1 week ago
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By Chinwendu Obienyi
The Central Bank of Nigeria (CBN) facilitated $5.63 billion in international payments during the first nine months of 2024, data from the apex bank international payment report revealed.
This highlights ongoing efforts by the apex bank to manage foreign exchange liquidity amidst challenges such as naira depreciation and rising inflation.
According to the Central Bank of Nigeria (CBN), international payments facilitated by the apex bank marginally increased by 2.7 per cent year-on-year (y/y) to $5.63 billion in nine months of 2024 as against $5.48 billion recorded in the corresponding period of 2023.
This surge in foreign payments aligns with broader trends observed earlier in the year, where international payments rose by 31 per cent between January and May 2024 compared to the same period in 2023.
Cordros Research in its analysis attributed the increase to the significant rise in foreign debt service payments, which accounted for 63.6 per cent of the total international payments and grew by 39.8 per cent y/y to $3.58 billion (9M 2023: $2.56 billion), reflecting the country’s increasing financial obligations in the global market.
However, other categories like payments for letters of credit declined by 52.5 per cent y/y to $506.06 million (9M 2023: $1.07 billion), partly reflecting lower imports amid weaker consumer demand.
Similarly, direct remittances declined by 16.7 per cent y/y to $1.55 billion (9M 2023: $1.86 billion) due to decreased payments for international services by Nigerian residents.
“Looking ahead, we expect international payments to remain elevated, primarily due to FG’s debt repayment and servicing obligations. Subsequently, as foreign exchange liquidity improves and consumer demand strengthens over the medium term, we expect to see a gradual rise in imports of goods and services, which will in turn cause increases in payments of letters of credit and direct remittances”, analysts at Cordros Research said.
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