Along with predicting lower oil export revenue for the fiscal year, Apex Bank also estimated that overall trade on the Nigerian Foreign Exchange Market (NFEM) was N18.804 billion in Q3 of 2023.
In his presentation to the National Assembly Joint Committee on Banking, Insurance, and Other Financial Institutions, Olayemi Cardoso, the governor of the Apex Bank, stated.
He informed the members of the joint committee from both houses of the National Assembly that there is a very good chance for Nigeria's domestic economy in 2024 because both the exchange rate and inflation would stabilize despite external pressures that come and go.
"The domestic economy is predicted to continue on its current positive track through 2024 with an optimistic outlook.
"Inflation pressures are predicted to decrease in 2024, but they may continue in the near term. Exchange rate pressures should also considerably lessen as long as the foreign exchange market runs smoothly.
He informed the committee members that a new strategy for managing the exchange rate has been created with the goal of minimizing arbitrage, rent-seeking activity, and market speculation. This strategy will be implemented in June 2023 with the unification of the exchange rate windows.
The goal of the policy is to establish a market in which supply and demand for foreign currency decide the exchange rate.
The premium has already shrunk, and by stepping up the supply of autonomous foreign exchange, we want to further reduce the premium and increase stability.
In the third quarter of 2023, total trade was N18.804.68 billion. The entire value of imports was N8.457.68b, while the value of exports was N10.346.60b. Positive trade balances like this one would result in higher foreign reserves.
However, he said that in 2024, there would be fewer earnings from oil exports because of domestically occurring circumstances.
"We expect less revenue from oil exports due to the 1.78 million barrels per day production limit in 2024," he stated. Nigeria's OPEC-approved quota of 1.8 million barrels per day exceeds the budget estimate for 2024.
But the nation's output has fallen short of these benchmarks. The budget goal for 2023 was 1.69 million barrels per day; however, in Q3 of that year, production reached its peak at roughly 1.35 million barrels per day.
"Crude oil theft and pipeline vandalism, production shut-ins, and divestitures by major oil companies are the reasons for the underperformance of the oil production target."
Prior to this, Senator Tokunbo Abiru (APC Lagos East), the Chairman of the Joint Committee, stated that the interactive session was planned for a statutory briefing by CBN in compliance with current legislation.
In his remarks, the committee's co-chair, Bahir Bello El-Rufai, praised the CBN governor and the management team for the steps being taken to stabilize the economy as a whole.