Nigeria’s Letter of Credit (LC) payments for imported goods have seen a dramatic decline of 57.04%, plummeting to $391.91 million in the first seven months of 2024, compared to $912.35 million during the same period in 2023.
This data is outlined in the Central Bank of Nigeria’s (CBN) weekly report on international payments, which can be accessed on its website.
A closer examination of the figures indicates that the country’s LC payments fell by approximately $520.44 million during the review period.
The peak LC payments this year occurred in February, amounting to $102.59 million, followed by July at $79.65 million, and January at $58.33 million. In March, LC payments dropped to $43.53 million, a stark decline from $269 million in March 2023. Payments increased to $54.02 million in April 2024, then dipped to $21.48 million in May, before rising again to $32.26 million in June.
This decline has been linked to several factors, including the exit of multinational companies, rising customs duties, and an unstable foreign exchange environment, all of which have negatively impacted Nigeria’s foreign trade during the review period.
Dr. Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, has previously urged the Nigerian government to establish the customs duty exchange rate at N1000 per dollar in response to the ongoing foreign exchange volatility.
