Nigeria attracted $5.96 billion in monthly foreign exchange inflows since May, representing a 62% increase driven by economic reforms and restored investor confidence.
The surge reflects growing market optimism following comprehensive policy changes implemented by the Central Bank of Nigeria and federal government. Foreign exchange availability has improved significantly, supporting manufacturing and retail sectors.
Financial Derivatives Company analysts attributed the increase to rising international oil prices and CBN measures expanding foreign exchange sources. New diaspora remittance products and additional International Money Transfer Operators contributed to enhanced dollar availability.
Key reforms include foreign exchange market liberalization, discontinuation of CBN deficit financing, fuel subsidy removal, and improved revenue collection systems. These measures restored confidence in Nigeria’s economic policy direction.
“The FX inflow boost reflects economic reforms initiated by the CBN under Governor Olayemi Cardoso, alongside fiscal policy changes that have attracted more foreign capital,” industry analysts noted.
Nigeria’s net foreign exchange reserves reached $23.11 billion by end-2024, the highest level in three years. This represents a substantial increase from $3.99 billion recorded in December 2023, demonstrating improved external position strength.
Gross external reserves climbed to $40.19 billion from $33.22 billion in December 2023, reflecting CBN strategies to reduce short-term foreign exchange liabilities and restore market confidence.
The improved liquidity enabled Nigerian banks to lift restrictions on naira-denominated debit cards for foreign transactions, demonstrating practical benefits of enhanced dollar availability.
Governor Cardoso’s leadership since October 2023 has prioritized macroeconomic stability through strengthened monetary policy tools and external buffer rebuilding. These efforts have removed market distortions that previously hindered investment flows.
Nigeria’s December 2024 return to international capital markets further bolstered investor sentiment. Combined with credit rating upgrades and new refinery operations, these developments position the country for enhanced value addition and stronger external earnings.
The sustained foreign exchange improvements build resilience against external shocks while creating stable operating environments for investors and manufacturers. Continued policy discipline and private sector participation remain crucial for maintaining these gains.
About The Author
