DATA from the Central Bank of Nigeria (CBN’s) latest Quarterly Statistical Bulletin (QSB) has shown that the total value of foreign exchange (FX) utilised within the Nigerian economy declined markedly by -46 percent quarter-on-quarter (q/q) to $3.4 billion in third quarter (Q3) 2023.
On a year-on-year (y/y) basis, the value of FX utilised by the various sectors more than halved from around $7.3 billion in Q3 2022.
According to the CBN, the broad trend of FX utilisation has been downward since Q4 2022, primarily reflecting the scarcity of FX supply.
Merchandise imports dominated FX utilisation during the quarter, comprising 72 percent of total FX utilisation at approximately $2.4 billion. This reflects declines of -45 percent and -48 percent y/y, respectively.
Within merchandise imports, the industrial goods sector led FX utilisation, totalling around $1.4 billion or 58 percent of the total. Despite this, the sector experienced a q/q decline of -40 percent in total FX utilisation.
FX usage for minerals and manufactured products amounted to $280 million and $275 million, respectively. While there was a notable 79 percent q/q increase in FX usage for minerals, the expenditure for manufactured products saw a 61 percent q/q decline.
Also, the data showed that FX usage for food products dropped sharply by 60 percent q/q to $273 million.
The invisibles segment, the second broad classification of FX utilisation, accounted for 28 percent of FX usage, totalling $949 million.
FX usage by the financial services sector accounted for $743 million, representing 78 percent of the total FX usage within the invisible segment. The sector’s FX usage fell by -43 percent y/y.
According to the apex bank’s records, FX utilisation for business services, transport, communication and educational services amounted to $71 million, $50 million, $39 million and $31 million, respectively. Excluding communication services, which declined by -17 percent q/q, while the others saw notable declines of between 41 percent and 69 percent q/q.
Cumulatively, FBNQuest analysis confirmed that the total utilisation of FX by various sectors of the economy decreased to $17.1 billion in nine-month 2023 from $22.4 billion over the corresponding period of 2022.
By split, FX usage for merchandise imports amounted to $11.7 billion compared with $13.5 billion in nine-month 2023, while invisibles plummeted to $5.4 billion from $8.9 billion in nine-month 2023.
