The Central Bank of Nigeria (CBN) has forecasted a modest decline in Nigeria’s external reserves for 2024.
This projection was outlined in the inaugural edition of its report titled ‘Macroeconomic Outlook: Price Discovery for Economic Stabilisation.’
The bank attributed the anticipated decrease in reserves to debt servicing and other financial commitments.
The outlook said, “The external reserves, which stood at $33.09bn 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. The expected improvement in crude oil earnings, together with recent reforms in the foreign exchange market and energy sector, however, would cushion the drop in external reserves.”
On July 8, Nigeria’s foreign reserves surpassed $35.05 billion for the first time in nearly a year, and they have remained above this threshold since. As of Thursday, the reserves stood at $35.77 billion.
The outlook also projected a slight rise in diaspora remittances, estimating an increase to $19.42 billion from $19.17 billion in 2023.
“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 is expected to boost remittances through formal channels,” the outlook said.
On public debt, the report said it was expected to maintain an upward trajectory, but remain on a sustainable path in 2024, saying, “The expected trajectory of public debt is underscored by planned infrastructural investment, social interventions, and the securitisation of the Ways and Means Advances to the FGN.”
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