The Central Bank of Nigeria (CBN) has forecasted a downward trend in inflation and exchange rates for the year 2024. During an appearance before the Senate and House of Representatives Joint Committee on Banking, Insurance, and Other Financial Institutions, the CBN Governor, Olayemi Cardoso, expressed optimism about the future of the Nigerian economy.
According to Cardoso, the CBN projects a positive outlook for the domestic economy in 2024. He anticipates that inflationary pressures, although persistent in the short term, will diminish over the course of the year. The exchange rate is also expected to experience a significant reduction in pressure, contributing to a more stable market.
Cardoso attributed these projections to the unification of the exchange rate windows in June 2023, which introduced a new approach to managing the exchange rate. This approach aims to minimize arbitrary rent-seeking behavior and market speculation, fostering an environment where the exchange rate is determined by the demand and supply of foreign exchange.
Highlighting the positive impact of these measures, Cardoso mentioned 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, resulting in a favorable trade balance. He emphasized that this trade balance is expected to bolster external reserves.
However, Cardoso acknowledged that lower revenues are anticipated from oil exports in 2024 due to limited production. He noted that Nigeria’s OPEC-approved quota of 1.8 million barrels per day (mbpd) exceeds the 2024 budget assumption of 1.78 mbpd.
Prior to the CBN Governor’s presentation, Senator Tokunbo Abiru, chairman of the joint committee, affirmed that the session was a statutory briefing in line with extant laws. In addition, Hon Bashir Bello El-Rufai, co-chairman of the committee, commended the CBN governor and the management team for their efforts to stabilize the economy.
The CBN’s optimistic forecast for 2024 reflects its commitment to addressing inflationary pressures, exchange rate stability, and trade balance, signaling potential opportunities for economic growth and stability in the year ahead.
