The Central Bank of Nigeria (CBN) made headlines with a remarkable surge in foreign exchange inflow into the economy throughout February 2024, driven by notable spikes in remittance payments from Nigerians abroad and the acquisition of naira assets by foreign portfolio investors.
In a press briefing held in Abuja, CBN’s acting director of corporate communications, Hakama Ali, revealed the staggering figures. “Our data reveals that overseas remittances soared to a staggering US$1.3 billion in February 2024, dwarfing the US$300 million recorded in January,” Ali stated.
Furthermore, Ali disclosed that foreign investors poured over US$1 billion into Nigerian assets last month alone, contributing to a total portfolio flow surpassing US$2.3 billion for the year 2024, compared to the US$3.9 billion recorded for the entire previous year.
Ali emphasized that the momentum of higher FX inflows persisted into March 2024, bolstered by heightened investor interest in short-term sovereign debt, particularly following adjustments to benchmark interest rates. Notably, government securities issuances witnessed overwhelming demand, with foreign investors accounting for a substantial 75% of bids received during auctions held on March 1 and 6, 2024.
CBN governor Olayemi Cardoso had previously outlined a comprehensive strategy aimed at combating inflation, stabilizing the exchange rate, and fostering confidence in the banking system and economy. This strategy was communicated during last month’s monetary policy committee meeting and reinforced through a conference call with foreign portfolio investors, setting the stage for sustained growth in Nigeria’s foreign currency reserves and enhanced liquidity in the foreign exchange market.
Commenting on these developments, Cardoso expressed optimism, stating, “All the various measures we’ve implemented to bolster reserves and enhance market liquidity are yielding positive results.” He further emphasized, “When stakeholders grasp the underlying challenges and witness a clear strategy and plan, confidence tends to return. Our primary objective is to ensure market stability, functionality, and accessibility for investors.”
The CBN’s proactive approach and strategic initiatives have garnered praise, signaling a positive trajectory for Nigeria’s economic landscape in the months ahead.
