Nigeria’s external reserves reached a 22-month high of $37.31 billion, indicating a significant increase in foreign inflows into the country’s economy.
According to the Central Bank of Nigeria (CBN), as of September 18, 2024, the reserves have reached their highest level since November 4, 2022, when they were at $37.36 billion, signalling a remarkable recovery in Nigeria’s foreign currency position.
External reserves represent the country’s supply of foreign currency. Despite this increase, they have not substantially impacted the depreciation of the naira, which Bloomberg ranked as one of the ten worst-performing currencies in the world on September 20. The reserves are essential for assessing the country’s ability to meet international financial obligations and stabilise the local currency.
Several factors have contributed to the rise in external reserves, including foreign investment attracted by the government’s domestic dollar bonds, remittance inflows from Nigerians abroad, loans from international organisations, and foreign portfolio investments.
Nigeria’s foreign reserves have grown by 12% yearly, adding $4.03 billion to the $33.28 billion recorded on September 18, 2023.
The government raised over $900 million from investors by issuing the first series of the $2 billion domestic US dollar bond to stabilise the economy.
According to the CBN, Nigeria received $553 million in remittances between July 2023 and July 2024. During this period, other inflows into the country’s economy include a $3.3 billion AfreximBank oil facility and $2.25 billion from the World Bank.
Foreign exchange inflows through the economy increased by 57% in one year due to consistent policies by the CBN. CBN data revealed that the country recorded $8.86 billion in FX inflow in February 2024, higher than the $5.66 billion in February 2023.