Nigeria’s external reserves have reached a 22-month high of $37.31 billion, reflecting significant foreign inflows into Africa’s largest economy.
Despite the growing reserves, the naira has depreciated by 49.56 percent per dollar in the official foreign exchange (FX) market over the review period.
According to data from FMDQ Securities Exchange Limited, the naira declined from N776.60 on September 19, 2023, to N1,539.65 on September 18, 2024 in the Nigerian Autonomous Foreign Exchange Market (NAFEM), previously known as the Investors and Exporters (I&E) forex window.
In the parallel market, often referred to as the black market, the naira also lost 41.87 percent (N695) to the dollar, falling from N965 on September 19, 2023 to N1,660 on September 18, 2024, based on data from street traders and various online platforms.
Data from the Central Bank of Nigeria (CBN) reveal that as of September 18, 2024, the reserves hit the highest level since November 4, 2022, when they stood at $37.36 billion.
On a year-to-date basis, the country’s reserves surged by 12.99 percent, or $4.29 billion, from the $33.02 billion recorded at the start of the year on January 2, 2024.
Key sources of the inflows include: the federal government’s domestic dollar bonds, which attracted foreign investment; remittance inflows from Nigerians abroad; multilateral loans from international organisations; and foreign portfolio investments.
When compared year-on-year, Nigeria’s foreign reserves grew by 12 percent, adding $4.03 billion to the $33.28 billion recorded on September 18, 2023.
The Federal Government raised over $900 million from investors through the issuance of $500 million, the first series of the $2 billion domestic US dollar bond aimed to stabilise the economy.
West Africa’s largest economy recorded $553 million in remittances in one year, between July 2023 and July 2024, according to the CBN.
Other inflows into the country’s economy within the period include: $3.3 billion AfreximBank oil facility, and $2.25 billion from the World Bank Group.
