The Central Bank of Nigeria (CBN) has announced its commitment to tackle the escalating issues of inflation and exchange rates in the coming year. The declaration was made by the Governor of the Apex Bank, Olayemi Cardoso, during his presentation to the National Assembly joint committee on Banking, Insurance, and other Financial Institutions.
Governor Cardoso shared insights into the economic outlook for Nigeria in 2024, expressing optimism that both inflation and exchange rates would stabilize despite prevailing challenges. He acknowledged that short-term inflation pressures might persist but are expected to decline in 2024. Additionally, exchange rate pressures are projected to decrease significantly as the foreign exchange market functions smoothly.
Highlighting the impact of the unification of exchange rate windows in June 2023, Cardoso emphasized its role in reducing arbitrage, rent-seeking behavior, and speculation in the market. The policy shift aims to create a market where the exchange rate is determined by the demand and supply of foreign exchange.
Cardoso informed the committee members that the total trade from the Nigerian Foreign Exchange Market (NFEM) in the third quarter of 2023 stood at N18.804 billion. Exports were valued at N10.346 billion, with total imports at N8.457 billion, resulting in a positive trade balance that is expected to contribute to increased external reserves.
However, the CBN governor cautioned that due to domestic factors, less revenue is anticipated from oil exports in 2024. He attributed this projection to the production limit of 1.78 million barrels per day (mbpd), falling below the OPEC-approved quota of 1.8 mbpd.
Despite the challenges, Cardoso commended the measures implemented by the CBN to stabilize the economy. Chairman of the joint committee, Senator Tokunbo Abiru, highlighted that the interactive session was organized for statutory briefing by the CBN, in line with extant laws. Co-chairman Hon Bahir Bello El-Rufai commended the CBN governor and the entire management team for their efforts to stabilize the economy. The presentation provides valuable insights into the Central Bank’s strategic initiatives to address economic challenges and foster stability in Nigeria.
