The net foreign exchange inflow to the Nigerian economy in the third quarter of the year decreased by 2.97 percent to $14.46bn from $14.89bn in the preceding quarter.

This was released by the Central Bank of Nigeria in its third-quarter economic report published on Friday.

On a quarter-on-quarter basis, net foreign exchange in the third quarter decreased by 2.97 percent however compared to the third quarter of 2023, net foreign inflow had increased by 75.91 percent from $8.22bn to $14.46bn.

In Q3, foreign exchange inflow increased by 3.01 percent to $22.89bn from $22.22bn in Q2 2024. Also, inflows through official sources increased in Q3 as those of autonomous sources declined.

The report said, “Inflows through the bank rose by 39.63 percent to $11.86 billion from $8.49bn, while autonomous sources fell by 19.66 percent to $11.03bn from $13.72bn in the preceding quarter. Foreign exchange outflow through the economy rose by 15.18 percent to $8.43bn, relative to the level in Q2 2024. Outflows through the bank rose by 27.91 percent to $7.31bn, while those through autonomous sources decreased by 30.06 percent to $1.12bn.

“Consequently, net foreign exchange inflow through the economy decreased by 2.97 percent to $14.46bn, from $14.89bn in the preceding quarter. However, net inflow through autonomous sources fell to $9.90bn from $12.12bn in the preceding quarter. A net inflow of $4.55bn was recorded through the bank compared with a net outflow of $2.78bn in the preceding quarter.”

The Governor of the Central Bank of Nigeria, Olayemi Cardoso, during a recent meeting with the Senate Committee on Banking, Insurance, and Other Financial Institutions, revealed that diaspora remittances processed through International Money Transfer Operators between January and October 2024 reached $4.22bn.

This figure is nearly double the $2.62bn recorded during the same period in 2023. Cardoso added that on a monthly analysis, remittances increased from $336m in September 2024 to $402m in October 2024.

He attributed this surge to improved efficiency in the remittance system, the favorable effects of President Bola Tinubu’s policies, and the growing trust among Nigerians in the Diaspora to support national development.

Meanwhile, in the same quarter, the average exchange rate at the Nigerian Autonomous Foreign Exchange Market depreciated by 14.62 percent to N1,588.64/$, from N1,385.96/$ in Q2’2024, owing to increased demand pressure.

Also, the external reserves rose to $39.29bn from $34.76bn at end-September 2024. This level of reserves could cover 8.91 months of imports for goods and services or 13.34 months for goods only.

In its projections on the domestic economy, the CBN report said, “For the remaining three months in the year 2024, inflation is expected to remain elevated. This expected rise is on account of the impact of ongoing policy reforms, leading to an increase in both energy and transport costs. However, the banks’ sustained contractionary stance, the relative stability at the foreign exchange market, as well as the continuous harvest of some food staples could contribute to moderating inflation.

“Fiscal outlook remains bright in the near- to medium-term, as fiscal reforms continue to exert favorable outcomes, evident in contracting fiscal deficits and higher revenue collection. The volatility in global crude oil prices, coupled with low production vis-à-vis the OPEC quota, are, however, risks to the outlook. The external sector is expected to remain strong in 2024, driven by sustained improvements in trade surplus, higher domestic crude oil production, and the full operation of the Dangote and Port Harcourt refineries. Global economic conditions are also anticipated to be supportive, with easing inflation in advanced economies, which will stimulate trade and investment.”

Nigeria’s inflation as of November stood at 34.60 percent driven by food and energy costs, reflecting a 0.72 percent increase from October’s rate of 33.88 percent.

There are mixed projections about what the December inflation figure would be; however, it is not likely to be as low as the 21.4 percent that the apex bank projected in its 2024 macroeconomic outlook for the year.