External reserves in Nigeria up by $271mln in three weeks

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Nigeria's external reserves rose by $271 million in 21 days after rising by $243.83 million in 19 days, according to figures obtained from the Central Bank of Nigeria (CBN).

The CBN revealed in its data on movement in reserves that the value rose from $39.54 billion as of April 1, 2022 to $39.78 billion as of April 19, 2022. It further rose from $39.54 billion to $39.811 million as of April 21, 2022.

The external reserves fell by $313 million in March, after starting the month at $39.86 billion, before falling to $39.55 billion on March 30.

The governor, CBN, Godwin Emefiele, said at the last Monetary Policy Committee meeting, that “The moderate accretion to reserves reflects the duality of Nigeria’s position as an oil exporter and importer of refined petroleum products.”

A member of the Monetary Policy Committee, Prof. Mike Obadan, said for a long time, the oil sector had contributed over 90 per cent of the nation’s foreign exchange earnings and external reserves accretion.

It has also been a significant contributor to the government’s Naira revenue through crude oil and gas export receipts, he said.

Obadan said, “But for some time now, this has not been so due to two factors: a huge volume of crude oil theft which has prevented the country from meeting even the OPEC-approved production quota, and the inability of the NNPC, for many months, to make any remittance from direct oil export sales into the Federation Account and external reserves account.

“These are alarming developments which have adversely impacted government’s finances, external reserves accretion and exchange rate stability.

“The inhibiting factors are what the government can check in the short-term.”

He said it was inconceivable that all the foreign exchange earned from the export of crude oil and gas was used to import refined petroleum products or that ‘under-recovery’/petroleum subsidy was absorbing all the foreign exchange earned from oil sales.

The professor said, “I will therefore strongly appeal to the government to appreciate the grave implications of the oil sector and NNPC’s underperformance and effectively deal with the oil thefts and non-remittance of foreign exchange/Naira revenue.

“If, in the presence of the array of security forces in the oil-producing areas, monumental oil theft is taking place to the detriment of the economy, then drastic measures are called for.

“Government should check the untoward developments, through effective security and monitoring and the positive impact on government finances, external reserves and exchange rate stability will be visible in a short period.”