Nigeria’s external reserves have reached a 22-month high of $37.31bn, reflecting significant foreign inflows into the country’s economy.

Data from the Central Bank of Nigeria (CBN) revealed that as of September 18, 2024, the reserves hit the highest level since November 4, 2022, when they stood at $37.36bn.

This marks a notable recovery in Nigeria’s foreign currency position.

The external reserves represent the country’s stock of foreign currency. However, they have failed to make a real impact on the falling naira, which was adjudged one of the 10 worst-performing currencies in the world by Bloomberg on September 20. The reserves serve as a crucial measure of the country’s ability to meet international financial obligations and stabilise the local currency.

On a year-to-date basis, the country’s reserves surged by 12.99 per cent, or $4.29bn, from the $33.02bn recorded at the start of the year on January 2, 2024.

Several factors have contributed to the increase in external reserves. Key sources of the inflows include the federal government’s domestic dollar bonds, which attracted foreign investment; remittance inflows from Nigerians abroad; multilateral loans from international organisations; and foreign portfolio investments.

When compared year-on-year, Nigeria’s foreign reserves grew by 12 per cent, adding $4.03bn to the $33.28bn recorded on September 18, 2023.

The federal government raised over $900m from investors through the issuance of $500m, the first series of the $2bn domestic US dollar bond aimed to stabilise the economy.

Nigeria recorded $553m in remittances in one year, between July 2023 and July 2024, according to the CBN.

Other inflows into the country’s economy within the period include $3.3bn AfreximBank oil facility and $2.25bn from the World Bank Group.

The foreign exchange inflows through the economy surged by 57 per cent in one year following consistent policies by the CBN.

Data from the CBN showed that the country recorded $8.86bn in FX inflow in February 2024, higher than $5.66bn in the corresponding period of February 2023.

The CBN’s economic report for February 2024 noted that new investments into the economy increased significantly to $1.24bn, compared with $0.33bn in January 2024.

Foreign direct investment inflow rose to $0.06bn, from $0.03bn in the preceding month. Portfolio investment inflow increased to $0.80bn from $0.12bn, following rising returns on money market instruments and bonds. Similarly, other investment capital, mainly loans, rose to $0.37bn, from $0.18bn in the preceding period.

The Nigerian Railway Corporation (NRC) has recorded a growth of 45.38 per cent in passengers who travelled through the rail in second quarter of 2024.

  This data was released by the Nigerian Bureau of Statistics (NBS) in its Rail Transportation Data (Q2 2024) released at the weekend. 

  In Q2 2024, a total of 689,263 passengers travelled via rail system relative to 474,117 reported in the corresponding quarter of 2023, indicating a growth rate of 45.38%.

 The NRC also in terms of revenue generation, N1.69 billion was received from passengers during the reference period, showing an increase of 53.14 per cent from the N1.10 billion recorded in the same quarter of the previous year. 

  The volume of goods/cargo transported via rail in Q2 2024 stood at 143,759 tons compared to 56,936 tons recorded in Q2 2023. 

  In the quarter under review, the NRC reported an additional volume of goods/cargo transported via pipeline which stood at 5,940 tons, higher than 2,856 tons in Q2 2023.

  Similarly, N537.36 million was collected from goods/cargo con veyed via rail in Q2 2024, up by 206.68 per cent from N175.22 million received in Q2 2023.

   In addition, revenue generated from the movement of goods/cargo via pipeline stood at N42.08 million in Q2 2024, higher than the N12.81 million reported in the corresponding period of last year. 

  Other receipts amounted to N994.68 million, indicating an increase of 5,206.68 per cent in Q2 2024 from the N18.74 million received in Q2 2023.

Coca-Cola will invest $1 billion in Nigeria over the next five years, foreseeing “significant social and economic advancements” as the West African nation tries to fix the economy.

President Bola Tinubu’s media adviser Bayo Onanuga said Thursday that the beverage giant announced the plan during a meeting between Tinubu and Coca-Cola’s global leadership.

Several multinationals have shuttered operations in Africa’s most populous nation, citing a challenging business environment and lack of access to foreign currency.

“Over the next five years, with a predictable and enabling environment in place, (Coca-Cola) plans to accelerate its investments in Nigeria to reach $ 1 billion,” the US-based giant said in a statement.

Coca-Cola said the investment will provide support for its value chain including “suppliers, distributors, retailers, and recyclers.”

“We are building a financial system where you can invest, re-invest, and repatriate all your dividends,” Tinubu said in a statement.

It is a respite for Nigeria which has been seeking foreign direct investment to strengthen its economy and boost dollar liquidity.

Nigeria’s economy took a hit after Tinubu removed government backing for the local naira currency and ended long-standing fuel subsidies immediately after coming to power in May 2023.

Tinubu says despite the short-term pain, the reforms will benefit Nigeria and bring in foreign investment.

Inflation slowed for the second consecutive month in August to 32.15 percent after reaching almost a three-decade high of 34.19 percent in June.

Coca-Cola said it foresaw “significant social and economic advancements” in Nigeria.

“Our investment goes beyond business growth; it’s about contributing to the well-being of the communities we call home,” said Zoran Bogdanovic, the CEO of Coca-Cola Hellenic Bottling Company — one of the Coca-Cola’s many bottlers worldwide.

Coca-Cola’s business in the country, the Nigerian Bottling Company, was registered in 1951.

In 2019, it acquired local beverage maker Chi Limited after initially buying 40 percent stake in the company for $240 million in 2016.

The Federal Government has announced plans to introduce a consumer credit funding programme and a single-digit mortgage scheme aimed at easing financial burdens on Nigerians.

The initiative was revealed by the Minister of Finance and Coordinating Minister of the Economy, Mr Olawale Edun, during Access Bank’s Corporate Forum in Lagos on Thursday.

Edun stated, “Consumer credit is coming for Nigerians. It will be for the funding of manufacturing and sales of manufacturing products by giving people the opportunity to pay as they go, especially for more durable products.”

He stressed the government’s commitment to providing nearly single-digit interest rates for 25-year mortgages to stimulate the construction sector.

In addition to these financial initiatives, Edun noted the government’s collaboration with farmers, stating that 60,000 farmers would receive necessary resources, with results expected by early next year.

“This government may not be talking too much but we are working on so many things un­derground for the benefit of Ni­gerians. By next January, February, Nigerians will begin to see these harvests coming out. Things like cassava and tubers,” he said.

“Let me just emphasise once again, that all is being done to en­sure that the commitment of Mr. President to help the vulnerable, to provide them with direct trans­fers means that they can decide what is their priority, which is a very good way of intervening. As we found during COVID-19, there is the determination to succeed in that area.”

Edun also noted that the country has seen a net inflow of $2.35 billion into the Central Bank of Nigeria’s (CBN) foreign reserves over the past seven months, which has contributed to the stability of the naira.

He said, “This uptick has been the case for the past sev­en months of the year 2024. We have relative currency stability. And of course, the all-important margin of the rates. We’ve seen a gradual elimination of multiple exchange rates. We also have foreign exchange liquidity. The gross reserves are up. There has been a net inflow in the first seven months of this year of about $2.35 billion every month.

“On the fiscal side as well, government revenues are grow­ing and the key to government revenue is not so much that the government has revenue to com­pete with the private sector.”

Looking ahead, Edun projected improved gross domestic product (GDP) growth for Nigeria by 2026, with an aim to increase crude oil production to two million barrels per day before the end of 2024.

He stressed that electricity tar­iff will remain above 200kwh in bands ‘A and B’; telecom tariff will increase substantially; there will be an efficient forex auction system; unencumbered foreign reserves will be at $20 billion; inflation will continue to decline to 22 per cent; and MPR will be reduced to 20 per cent per annum.

Economist Bismarck Rewane echoed these optimistic projections, forecasting a 3.5 per cent growth in the Nigerian economy by 2026. He anticipated ongoing reforms in tariffs, foreign exchange systems, and inflation rates.

Roosevelt Ogbonna, Managing Director of Access Bank, stressed the importance of understanding the government’s fiscal policy for businesses, stating, “Government is still a large part of our economic narrative.”

The Central Bank of Nigeria (CBN) has clarified its position regarding the Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for the Fiscal Years 2024 – 2025.

The CBN on Friday clarified its position as outlined in a Monetary Policy Circular No. 45 which the Apex Bank published on its official website and X account.

“The attention of the Central Bank of Nigeria {CBN) has been drawn to certain instances of misinterpretation or misrepresentation of its biennial publication on Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines published on Tuesday, September 17, 2024,” the circular read.

“In response, the CBN has temporarily withdrawn the document to minimize risk of any further misrepresentation.

“As is stated explicitly in the document to guide stakeholders, the CBN reiterates that the publication is a compilation of previously issued policies and guidelines issued by the Bank up to a cut-off date, typically December 31 of the relevant year.

“As in all previous editions, the current document is intended to achieve the following objectives: A single reference source for the ease and convenience of stakeholders, a valid compilation of policies, directives, and guidelines for adjudication in conflict situations involving stakeholders and an additional clarification of policies and guidelines.

“As a compendium of previously issued policies and guidelines, the provisions are applicable only to the extent that there have been no updates or revisions to the guidelines and policies contained therein. This is stated explicitly in the document to quide stakeholders.

“In fine with prior editions, the most recent publication (January 2024) contains policies and guidelines issued by the Bank up to 31 December 2023, some of which will remain relevant during the period 2024-2025 However, several others may cease to apply owing to revisions or updates that become applicable in the aftermath of its publication.

“This Is clearly stated in the document as follows:
The Guidelines may be adjusted by the CBN without prior notice, to address new developments in the domestic ond global economies in the period. However, such amendments shall be communicated to the relevant institutions/ stakeholders in supplementary circulars.”

The CBN said the publication further provides the public with avenues for obtaining clarifications on the whole or any part of the document on pages 147 and 148.

It said some recent media publications referencing aspects of the Guidelines refer to policy positions of the bank issued prior to December 31, 2023 which have changed in the light of revisions and updates in 2024. In the light of these clarifications, it has asked stakeholders to note some things.

The CBN said one example is the Cyber Security Levy which was suspended in May 2024, superseding the circular reported in the guidelines.

It explained that certain technical aspects of the guidelines have been widely misreported and misrepresented.

For example, the Apex Bank said that reports have mistakenly sought to link the fuel subsidy removal to external reserves.

It clarified that such reports essentially missed the analytical basis for the original statement which was intended to observe a potential risk that was to be mitigated by policy.

More recently, it said policies of the bank around the naira exchange rate and those of the fiscal authorities have positively altered the outlook of the subject in question.

“In summary, the guidelines must primarily be viewed as a record of policies, circulars and directives issued by the bank up to the end of 2023. They are not new directives and should not be reported as such,” the circular read.

“The bank will continue to provide clear monetary policy direction and advice for the overall good of the economy. We urge all stakeholders to seek clarification of information about the bank before publishing.”

PZ Cussons, the multinational consumer goods company, has announced plans to sell its African subsidiaries, including its Nigerian operations, as part of efforts to mitigate the impact of the ongoing foreign exchange crisis.

The company’s decision follows the significant devaluation of the naira by 70%, which has heavily affected its financial performance.

In its preliminary results for the fiscal year ending May 31, 2024, PZ Cussons confirmed receiving multiple expressions of interest from potential buyers for its African business. The company is considering both partial and full sales to reduce its exposure to the naira’s volatility.

“Over the last 12 months, we have made continued operational progress and delivered against the strategic priorities set out at the start of the year, against the backdrop of macro-economic challenges,” PZ Cussons said in its preliminary results published on its website for the year ended May 31, 2024.

“At the same time, we have taken the important first steps to transform our business and maximise shareholder value, by refocusing our portfolio on where we can be most competitive.

“The period was marked by a 70 per cent devaluation of the Nigerian naira, which has had significant implications on our reported financials. We have worked hard to mitigate the impact of this on the group, while continuing to serve Nigerian consumers who are facing unprecedented inflation and economic difficulties.”

PZ Cussons noted the challenges posed by macroeconomic conditions in Nigeria but stressed its commitment to serving Nigerian consumers, despite the economic difficulties and inflation. The company’s UK Personal Care division, however, reported a notable improvement with double-digit revenue growth.

Regarding its Nigerian operations, PZ Cussons recorded a foreign exchange loss of £107.5 million, primarily due to the devaluation of the naira. The company’s Nigerian subsidiary, PZ Cussons Nigeria Plc, posted a significant loss of N94.78 billion in Q3 2023/24, in contrast to a profit of N11.2 billion in the same period in 2022. The subsidiary also remains in a negative net asset position, with liabilities exceeding assets by N46.4 billion.

In a separate development earlier this year, the Securities and Exchange Commission (SEC) rejected PZ Cussons’ bid to acquire minority shares in its Nigerian subsidiary and delist from the Nigerian Exchange. The company had sought to buy out the remaining 26.73% minority stake but was denied approval by the SEC.

PZ Cussons is now moving forward with its closed period, which began on September 1, 2024, and will continue until after the release of its unaudited financial statements for the first quarter ending August 31, 2024.