Nume Ekeghe

In a remarkable display of economic resilience and growth, Nigeria’s external reserves have surged to a new peak, reaching $34.65 billion as of July 4, 2024.

This marks the highest level of reserves recorded in the past 13 months, surpassing the previous high of $34.65 billion on June 14, 2023, and reflecting a consistent upward trajectory over the first half of the year.

Latest from the Central Bank of Nigeria (CBN) revealed a robust performance, with significant increments noted at various intervals.

For instance, on July 3, 2024, the reserves stood at $34.55 billion, and just a day earlier, on July 2, 2024, they were reported at $34.43 billion.

The growth pattern was evident throughout June 2024 as well. By the end of June, on the 28th, the reserves were $34.19 billion, showing a steady climb from $33.91 billion in June 24, 2024.

This pattern continued with the reserves surpassing the $34 billion mark consistently towards the latter part of the month.

May 2024 also contributed to this upward momentum, with the reserves maintaining a steady increase. On May 31, 2024, the reserves stood at $32.69 billion, gradually rising from $32.30 billion at the start of the month.

April 2024 further cemented this trend, as the reserves saw a notable rise from $32.15 billion on April 26, 2024, to $33.50 billion by April 3, 2024, marking a significant influx of foreign exchange.

March 2024 was another pivotal month, with the reserves climbing from $33.82 billion on March 28, 2024, to a high of $34.41 billion by mid-March. The consistent upward movement during this period underscores the stable economic environment and the increasing investor confidence.

The reserves continued their ascent through February 2024, starting at $33.17 billion on February 5, 2024, and reaching $33.71 billion by the end of the month. This steady increase reflects the positive impact of economic reforms and strategic investments.

January 2024 set the stage for this growth trajectory, with the reserves beginning at $33.01 billion on January 2, 2024, and progressively increasing to $33.35 billion by the end of the month.

December 2023 provided a strong foundation, with the reserves standing at $32.91 billion by December 29, 2023.

Overall, the continuous rise in financial reserves to a 13-month high of $34.65 billion is a testament to the strong economic policies, investor confidence, and stable market environment.

 Meanwhile, a report by Afrinvest noted that Nigeria’s capital importation surged to $3.38 billion in Q1:2024, marking a significant 198 per cent increase year-over-year and an even higher 210 per cent increase from the previous quarter, according to the National Bureau of Statistics (NBS).

This is as direct investment continued to decline. It further stated: “Conversely, foreign portfolio investment (FPI), which constitutes the largest component of total capital importation 61.5 per cent, advanced by 219.7 per cent y/y and 570.1 per cent q/q to $2.1 billion. This growth was driven by increased inflows into the money market and bond market up 1,175.2 per cent and 39.8 per cent year-over-year; 592.7 per cent and 526.6 per cent q/q, respectively) due to an improved interest rate environment.

“Since the start of the year, the Central Bank of Nigeria (CBN) under Cardoso has increased interest rates by 750bps, pushing yields on both treasury and OMO bills to 27 per cent, making them attractive to FPIs for short-term investments. Although equity investments declined y/y, they advanced by 355 per cent q/q. 

“For Q2: 2024, we expect capital importation data, particularly FPI, to continue its upward trajectory as the economy grapples with the high interest rate environment. However, we do not anticipate a major surge in FDI inflows due to persistent challenges such as a poor investment climate, insecurity, and continued FX volatility, which may continue to deter long-term investments,” the report stated.