The Central Bank of Nigeria, CBN, said on Thursday that inflationary trends and exchange rates will be on a downward spiral in 2024.
The apex bank also said it has projected less revenue from oil exports in the fiscal year, just as it declared that total trade from the Nigerian Foreign Exchange Market, NFEM, stood at N18.804 billion in the third quarter (Q3) of 2023.
The Central Bank Governor, Olayemi Cardoso, stated this when he appeared before the Senate and House of Representatives Joint Committee on Banking, Insurance, and Other Financial Institutions.
Cardoso said the outlook for the domestic economy in Nigeria for 2024 is very positive, as both the inflation and exchange rates would withstand fluctuating pressures and get stabilised.
“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 said.
According to him, the unification of the exchange rate windows in June 2023 has ushered in a new approach to the management of the exchange rate, aimed at reducing arbitrary rent-seeking behaviour and speculation in the market.
“The policy aims at creating a market where the demand and supply of foreign exchange determine the exchange rate. The premium has narrowed and our focus on increasing the autonomous FX supply would lead to more stability and further narrowing of the premium,” he said.
He further stated: “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.”
He, however, stated that due to domestic prevailing factors, less revenues would be earned from oil exports in 2024.
He said: “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.”
Earlier, before the CBN Governor’s presentation, the chairman of the joint committee, Senator Tokunbo Abiru, said the interactive session was organised for a statutory briefing by CBN in line with extant laws.
The co-chairman of the committee, Hon Bashir Bello El-Rufai, in his remarks, commended the CBN governor and the entire management team on measures being put in place to stabilise the economy generally.
