How CBN's international payments increased in the first 5 months of 2024

• A report from the Central Bank of Nigeria (CBN) shows that Nigeria increased its international payments
• The payments include external debt servicing, letters of credit, and fees for goods and services
• However, Nigeria’s FX reserves rose by about $36.85 billion, and the naira appreciated to N1,574 per dollar

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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Central Bank of Nigeria (CBN) reported an increase in international payments of $3.31 billion in the first five months of 2024.

The figure represents a sharp increase of 30.8% rise from the $2.53 billion recorded during the same period in 2023.

President Bola Tinubu and CBN governor, Olayemi Cardoso Credit: Bloomberg/Contributor
Source: Getty Images

Nigeria increases foreign debt servicing

Recent data from the apex bank shows that international debts, including foreign debt servicing, remittances, and payments for goods and services, are critical in maintaining Nigeria’s economic stability as they directly impact the country’s foreign reserves, including the exchange rate and other financial conditions.

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The rise in payments was driven by a 96.3% increase in foreign debt servicing, which accounts for $2.19 billion or 66.1% of the total costs.

The rise shows the government's efforts to meet international financial obligations amid a challenging economic terrain.

According to reports, apart from debt servicing, direct remittances increased by 28.5% yearly to $841.37 million, showing a growing demand for international services by Nigerians.

However, payments for letters of credit declined by 63.3% every quarter, dropping to $279.99 million from $762.03 million in the same period in 2023.

Foreign reserves rise, the naira appreciates

A previous report by Legit.ng disclosed that Nigeria’s FX reserves grew by $12.06 million weekly to $36.85 billion.

The improvement came amid a 2.7% appreciation of the naira, which ended last week, appreciating N1,574.20 per dollar in the official market.

The rise in the local currency was due to the CBN’s Retail Dutch Auction System (rDAS), which propelled the naira to the new rate against the dollar.

Data from the FMDQ Exchange reveals that the total turnover in the Forex market declined by 58.7% week-to-date to about $472.67 million.

Total FX trades were conducted within the N1,520 per dollar to N1,628 range.

Nigeria successfully repays China, World Bank, others

Legit.ng earlier reported that data released by the CBN has shown the total amount of external debt servicing in 2023 from January to October.

During the ten months, the nation paid $3.07 billion in servicing its foreign debt. The amount represents an increase of $850.42 million or 38.31% over the $2.22 billion it spent during the same time in 2022.

A breakdown of the data showed that to service its external debt, the government spent $112.35 million in January, $288.54 million in February, and $400.47 million in March.

Source: Legit.ng