The Central Bank of Nigeria (CBN) has announced a substantial surge in overseas remittances into the country, reaching $1.3 billion in February 2024, a significant increase from $300 million in the previous month.
Mrs. Hakama Sidi Ali, the Acting Director of Corporate Communications at the CBN, revealed this information during a press briefing in Abuja.
The CBN further highlighted a notable uptick in foreign inflows during February 2024, driven primarily by higher remittance payments from Nigerians living abroad and an increase in the acquisition of naira assets by foreign portfolio investors.
Sidi Ali disclosed that foreign investors injected over $1 billion into Nigerian assets last month alone, bringing the total portfolio flows for the early part of 2024 to at least $2.3 billion. This figure contrasts with the $3.9 billion recorded for 2023.
The trend of increased foreign exchange inflows has persisted into March 2024, largely attributed to recent adjustments in benchmark interest rates, which have amplified investor interest in short-term sovereign debt.
In Sidi Ali’s statement, she remarked:
“The Bank’s data indicates that overseas remittances rose to US$1.3 billion in February 2024, more than four times the US$300 million received in January. Foreign investors purchased more than US$1 billion of Nigerian assets last month, with total portfolio flows of at least US$2.3 billion recorded thus far in 2024 compared to US$3.9 billion seen in total for last year.”
Further Insights
The scarcity of dollars in the domestic market has significantly contributed to the weakening of the currency. The CBN has been actively addressing this issue by encouraging Nigerians residing abroad to repatriate their funds through official channels, aiming to stabilize the currency. As part of its reforms, the CBN is clearing the backlog of forex obligations, which it expects to complete within a few days. Additionally, the apex bank plans to establish a singular foreign currency (FCY) gateway bank to centralize all correspondent banking activities and incentivise individuals holding foreign currencies outside the formal banking system.
Other measures include investigating and resolving FX backlogs, restricting forex allocation for overseas education and medical trips, augmenting the minimum share capital for BDCs, and targeting FX market speculators. Through these reforms, the CBN remains steadfast in its commitment to stabilizing the naira and improving the overall health of Nigeria’s foreign exchange market.
