Nigeria’s External Reserves Shoots Up

By PHC Telegraph

Despite the economic hardship that Nigerians are confronting daily, the country’s external reserves, according to the latest statistics released by the Central Bank of Nigeria, has gradually shot up under the administration of President Bola Tinubu.

It rose from $32.8 billion in December 2023 to $34.11 billion in March this year, a shift representing an increase of about $2.3 billion within the period.

A statement on Wednesday issued by Mrs Hakama Sidi Ali, the Acting Director of Corporate Communications, which disclosed the latest standing of the country’s external reserves confirmed that the banker’s bank under the leadership of Yemi Cardoso has settled all valid FX backlog claims.

President Mohammadu Buhari handed over power as Nigeria’s foreign reserves reached their lowest in 20 months. 

Buhari had inherited approximately the sum of $29 billion as external reserves when he took the oath of office in 2015.

By the time he handed over,  Nigeria’s foreign reserves stood at $35.15 billion as at May 25, 2023 although there is evidence that $1.9 billion was taken from the reserves.

This would mean that during the 8-year tenure of President Buhari, Nigeria’s foreign reserves grew by about 18.79%.

 

Stepping into office, especially against the backdrop of Nigeria’s rising debt profile, the fact that the decline in her foreign reserves could pose a major threat to the stability of the naira was not lost on the incoming Tinubu administration. 

It was also not unknown to the incoming administration that several external factors, including the existence of the fuel subsidy regime and the debt burden were stumbling blocs which have to be addressed.

Data obtained from the Central Bank of Nigeria indicates that Nigeria’s external reserves stood at $32,892,386,111 as at January 2024. 

It is on record that the Central Bank of Nigeria (CBN) under the watch of Yemi Cardoso has succeeded in clearing the $7 billion foreign exchange backlog which it inherited.

Cardoso had pledged on his appointment that he would hit the ground running and the new figure released by the apex bank signifies a significant step towards restoring confidence in the economy.

Ali revealed that the nation’s foreign reserves have witnessed a significant rise, reaching $34.11 billion as at March 7, 2024.

This shift in Nigeria’s foreign earning represents the highest level attained in the last eight months.

President Bola Tinubu while asking for the cooperation and collaboration of the State governors in moving the economy forward had said the dark days which have inhibited Nigeria’s progress would soon be over.

With the naira strengthening against the dollar in the forex market and the nation’s foreign reserves picking up, Nigeria may be on the way to economic recovery.

Our Correspondent reports a stronger foreign reserves base might give the CBN the kind of leverage that it requires in order to articulately influence matters relating to the supply and demand of the naira.

He also reports that foreign reserves help to protect the nation against external shocks and ensure that the country has the ability to meet its international obligations.