Nigeria’s forex inflow grows by 4% to $17.6bn –CBN

Nigeria’s total forex inflow into the economy increased by 4% quarter-by-quarter (q/q) to $17.6 billion.

According to the latest Quarterly Statistical Bulletin (QSB) of the Central Bank of Nigeria (CBN), the key driver of the rise in forex inflow in Q4 relative to the previous quarter was forex revenues from autonomous sources, which climbed by 18 percent q/q to $11.4 billion.

In contrast, forex inflow through the CBN, which accounted for about 35 percent of the total forex inflow, decreased by -15 percent q/q to $6.2 billion.

However, on a year-to-year (y/y) basis, forex inflow into the economy declined by -15 percent y/y to $17.6 billion in Q4’22.

Based on the data, the total outbound flow of forex (outflow) from the Nigerian economy declined by -9 percent q/q and -27 percent y/y to $9.1 billion during the quarter.

The data, taken together, imply a net forex inflow of $8.5 billion in Q4‘22.

This compares favourably with $7.0 billion and $8.3 billion in Q3‘22 and Q4’21, respectively.

The outflow of forex through the CBN decreased by -12 per cent q/q to $7.5 billion.

This accounted for 83 percent of total forex outflows in Q4’22.

The forex outflows from the CBN largely constitute payments made to service external debts and third-party transfers for government ministries, departments and agencies (MDAs).

The combination of total forex flows (inflow and outflow) through the CBN resulted in a net outflow of $1.3 billion.

The net outflow position largely mirrors the increased demand pressure on Nigeria’s gross official reserves, which has maintained a downward trend in the past months.

Autonomous outflow of forex increased by 11 per cent q/q to $1.5 billion during the quarter.

Combined, autonomous forex flows through the economy resulted in a net inflow of $9.8 billion.

On an aggregate basis, the total forex inflow into the Nigerian economy fell by -23 per cent y/y to $73.0 billion in financial year of 2023 (FY’22), while the total forex outflow decreased by 2 per cent y/y to $41.0 billion.

This resulted in a net forex inflow of $31.4 billion in 2022.

It is significantly lower than the $52.7 billion recorded the previous year.

“We continue to advocate for effective monetary and fiscal policies toward attracting foreign direct and portfolio investments into the economy,” CBN said.