at market-determined exchange rates.
“Similarly, the ongoing efforts by the Bank to improve efficiency, transparency, and confidence in the foreign exchange market are expected to boost remittances through formal channels.”
Regarding public debt, the report anticipates an upward trend but maintains that it will remain sustainable in 2024.
“The expected trajectory of public debt is underscored by planned infrastructure investment, social interventions, and the securitisation of the Ways and Means Advances to the FGN,” the report said.
This comprehensive outlook provides a detailed perspective on Nigeria’s economic prospects, highlighting both challenges and strategic initiatives aimed at fostering economic stability.
