Economic crisis worsens as forex inflows fall by $9.58bn

Foreign exchange inflows into the economy declined in the fourth quarter of 2021, owing to lower receipts from the Central Bank of Nigeria and autonomous sources.

This is an indication of a worsening crisis for a forex-strapped economy.

The latest figures from the Central Bank of Nigeria’s quarterly report on “Foreign Exchange Flows through the Economy” said the FX inflows fell by 31.7 per cent.

It stated “Foreign exchange inflow into the economy fell by 31.7 per cent to $20.62bn, from $30.2bn in the preceding period. The development was driven by the 45.5 per cent and 14.4 per cent lower inflow through the CBN and the autonomous sources, respectively.

“Foreign exchange inflow through the Bank at $9.18bn fell below the $16.83bn in the preceding quarter as both oil and non-oil receipts declined, as a result of lower receipts from interest on reserves and interbank swaps.”

A disaggregation showed that proceeds from oil-related sources declined by 12.2 per cent to $1.63bn, relative to the preceding period.

Similarly, receipts from non-oil sources fell to $7.54bn, compared with $14.97bn in the preceding quarter.

Foreign exchange inflow through autonomous sources declined to $11.44bn, relative to $13.37bn in the preceding period, driven mainly by a reduction in over-the-counter purchases and non-oil export receipts.

Foreign exchange outflow through the economy rose by 19.4 per cent to $12.21bn, relative to the level in the preceding quarter, majorly on account of increased foreign exchange intervention and utilisation for visible imports.

Outflow through the CBN stood at $10.58bn, indicating a 32.5 per cent increase, relative to $7.98bn in the preceding quarter. This is attributable to increased sales to the I&E window, third-party MDA transfers, public sector direct payments, and Joint Venture cash call payments.

However, autonomous outflow decreased by 27.2 per cent to $1.63bn, due to lower utilisation of foreign exchange for invisible imports.

Consequently, the economy recorded a lower net inflow of $8.41bn in the fourth quarter, compared with $19.98bn in the preceding quarter, reflecting the lower net inflow of $9.81bn recorded through autonomous sources.

In contrast, a net outflow of $1.4bn was recorded through the CBN, compared with a net inflow of $8.85bn in the preceding quarter.