According to the Central Bank of Nigeria (CBN), the Naira appreciated by 7.62 percent from ₦1661.12 to a US Dollar on 2nd December 2024 to ₦1534.56 to a US Dollar on 3rd January 2025. Since the unification of exchange rates in June 2023, the Naira has been fluctuating. In 2024, the local currency lost about 41 percent of its value against the dollar in the official market, despite a rise in external reserves in the same period. The recent appreciation of the Naira comes a month after the implementation of the Electronic Foreign Exchange Matching System (EFEMS), which was officially launched on 2nd December 2024 to reduce speculation and enhance transparency in Nigeria’s foreign exchange market. With a strengthened domestic currency, it is expected that prices would fall in the short term, especially given that Nigeria is a highly import-dependent country. If the appreciation is sustained over time, it enables the country to concurrently service foreign currency-denominated debts and supply demanded liquidity in the foreign exchange market. To ensure a stable and strong Naira, there is a need to maintain sustainable debt levels, reduce reliance on imports, and boost foreign reserves by increasing exports. Also, there is a need to create a business-friendly climate for foreign investors to attract foreign exchange inflow.
The National Bureau of Statistics' report showed that in the third quarter of 2024, Gross Domestic Product (GDP) grew by 3.46%, representing a 0.92 percentage point rise from the 2.54% recorded in Q3 2023. The non-oil sector, the largest contributor to GDP, grew by 3.37% in Q3 2024. Growth in the non-oil sector was driven by financial institutions, information and communication technology, agriculture, and trade, among other sectors.
The National Bureau of Statistics' Liquefied Petroleum Gas (LPG)/Cooking Gas Price Watch for October 2024 showed a 3.2% month-on-month increase in the average cost of refilling a 5 kg cylinder, from N6,699 in September to N6,915 in October. Similarly, the average retail price of refilling a 12.5 kg LPG cylinder rose by 2.58%, from N16,313 in September 2024 to N16,743.55 in October 2024. According to state-level analysis, Borno state recorded the highest petrol prices at N7,939, followed by Yobe state at N7,580, and Benue state at N7,578, while Katsina state had the lowest prices at N6,270, followed by Zamfara state at N6,410, and Delta state at N6,427. The month-on-month increase in petrol prices can be ascribed to global market fluctuations and supply chain interruptions, which have increased the cost of importing LPG. This increase in cooking gas costs has a detrimental impact on household welfare nationwide, particularly for low- and middle-income families that spend a significant portion of their income on cooking fuel.
According to the National Bureau of Statistics (NBS) Premium Motor Spirit (Petrol) Price Watch report, the average price of Premium Motor Spirit (petrol) rose by 14.98% in October to N1,184.83, from N1,030.46 in September, this reflects an 87.88% increase from N630.63 in October 2023. Across the six zones, the South-East recorded the highest average retail price at N1,256.76, while the North Central zone had the lowest price at N1,132.94. Among states, Ebonyi had the highest retail price at N1,292.86, followed by Jigawa at N1,288.18 and Borno at N1,283.79. In contrast, Delta had the lowest petrol prices at N1,050.00, followed by Nasarawa at N1,063.68, and Lagos at N1,080.95. The government's policy to establish market-based pricing and the withdrawal of subsidies in May 2023 has contributed to the ongoing rise in fuel costs. The high cost of petrol has contributed to the high cost of living by increasing transportation costs, and operational expenses for businesses. This has disproportionately affected small and medium-sized enterprises (SMEs) which lack the resources to absorb these costs, resulting in lower profitability and layoffs. Given the consequences of rising PMS prices, the government needs to provide targeted support for low-income households, encourage private sector investment in refineries, rehabilitate existing refineries to meet domestic gasoline demand, and possibly cut costs.
According to the Central Bank of Nigeria's (CBN) international payment data, remittances in the first nine months of 2024, amounted to $1.54 billion, a 16.7% decline from $1.85 billion recorded in the same period in 2023. Remittances refert to amounts sent by individuals working abroad to support their families and loved ones in their home country. The decline in remittances may be attributed to several factors, including a weak global economy, and a weak domestic currency. Over the last decade, remittance inflows played an important role in the Nigerian economy. Remittances help households with members in a foreign country to meet basic expenses such as education and healthcare. It is also an important source of foreign currencies and contributes to the country’s foreign exchange reserves. Beyond substistence purposes, remittances are also channels into productive investments, in turn, bolstering economic growth. While the government might have limited influence on the global economy, government policies aimed at improving the domestic business environments could help reverse the declining trend of remittances.