CBN drives FX inflows through non-oil export strategy
…as crude oil price dips
The Central Bank of Nigeria, CBN, has ramped up Measures to attract more foreign exchange, FX, amidst threats to oil revenue arising from the recent decline in crude oil price in the international market.
The apex bank’s Governor, Yemi Cardoso, is currently placing huge support to non-oil exports to earn more FX revenue by championing backward integration strategy and simplifying dollar remittances for Nigerians in diaspora.
These measures have continued to act as buffers for Nigeria’s FX position, support naira rally and keep inflation under check.
Global oil prices fell sharply, currently trading slightly above $60 per barrel. For an oil dependent economy like Nigeria, the ongoing decline in crude oil prices is never a cheering news.
With the pessimistic projection of The Wall Street Journal that Brent could end 2025 below $50 per barrel, Nigerian policymakers have their work cut out for them.
At $50 per barrel and a production level of 1.5 million barrel per day (mbpd), Nigeria’s oil revenue will be 10per cent below its fiscal breakeven point. The fiscal deficit could rise to six to seven per cent of Gross Domestic Product, with a knock-on effect on inflation.
But the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso has through foresight, activated countermeasures that will ensure that the impact of the oil-crisis does not hurt the domestic economy.
The apex bank is taking measures to improve Nigeria’s export potential, promoting backward integration principles to reduce import of items that can be produced locally and simplifying dollar remittances to domestic economy for Nigerians in diaspora.
