The Central Bank of Nigeria (CBN) says the rising inflation and exchange rates will decline in 2024.
The apex bank also projected less revenue from oil exports in the coming year.
The CBN Governor, Olayemi Cardoso, gave the assurance when he appeared before the Joint Committee on Banking, Insurance and other Financial Institutions in Abuja on Thursday, December 14, 2023.
Cardoso said the total trade from Nigerian Foreign Exchange Market (NFEM) stood at N18.804 billion as of the third quarter of 2023.
According to him, the outlook for the nation’s domestic economy for 2024 is very positive, as both the inflation and exchange rates would absolve the volatile pressures on them and get them stabilised.
The CBN boss said: “The outlook for the domestic economy remains positive and is expected to maintain the positive trajectory for 2024.
“Inflation pressure may persist in the short-term but is expected to decline in 2024.
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“Exchange rate pressures are also expected to reduce significantly with the smooth functioning of foreign exchange market.”
The CBN Governor further stated that the unification of the exchange rate windows in June led to a new approach to the management of exchange rate, aimed at reducing arbitrage, rent-seeking behaviour, and speculation in the market.
Cardoso added: “The policy aims to create a market where the demand and supply of foreign exchange determines the exchange rate.
“The premium has narrowed and our focus on increasing the autonomous FX supply will lead to more stability and further narrowing of the premium.
“Total trade in the third quarter of 2023 stood at N18.8 billion and exports valued at N10.3 billion, while total imports stood at N8.4 billion.”
This, according to him, represents a positive trade balance which will lead to an increase in the external reserves.
Cardoso, however, said due to domestic prevailing factors, less revenue would be earned from oil exports in 2024.
He said: “We expect less revenue from oil exports due to the production limit of 1.78mbpd in 2024. The OPEC-approved quota for Nigeria is 1.8mbpd, which is higher than the 2024 budget assumption.
“However, the country’s production has been below these thresholds. The budget benchmark for 2023 was 1.69mbpd but the highest level of production during the year was about 1.35mbpd in Q3 of 2023.
“The reasons for the underperformance of the oil production target include crude oil theft and pipeline vandalism, production shut-ins, and divestments by major oil companies.”
Speaking, the Chairman of the Joint Committee, Senator Tokunbo Abiru, said the interactive session was organised for a statutory briefing by CBN, in line with extant laws.
The co-chairman of the committee, Mohammed El-Rufai, commended Cardoso and the management team of the CBN on measures being put in place to stabilise the nation’s economy.
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