Nigeria’s current account balance has increased to $1.432 billion in 2024 despite the economic downturn ravaging the country, data from the International Monetary Fund’s World Economic Outlook shows.
The IMF data indicates a positive outlook for Nigeria’s economic growth and stability, showing a growing economy with increasing investment and savings even in the face of erosion of investors confidence.
Nigeria’s trade balance for the period under review shows a significant increase from $1.21 billion surplus seen in 2023.
A country’s current account balance is a measure of its net trade in goods, services, and transfers with the rest of the world.
It includes imports and exports of goods and services, as well as income earned from investments abroad and remittances.
A positive balance indicates a surplus, while a negative balance indicates a deficit.
Nigeria’s gross national savings rose to 26.32 percent of Gross Domestic Product (GDP) in 2024 up from 24.61 percent recorded in 2023.
The country’s total investment also increased to 25.75 percent of the GDP in 2024 relative to 24.28 percent seen in 2023.
The rise in the country’s current trade balance is largely due to its growing national savings and investment even as the economy is starving for dollar liquidity.
This trend is expected to continue, driving economic growth and stability in the region.
This report comes at a time when multinationals are exiting the country, citing a frailing economic atmosphere, further starving the economy with the foreign direct investment it direly needs.
Also, Nigeria, the former largest economy slipped to the fourth as its GDP declines as investors find confidence elsewhere.
Nigeria is also battling with an exchange rate crisis, record high inflation and a declining external reserves yet it recorded a surplus in its current account balance.
Many analysts and economists have said a growing current account balance is a positive indicator of economic strength.
They however noted that policymakers need to ensure that it is sustainable so it doesn’t result in imbalances or distortions in the economy.
“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,” Ibrahim Bakare, a professor of Economics said.
“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.
