The Nigerian economy is showing signs of recovery as the Central Bank of Nigeria (CBN) announced a significant Balance of Payments (BOP) surplus of $6.83 billion for the 2024 financial year. This marks a decisive turnaround from the previous years, with BOP deficits of $3.34 billion in 2023 and $3.32 billion in 2022.
Key Drivers of Economic Growth
According to a statement from the CBN, the surplus reflects the positive impact of comprehensive macroeconomic reforms, stronger trade performance, and renewed investor confidence in Nigeria’s economy.
The current and capital accounts recorded a combined surplus of $17.22 billion in 2024. This was driven by a goods trade surplus of $13.17 billion. Additionally, petroleum imports fell by 23.2% to $14.06 billion, while non-oil imports also decreased by 12.6% to $25.74 billion.
On the export side, gas exports saw a robust 48.3% increase, reaching $8.66 billion, while non-oil exports grew by 24.6% to $7.46 billion. This growth in exports has significantly boosted Nigeria’s external account performance.
Remittance and Financial Inflows
Remittance inflows continued to show resilience, with personal remittances rising by 8.9% to $20.93 billion. Additionally, International Money Transfer Operator (IMTO) inflows surged by 43.5% to $4.73 billion, up from $3.30 billion in 2023, reflecting stronger contributions from the Nigerian diaspora.
Official development assistance also rose by 6.2% to $3.37 billion, providing further support to the country’s external finances.
Stronger Financial Account and Reserve Position
The country’s financial account also showed strong performance, with a net acquisition of financial assets totalling $12.12 billion. Portfolio investment inflows more than doubled, increasing by 106.5% to $13.35 billion, while resident foreign currency holdings grew by $5.41 billion, indicating enhanced confidence in Nigeria’s economic stability.
Despite a 42.3% decline in foreign direct investment (FDI), which fell to $1.08 billion, Nigeria’s financial account posted significant gains overall. Furthermore, Nigeria’s external reserves increased by $6.0 billion to $40.19 billion by the end of 2024, bolstering the country’s external buffer.
Improved Data Integrity
A notable improvement in the country’s economic data was observed, with net errors and omissions narrowing significantly by 79.5% to a negative $5.10 billion in 2024, down from $24.90 billion in 2023. This highlights substantial progress in data accuracy, transparency, and overall reporting integrity.
Positive Outlook and Policy Impact
The 2024 BOP surplus underscores the success of Nigeria’s ongoing economic reforms. The CBN credited the liberalisation and unification of the foreign exchange market, disciplined monetary policies to manage inflation and stabilise the naira, and coordinated fiscal and monetary measures for contributing to the country’s improved economic position.
The CBN Governor commented, “The positive turnaround in our external finances is evidence of effective policy implementation and our unwavering commitment to macroeconomic stability. This surplus marks an important step forward for Nigeria’s economy, benefiting investors, businesses, and everyday Nigerians alike.”
With this impressive performance, Nigeria’s economic outlook for the coming years looks promising, driven by reforms, a stabilising naira, and growing investor confidence.
