Nigeria’s current account balance has surged to $1.432 billion in 2024, despite the severe economic downturn affecting the nation, according to the International Monetary Fund’s (IMF) World Economic Outlook.
The IMF data suggests a positive trajectory for Nigeria’s economic growth and stability, indicating an expanding economy with increased investment and savings, even as investor confidence erodes.
For the review period, Nigeria’s trade balance shows a significant rise from the $1.21 billion surplus recorded in 2023.
A country’s current account balance measures its net trade in goods, services, and transfers with the rest of the world, including imports, exports, income from investments abroad, and remittances. A positive balance signifies a surplus, while a negative balance indicates a deficit.
In 2024, Nigeria’s gross national savings increased to 26.32 percent of Gross Domestic Product (GDP), up from 24.61 percent in 2023. Total investment also rose to 25.75 percent of GDP in 2024, compared to 24.28 percent in the previous year.
The boost in Nigeria’s current trade balance is largely attributed to rising national savings and investment, despite the economy struggling with a shortage of dollar liquidity.
This report emerges at a time when multinationals are exiting the country, citing a deteriorating economic environment, further depriving Nigeria of crucial foreign direct investment.
Moreover, Nigeria, formerly Africa’s largest economy, has slipped to fourth place as its GDP declines and investor confidence shifts elsewhere.
Nigeria is also battling an exchange rate crisis, record-high inflation, and declining external reserves, yet it has managed to achieve a surplus in its current account balance.
Many analysts and economists view a growing current account balance as a positive indicator of economic strength. However, they emphasize the need for policymakers to ensure its sustainability to prevent economic imbalances or distortions.
“A growing current account surplus can be a sign of economic strength, indicating that the country’s industries are competitive internationally and that its exports are in demand,” said Ibrahim Bakare, a professor of Economics.
“It may also lead to an appreciation of the country’s currency, as increased demand for its goods and services boosts the value of its currency relative to others,” he added.
