Nigeria’s forex reserves reach $36bn – CBN
Central bank of Nigeria, CBN, yesterday said Nigeria’s foreign exchange reserves have increased by 3.63 percent to $36.05 billion on April 12 from $34.74 billion a month earlier.
With this, the nation’s forex reserves have reached its highest in more than one year, from $34.47 billion it stood a year ago.
Though the reserves have seen declining in the past three years despite rising oil prices, gradual reduction in demand for dollars at the bi-weekly forex auction this year has meant the central bank spends less of its reserves to support the naira.
Nigeria relies on crude exports for more than 95 percent of its foreign exchange earnings and investors watch reserve data closely to gauge the defences Africa’s second largest economy has against a potential dip in oil prices.
Nigeria’s foreign-exchange reserves has risen 9.5 percent this year to $36.5 billion as of April 12, according to data compiled by the central bank
This is coming on the heels of a warning by the Coordinating Minister for the economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, that the depletion in the sovereign wealth fund and without the diversification of Nigeria’s revenue from oil, the economy will soon collapse.
For instance, she noted that the crisis in Europe and the United States where about 60 per cent of the country’s crude oil was sold had made it difficult for government to depend solely on oil revenue.
“Sixty per cent of our oil is sold to US and Europe and these countries are facing big economic problems. For instance, the US has an unemployment rate of eight per cent; Spain 24 per cent; and India, 9.9 per cent.
“So, if 60 per cent of our oil is sold to them, then, we have a problem and any country that has great volatility such as ours will always have problem and this will lead to crisis in the economy.”
She also said, “The ECA account and its successor, the sovereign wealth fund, are very important but we have the state governors saying no we will only allow $1bn. In fact, we manage to get that and now they said its illegal and so the country is not able to save in the ECA and we have left today in that account only about $3.6bn.
“What that means is that should the oil price drop today, we have no cushion because $3.6bn for this economy is not enough to take us to any length of time and that was what I told them at the Governors’ Forum during the National Economic Council meeting the last time,” she stressed.