Nigerians utilised $4.1 FX in Q4 2023 –CBN

Latest quarterly Statistical Bulletin from the Central Bank of Nigeria (CBN) reveals that Nigerians consumed more foreign exchange (FX) in the final quarter (Q4) of 2023, with a 21 per cent increase from the previous quarter, totaling $4.1 billion.

This rise was primarily driven by a significant increase in FX usage for invisible imports, which jumped by 55 per cent quarter-on-quarter (q/q) to $1.5 billion.

Despite the quarterly increase, the figure represents a substantial year-on-year (y/y) decline of 46 per cent and marks the second lowest recorded over the past eight quarters, FBNQuest said in a report on Thursday.

Meanwhile, merchandise imports accounted for 64 per cent of total FX utilisation, growing by 21 percent q/q to $2.6 billion.

In the realm of goods imports, the industrial sector emerged as the largest consumer of FX, utilising $1.3 billion, or 51 per cent of the total FX for goods.

However, this represents a 4 per cent q/q decline. Food product imports increased by 8 percent q/q, amounting to $493 million and accounting for 19 per cent of the total. Manufactured products followed, with imports amounting to $340 million, representing 13 per cent of the total FX used for goods.

Within the invisibles segment, financial services dominated, accounting for nearly $1.5 billion, which is a 41 per cent q/q increase and represents approximately 72 per cent of the total FX used by invisibles.

Business services also saw a significant rise, increasing by almost 250 per cent q/q to $225 million.

The CBN’s data indicate that, excluding the uptick in Q4 2023, the overall trend of FX utilisation has been declining since Q4 2022, reflecting the prevailing FX liquidity challenges during that period.

“Looking ahead, the CBN anticipates higher FX utilisation figures in the coming quarters. This expectation is based on the relative improvement in FX access for firms and other users, following the implementation of reforms aimed at enhancing market liquidity,” analysts at FBNQuest said.

Meanwhile, the Naira appreciated by 0.5 per cent to close at N1,481.49/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM).

-By Chinwendu Obienyi

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