The country’s external reserves increased by $ 5.12 billion in 2021, according to data obtained from the Central Bank of Nigeria.
The CBN revealed that reserves, which ended in December 2020 at $ 35.37 billion, stood at $ 40.53 billion as of December 30, 2021.
CBN data showed that external reserves, which fluctuated during the period under review, benefited from the influx of Eurobonds and the Special Drawing Right from the International Monetary Fund.
CBN Governor Godwin Emefiele recently said: “Our external reserves reached over $ 41.5 billion in October 2021, supported by demand management measures, the influx of Eurobonds from $ 4 billion and the IMF’s SDR.
The SDR is an international reserve asset created by the IMF to supplement the official reserves of its member countries.
The CBN also revealed in its August report that “Total foreign currency inflows into the economy rose 48.2 percent to $ 9.85 billion in August, from $ 6.98 billion in August. dollars in July.
“The increase reflects an increase in inflows through the CBN, due to the additional SDR allocation of $ 3.34 billion from the IMF.”
A professor of financial economics, Professor Leo Ukpong, spoke about the impact of fluctuating oil prices on foreign reserves.
Ukpong, who is also the Dean of the School of Business at the American University of Nigeria, Yola, said: “When the price of crude oil goes up, you will see our reserves go up also because the price is in our favor, and when the price of crude oil goes down, you will also see that our reserves will tend to follow.
He said there had been an increase in the price of oil lately.
According to him, the country has been involved in many foreign bonds that the country’s accounting system qualifies as an influx of foreign currency even though they are debts.
This, he added, drastically increased foreign reserves.
A former president of the Association of National Accountants of Nigeria, Dr Sam Nzekwe, noted that some funds entered the country via Diaspora remittances in November and December.
To record significant growth in external reserves, Nzekwe said it was necessary for the government to increase the country’s productivity level.
Nzekwe added, “Again, before you can improve your reserve, there has to be productivity. Without productivity, how can reserves improve? Productivity is at its lowest due to insecurity in the country.
During the Committee of Bankers’ retreat in Lagos recently, Emefiele said the country could deepen its foreign exchange income by aggressively supporting exporters.
He said: “We have also approached the issue of exporting aggressively; we tackled the issues that hamper the ease of exporting to Nigeria. We have listened to some exporters complain about the difficulties they are having in the conduct of their export activities.
“The Committee of Bankers says that one way to increase foreign exchange income in the country is to aggressively encourage and support exporters. It’s not just about providing them with funding that we’ve committed to, but also the fact that we should be doing everything we can and the CBN engaging the various government agencies to see what we can do to enable people to easily conduct their export business.
According to him, Nigeria is endowed with raw materials and resources and must draw on its own resources rather than importing raw materials from outside the world.
“We must create jobs for our people and not export jobs to other countries. We have people, raw materials and other resources. We want to take the opportunity of ‘100 percent’ projects to really grow our economy, grow our manufacturing base for our own local consumption, and after that start thinking about how this African giant can really behave like a giant and make themselves available to support other countries in Africa and the world through export, ”he added.
An economics professor at Olabisi Onabanjo University, Ago-Iwoye, Ogun State, Sheriffdeen Tella, attributed the growth in reserves to the increase in oil exports during the year.
He said, “Reserves increased due to payment for past oil purchases, so the money was coming from oil exports. ”
According to the latest data from the National Bureau of Statistics, crude oil exports contributed 76.3% of total exports in the first nine months of 2021.
“In 2022, the federal government should work on how to diversify the economy and the export base of the country, so that more foreign currency enters the country,” he advised.
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