Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has announced the institution’s collaboration with the Ministry of Finance and the NNPC to ensure the return of all forex inflows to the central bank. Speaking at the Launch of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report, Cardoso emphasized the commitment to genuine price discovery for the nation’s local currency, the naira.
Cardoso expressed his belief that the naira is currently undervalued and, in tandem with coordinated fiscal measures, anticipates swift and genuine price discovery in the near term. He highlighted the CBN’s dedication to clearing forex backlogs and addressing any abuses of the process. The value of the naira has seen a decline in both official and parallel markets, trading as low as N1,330 to the dollar at the Nigeria Autonomous Foreign Exchange (NAFEX) window.
The CBN governor outlined the collaborative efforts to enhance the bank’s forex flows, emphasizing the coordinated endeavor with the Ministry of Finance and the NNPC. He attributed the expected stability in the forex market for 2024 to reduced petroleum product imports and the recent implementation of a market-determined exchange rate policy.
Cardoso stated, “We are implementing a comprehensive strategy to improve liquidity in our forex markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years.”
The NESG’s 2024 Macroeconomic Outlook Report projects moderate inflationary pressure and a 21.5% inflation rate for the year. Unemployment is anticipated to reach 5%, with job sector improvements expected to lower poverty to 41.5%. Limited CBN intervention in the FX market is predicted to result in a positive trajectory for the official exchange rate, reaching 900/$. The report also forecasts a boost in external reserves, reaching $40 billion by the end of 2024.
NESG Chairman Niyi Yusuf emphasized the group’s commitment to collaborative efforts with the government and urged stakeholders to contribute to rebuilding the economy. The NESG projected a 3.50% growth rate for the Real GDP in 2024, below the government’s 3.75% rate. The focus for sustained growth includes improving productivity in the agriculture sector, reviving the services sector, attracting private investment, and transforming production sectors for job creation and global competitiveness.
