Oil revenue, inflation will decline in 2024, says Cardoso

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says inflation and oil revenue will decline in 2024.

Nigeria’s inflation rose to 27.33 percent in October 2023 — up from 26.72 percent in the previous month, the National Bureau of Statistics (NBS) said in a report released in November.

The governor said there will also be less revenue from oil in the coming year owing to the production limit of 1.78 million barrels per day.

Cardoso spoke on Thursday when he appeared before the joint national assembly committee on banking, insurance, and financial institutions.

He said his assumptions are based on the outlook for the country’s economy in 2024 which “is very positive”, adding that inflation and the foreign exchange market will stabilise.

“Inflation pressures may persist in the short-term but are expected to decline in 2024,” Cardoso said.

“Exchange rate pressures are also expected to reduce significantly with the smooth functioning of foreign exchange market.

“We expect less revenue from oil exports due to the production limit of 1.78 mbpd in 2024. OPEC-approved quota for Nigeria is 1.8 mbpd, which is higher than the 2024 budget assumption.

“The country’s production has been below these thresholds. The budget benchmark for 2023 was 1.69 mbpd, but the highest level of production during the year was about 1.35 mbpd in Q3 of 2023.”

Cardoso said the country has not been able to meet its target in oil production because of crude oil theft, pipe vandalisation, and divestments by major oil companies among other reasons.

The governor said Nigeria has seen a positive balance of trade in the third quarter of 2023.

“Total trade in the third quarter of 2023, stood at N18.804.68 billion. Exports were valued at N10.346.60 billion while total imports stood at N8.457.68 billion,” he said.

“This represents a positive trade balance which would lead to an increase of the external reserves.”