In a presentation to the National Assembly joint committee on Banking, Insurance, and Financial Institutions, Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), outlined measures to address rising inflation and exchange rate concerns expected to impact Nigeria in the coming year.
Cardoso projected a positive outlook for the domestic economy in 2024, assuring that efforts will be made to stabilize both inflation and exchange rates despite potential fluctuations.
He mentioned that while short-term inflation pressures may persist, they are anticipated to decrease over the course of 2024. Likewise, exchange rate pressures are expected to alleviate significantly with the implementation of a more streamlined foreign exchange market, following the unification of exchange rate windows in June 2023.
The policy shift aims to curb arbitrage, rent-seeking behavior, and speculation within the market, with a focus on allowing market forces to determine exchange rates. Cardoso highlighted that this approach has already shown positive signs of narrowing the exchange rate premium.
Regarding trade figures, Cardoso disclosed that total trade in the third quarter of 2023 amounted to N18.804 billion, with exports valued at N10.346 billion and imports at N8.457 billion. He noted the positive trade balance as a contributor to boosting external reserves.
However, Cardoso acknowledged an anticipated reduction in revenue from oil exports in 2024 due to various domestic factors impacting production levels. Despite the OPEC-approved quota for Nigeria at 1.8mbps, the actual production remained below this threshold due to challenges such as crude oil theft, pipeline vandalism, production shutdowns, and divestments by major oil companies.
Prior to Cardoso’s presentation, the committee’s Chairman, Senator Tokunbo Abiru, underscored the session’s importance as a statutory briefing by the CBN in accordance with relevant laws. Co-chairman Hon. Bahir Bello El-Rufai commended the CBN Governor and management team for their efforts to stabilize the economy.
The interaction served as an opportunity for the CBN to articulate its strategies and provide insights into the country’s economic outlook for the forthcoming fiscal year.
