In 2024, remittance inflows into Nigeria reached $20.98 billion, a nine percent increase from the previous year and the highest level in five years, under the leadership of Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN). This surge in remittances comes after several years of fluctuation, with 2019 being the last time the country saw higher inflows at $23.8 billion. Personal remittances also saw a significant rise, with a notable 8.9 percent increase, while inflows through International Money Transfer Operators (IMTOs) jumped by 43.5 percent. These numbers highlight stronger ties between Nigeria and its diaspora, bolstered by new CBN policies that encourage the use of formal remittance channels.
The growth in remittances has contributed to an overall positive shift in Nigeria’s external finances. The country’s external reserves increased by $6 billion, reaching $40.19 billion by the end of 2024. This boost in reserves was accompanied by an increase in portfolio investments and a rise in foreign currency holdings, signaling renewed confidence in Nigeria’s economy. However, the value of the naira depreciated by 40.9 percent against the dollar during the same period, closing the year at N1,535 per US dollar, reflecting ongoing challenges in the foreign exchange market.
Despite this depreciation, Nigeria remains a leader in remittances within Africa, significantly outpacing other countries such as Ghana and South Africa. The country’s improved financial account also shows positive trends, with a net acquisition of financial assets totaling $12.12 billion and a balance of payments (BOP) surplus of $6.83 billion, reversing the deficits of previous years. Analysts attribute these developments to Nigeria’s economic reforms, including the liberalization of the foreign exchange market and other policy measures aimed at attracting investment and fostering economic stability.
Looking ahead, Cardoso expressed optimism about the continued recovery of Nigeria’s economy, pointing to the stabilizing foreign exchange market, growing trade, and improved data transparency as signs of progress. The CBN governor also reaffirmed his commitment to collaborating with the Nigerian diaspora, particularly in the Middle East, to further boost remittance flows. With the support of ongoing monetary and fiscal policies, Nigeria aims to sustain this positive momentum and improve economic conditions for both businesses and citizens alike.
Source: business day