Nigeria’s Forex Inflows Surge To $2.3bn in February, Thanks To Increased Remittances
NIGERIA, grappling with persistent dollar shortages and currency devaluation, witnessed a remarkable surge in foreign exchange inflows, reaching $2.3bn in February. The surge, attributed to renewed interest from foreign investors and a notable increase in overseas remittances, signifies a promising turn in Africa’s largest economy.
Hakama Sidi Ali, spokesperson for the Central Bank of Nigeria, affirmed that foreign investors injected at least $1bn into Nigerian assets in the previous month, contributing to a total of $2.3bn in portfolio inflows. This surge contrasts sharply with the $3.9bn recorded for the entirety of 2023, reflecting a substantial acceleration in investment activities.
Sidi Ali noted, ‘The surge in foreign exchange inflows underscores growing confidence in Nigeria’s economic prospects. Foreign investors recognise the potential for attractive returns in the Nigerian market, driving increased investment across various sectors.’
Furthermore, CBN data revealed a significant uptick in overseas remittances, soaring to $1.3bn in February compared to a meagre $300 million in the preceding month. Governor Olayemi Cardoso expressed optimism, stating, ‘The measures implemented by the CBN to bolster reserves and enhance market liquidity are yielding promising results.’
Governor Cardoso emphasised, ‘We are witnessing the positive impact of our policies on economic stability and investor confidence. The surge in foreign exchange inflows is a testament to the resilience of the Nigerian economy and our commitment to fostering sustainable growth.’
Highlighting ongoing momentum, Sidi Ali disclosed that higher forex inflows have persisted into March, driven by heightened investor interest in short-term sovereign debt. This interest surged following the CBN’s decision to raise its key interest rate by 4 percentage points to 22.75 percent, the highest in approximately 17 years, aimed at curbing rampant inflation.
During the CBN’s Open Market Operation auction on March 6, where securities worth 1.053 trillion naira were sold, bids from foreign investors accounted for a substantial 79 percent of the total, equating to $530 million. This influx of foreign investment underscores growing confidence in Nigeria’s economic outlook and the effectiveness of the CBN’s policies in fostering stability and growth.
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