'Clearing backlogs' - $2.2bn Afreximbank loan lifts Nigeria’s external reserve, reverses naira's loss

Foreign exchange reserves increased to $33.042 billion as of January 3, 2024, according to data from the Central Bank of Nigeria (CBN).

This is up from $32.912 billion on Friday, the final trading day of 2023. CBN data shows that foreign exchange reserves increased to $33.042 billion as of January 3, 2024.

According to a BusinessDay report, this coincides with the reception of the African Import-Export Bank (Afreximbank) loan announcement, which has helped boost reserves.

Recall Punch reported that the federal government received a $2.25 billion foreign exchange support facility from the Afreximbank.

According to the minister of finance, Wale Edun, in an Arise TV interview, the amount represents the bank's first tranche of the $3.3bn facility to resolve the acute FX shortage that has hampered the economy.

Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said: “This Afreximbank fund is going to help to stabilise the market further. Once the CBN can clear the backlog substantially, subsequent inflows will now be used to intervene directly in the market after the backlog has been cleared."

Naira records first gain

The naira recorded its first gain against the US dollar since 2024 on Thursday, January 4. The naira was quoted at N895.23 to a dollar, higher than the N1,035.12 posted Wednesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

This resulted in a 15.62% increase in the value of the naira by the close of trade. FMDQ Data shows that the naira gained against the dollar on Friday, December 5, 2024, at the official market, marking the second gain in the New Year. 

The domestic currency appreciated 3% to close at N869.13 to a dollar at the close of business, representing a N26.1 gain or a 3% increase in the local currency compared to the N895.23 closed the previous day.