How Nigeria experienced a massive net FX inflows in 2024

• The Nigerian economy experienced a net forex inflow of $7.6 billion in the first half of 2024 
• CBN data says that the increase was due to a 34.6% yearly increase in net inflows via autonomous sources
• The development comes as the Nigerian currency appreciated marginally in the official market

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

Net FX inflows to Nigeria increased by 67.8% to $7.6 billion in the first half of 2024 from $16.44 billion recorded in 2023.

The development is due to a 34.6% yearly rise in net inflows via autonomous sources and a 170% annual increase in FX inflow via the Central Bank of Nigeria (CBN).

Foreign exchange inflow in the official market rises in 2024. Credit: Bloomberg/Contributors
Source: Getty Images

The primary sources of FX inflows

Data from the CBN shows that the FX inflow to Nigeria’s economy increased yearly by 41.6% to $47.73 billion in the first half of 2024 and from $33.7 billion in the corresponding period in 2023.

Also, gross inflows via autonomous sources rose by 47.6% yearly to $31.15 billion in the first half of 2024 from $21.16 billion in the first half of 2023.

According to reports, FX outflows from Nigeria increased by 16.3% yearly to $20.12 billion in the first half of 2024 from $17.3 billion recorded in the same period last year.

Nigeria’s dollar outflows rise

Also, outflows via autonomous sources increased by 160.8% yearly to $5.4 billion in the first half of 2024 from $2.07 billion recorded in 2023.

The CBN data shows that the development was due to a 34.6% yearly increase in net inflows via autonomous sources and a 170% increase in net FX inflow via the CBN.

Meanwhile, FX outflows from the economy spiked by 16.3% yearly to $20.12 billion in the first half of 2024 from $17.3 billion recorded in the first half of last year.

Also, outflows via autonomous sources increased drastically by 160.8% yearly to $5.4 billion in the first half of 2024 from $2.07 billion recorded in the first half of 2023.

Net inflows via autonomous sources increased by 34.6% yearly to $25.7 billion in the first half from $19.09 billion in the first half of 2023.

Outflows via the apex bank declined by 15% to $14.7 billion from $17.29 billion in the first half of 2023.

IMTOs contribute to FX inflows

Net inflows through the CBN increased 170% yearly to $1.86 billion in the first half of 2024 from $2.64 billion in the first half of 2023.

BusinessDay reports that International Money Transfer Operators (IMTOs) inflows rose by 47% yearly to $2.33 billion in the first half of 2024 from $1.58 billion in the first half of 2024.

The naira appreciates in the official market

This development comes amid the CBN's recent measures, which allowed the IMTOs to access naira liquidity at the official window.

CBN disclosed that the measures aim to make the FX markets more efficient and raise remittance flows via formal channels.

This development comes as the Nigerian currency appreciated marginally in the official market on Thursday, October 10, 2024.

The naira increased in value by 0.16% to close at N1,622.77 per dollar, up from the N1,625.13 it traded on October 9, 2024.

Naira Reverses Gain in the official window

Legit.ng earlier reported that the Nigerian naira depreciated in the official market on Wednesday, October 9, 2024.

Nigerian Autonomous Foreign Exchange Market (NAFEM) Traders quoted the US dollar at N1,625.13 per dollar as against the N1,561.76 it traded on Tuesday, October 8, 2024.

Data from the FMDQ Exchange shows that the exchange rate in the official window depreciated to N1,625.13 per dollar from the N1,561 it traded the previous, showing an N63.37 drop in the official window.

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Source: Legit.ng