The Central Bank of Nigeria (CBN) announced on Thursday that it expects inflationary trends and exchange rates to decline in 2024. The apex bank also projected less revenue from oil exports in the fiscal year.
CBN Governor, Olayemi Cardoso, made these statements during his appearance before the Senate and House of Representatives Joint Committee on Banking, Insurance, and Other Financial Institutions. He expressed optimism about the domestic economy in Nigeria for 2024, stating that both inflation and exchange rates would stabilize despite fluctuating pressures.
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Cardoso said, “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 further explained that the unification of the exchange rate windows in June 2023 has introduced a new approach to managing the exchange rate, aimed at reducing arbitrary rent-seeking behavior and speculation in the market.
Cardoso also revealed that total trade from the Nigerian Foreign Exchange Market (NFEM) stood at N18.804 billion in the third quarter (Q3) of 2023. He noted, “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, he cautioned that due to domestic prevailing factors, less revenue would be earned 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.”
Before Cardoso’s presentation, the chairman of the joint committee, Senator Tokunbo Abiru, stated that the interactive session was organized for a statutory briefing by CBN in line with extant laws. The co-chairman of the committee, Hon Bashir Bello El-Rufai, commended the CBN governor and the entire management team on measures being put in place to stabilize the economy generally.
