The Central Bank of Nigeria (CBN) has announced a remarkable Balance of Payments (BOP) surplus of $6.83 billion for the 2024 financial year, marking a significant recovery from the $3.34 billion deficit recorded in 2023 and the $3.32 billion deficit in 2022.
In a statement released on Wednesday, the CBN attributed the surplus to the positive impact of broad-ranging macroeconomic reforms, improved trade performance, and renewed investor confidence in Nigeria’s economy. These reforms have paved the way for a more resilient financial environment, enhancing Nigeria’s position on the global economic stage.
Strong Performance Across Trade and Financial Accounts
According to the CBN, the current and capital accounts for 2024 recorded a substantial surplus of $17.22 billion, largely driven by a $13.17 billion surplus in goods trade. This was a direct result of Nigeria’s increasing export performance and a notable reduction in import spending.
On the import side, petroleum imports dropped by 23.2%, amounting to $14.06 billion, while non-oil imports saw a decline of 12.6%, totaling $25.74 billion. The decline in oil imports coincided with the operational launch of the Dangote Refinery, which began supplying petrol to the domestic market in September 2024.
Export Growth and Remittance Inflows Boost Financial Health
Nigeria also saw a strong export performance, with gas exports increasing by 48.3%, amounting to $8.66 billion. Additionally, non-oil exports grew by 24.6% to $7.46 billion. These gains were pivotal in improving the country’s overall trade balance.
Remittance inflows continued to show resilience, rising by 8.9% to $20.93 billion. Inflows through International Money Transfer Operators (IMTOs) surged by 43.5%, reaching $4.73 billion, reflecting increased engagement from Nigeria’s diaspora.
Growth in Financial Assets and External Reserves
On the financial account, Nigeria recorded a net acquisition of $12.12 billion in financial assets. Portfolio investments saw an impressive increase of 106.5%, rising to $13.35 billion, while resident foreign currency holdings grew by $5.41 billion, signaling stronger confidence in Nigeria’s economic outlook.
However, foreign direct investment (FDI) saw a decline of 42.3%, totaling $1.08 billion. Despite this, the overall financial account posted positive growth, demonstrating the resilience of Nigeria’s economic recovery.
Strengthened External Reserves
The country’s external reserves also saw a boost, rising by $6.0 billion to $40.19 billion by the close of 2024. This increase significantly strengthens Nigeria’s external buffer, providing a more robust foundation for the country’s future financial stability.
In response to these developments, CBN Governor Olayemi Cardoso commended the positive turnaround, calling it a testament to the effectiveness of the policy interventions and Nigeria’s steadfast commitment to ensuring macroeconomic stability. He also highlighted that the surplus not only benefits investors but also creates an environment conducive to growth for businesses and Nigerians alike.
With the balance of payments surplus and a solid increase in reserves, Nigeria is poised for a brighter economic future, as these achievements reflect the success of ongoing economic reforms and investor confidence in the country’s potential.
