Besides expressing optimism about the exchange rates, the CBN boss projects less revenue from oil exports in the 2024 fiscal year
The Central Bank of Nigeria (CBN) has guaranteed that the country’s skyrocketing inflation and exchange rates will significantly decrease in 2024.
The apex bank also predicted lower oil revenue for the coming fiscal year, while disclosing that the sum of N18.804 billion worth of trade was recorded through the Nigerian Foreign Exchange Market (NFEM) in the third (Q3) of 2023.
These declarations were made by the Governor of the CBN, Mr. Olayemi Cardoso, in a presentation before the National Assembly joint committee on banking, insurance and other financial institutions on Thursday.
He clarified that the outlook for Nigeria’s domestic economy in 2024 is extremely promising because both inflation and exchange rates would be able to withstand pressures that cause them to fluctuate before stabilising.
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“The outlook for the domestic economy remains positive and expected to maintain the 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 foreign exchange market”, he said.
With an explicit purpose of curbing arbitrage, rent-seeking behaviour, and market speculation, he specifically told the committee members that the unification of the exchange rate windows in June 2023 has brought in a new approach to exchange rate management.
“The policy aims at creating a market where the demand and supply of foreign exchange determines 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.
“Total trade in the third quarter of 2023, stood at N18.804.68billion. Exports were valued at N10.346.60billion while total imports stood at N8.457.68billion. This represents positive trade balance, which would lead to increase of the external reserves,” he said.
Speaking further, he said: “We expect less revenue from oil exports due to the production limit of 1.78mbpd in 2024. OPEC approved quota for Nigeria is 1.8mbpd , which is higher than the 2024 budget assumption. However, the country’s production has been below these thresholds. The budget benchmark for 2023 was 1.69mbpd , but the highest level of production during the year was about 1.35mbpd in Q3 of 2023. The reasons for the underperformance of the oil production target , include , crude oil theft and pipeline vandalization , production shut-ins and divestments by major oil companies.”
Before the CBN Governor’s presentation, chairman of the joint committee, Senator Tokunbo Abiru (APC, Lagos East) said the interactive session was organised for statutory briefing by CBN in line with extant laws.
During his speech, the committee’s co-chair, Rep. Bello El-Rufai (APC, Kaduna), praised the CBN governor and the management team for the steps taken to stabilise the economy as a whole.
Others present at the defence hearing were, Senators Kaka Shehu Lawan (APC, Borno Central), Seriake Dickson (PDP, Bayelsa West), David Jimkuta (APC, Taraba South), and Adamu Aliero (PDP, Kebbi Central), amongst others.
