Nigeria’s external reserve surged by $6.8 billion, reaching $40.19 billion in December 2024. This resulted from an increase in Balance of Payment (BOP) surplus and a reduction in Net Errors and Omissions (NEO).
The latest data from the Central Bank of Nigeria (CBN) BOP report reveals that Portfolio Investment inflows grew by 106.5%, rising to $13.35 billion in 2024, from $6.47 billion in 2023. This influx of foreign currency boosted the external reserves.
Similarly, Other Investment (OI) assets increased significantly to $4.64 billion, from a negative $0.93 billion recorded in 2023. However, Direct Investment inflows declined by 42.3%, falling to $1.08 billion in 2024 compared to $1.87 billion in 2023.
Nigeria’s overall BOP recorded a surplus of $6.83 billion showing higher earnings from foreign transactions compared to expenses.
Again, NEO decreased significantly by 79.5%, falling to negative $5.10 billion in 2024, from $24.90 billion in 2023. This improvement was due to better data availability and more accurate reporting.
Nigeria’s external reserves include foreign assets, liquid assets like gold bars, and convertible currencies held by CBN.
These reserves act as a financial buffer in times of external imbalances, helping stabilize the currency and economy.
The surge in reserves enhances investors’ confidence in Nigeria’s economy and provides funds to mitigate economic shocks.
