Forex remittances hit $600m in September — Cardoso
…Blames previous administrations for failing to diversify economy
By Matthew Denis, Abuja
The Governor of the Central Bank of Nigeria (CBN), Mr. Yemi Cardoso has disclosed that there’s an increment in forex inflow into the country from $200million to approximately $600 millions as at the month of September.
The CBN Governor made the disclosure while speaking as a guest at a special summit dinner organised by the Nigerian Economic Summit Group (NESG).
The CBN Governor clarified that the bank does not directly set the foreign exchange (FX) rate in Nigeria.
He said, “When I assumed office, the country was receiving around $200 million in FX inflows. However, through determined efforts by the CBN and other authorities, inflows have now increased to approximately $600 million last month.”
The Governor emphasised that the exchange rate is determined by economic factors and market fundamentals. This clarification was made during a panel discussion at the launch of the Nigeria Development Update in Abuja.
During the event, Mr. Cardoso highlighted the importance of understanding how the FX rate is decided.
“The CBN does not determine the exchange rate; it is determined by the fundamentals. The CBN will ensure that we adhere to that,” he said.
By this, he means that the exchange rate is influenced by the overall health of the economy, such as supply and demand, inflation, and international trade, rather than by any direct action of the central bank.
He also shared his commitment to follow traditional central banking practices, ensuring that the CBN focuses on its core mandate of maintaining monetary stability.
Cardoso is optimistic that with improved collaboration between the CBN and the country’s fiscal authorities, there will be more stability in the foreign exchange market.
The aim is to create a more predictable and stable exchange rate environment in Nigeria.
In addition to his comments on the exchange rate, Cardoso discussed recent successes in boosting foreign exchange inflows into the Nigerian economy
He believes this growth reflects a positive change in investor confidence in Nigeria.
“Before, many potential investors were on the sidelines. Now, it’s amazing to see how many have stepped forward to invest in Nigeria,” he added.
The increase in FX inflows is a significant improvement for Nigeria’s economy, as it provides more foreign currency to support trade and investments.
Additionally, the country has seen a drop in inflation to 32.15 percent as of September 16, 2024, which is a positive indicator for economic stability he stressed.
On recapitalization the Governor noted, “The approach we’re taking on the recapitalization at the CBN — when I announced, I didn’t give a figure but I felt it was important we should let them know that it will happen — since that period, devaluation has been going on. It was deemed for banks to increase their capital.
“It is important to state here that we have given enough time since we announced the recapitalization policy. We have given them another two years to choose the category of the licence they want. We are not being stringent but want them to comply seamlessly.”
Cardoso also blamed past administrations for failing to diversify the Nigerian economy, a price he said the country is currently paying.
Cardoso added: “I also believe that we need to acknowledge our past mistakes. We missed opportunities to diversify our economy, and now we face challenges because of it. Diversifying would have helped mitigate some of the economic shocks we’ve experienced.”
On the rising cost of food and fuel prices, the CBN governor pointed out that short-term pain was necessary to achieve long-term price stability in Nigeria.
The CBN governor however assured that the bank remained committed to stabilising the economy and macroeconomic parameters to serve the wellbeing of all Nigerians.
The CBN governor told the audience that taking control of inflation was key, stressing that if the country does not address inflation, it significantly impacts investment and purchasing power, affecting those engaged in productive activities.
