Nigeria’s Foreign Reserves Drop by Over $500 Million in Five Weeks

Nigeria’s foreign reserves have decreased by $520.22 million in the last five weeks, according to the latest data from the Central Bank of Nigeria (CBN). The reserves, which stood at $33.396 billion on October 31, 2023, declined to $33.004 billion on December 7, 2023.

This is a continuation of the downward trend that started at the beginning of the year, when the reserves were $37.07 billion on January 3, 2023. By September 29, 2023, they had fallen to $33.237 billion.

The CBN Governor, Olayemi Cardoso, attributed the decline to the low crude oil production and the weak economic diversification in Nigeria. He also cited the high inflation, the naira depreciation, and the foreign exchange exposure of the banks as challenges facing the economy.

However, he expressed optimism that the removal of petrol subsidy and the floating exchange rate, along with other government policies, would have a positive impact on the economy in the medium term.

He said these measures would boost investor confidence, attract capital inflows, stimulate domestic investment, and ultimately increase the level of foreign reserves.

Meanwhile, a former CBN Governor, Lamido Sanusi, blamed the Nigerian National Petroleum Company (NNPC) for the foreign exchange crisis. He said the NNPC’s earnings from crude oil sales were not transparent and accountable.