By Ijezie Victor
Recent data from the Central Bank of Nigeria reveals a notable drop of $520.22 million in Nigeria’s external reserves over the past five weeks. As of December 7, 2023, the reserves, which stood at $33.396 billion on October 31, 2023, have fallen to $33.004 billion.
Earlier reports from the CBN indicated that the reserves, starting at $37.07 billion on January 3, 2023, had decreased to $33.237 billion by September 29, 2023. Governor Olayemi Cardoso highlighted the challenges faced by Nigeria’s economy, emphasizing the impact of declining crude oil production and the consequent strain on economic diversification. Cardoso also mentioned the adverse effects of high inflation on asset quality and solvency ratios in the banking sector.
Despite these challenges, Cardoso expressed optimism about the government’s policies, such as the removal of the petrol subsidy and the adoption of a floating exchange rate. He anticipates positive effects in the medium term, including enhanced investor confidence, increased capital inflows, stimulated domestic investment, and an improvement in external reserves.
It is worth noting that Lamido Sanusi, a former CBN governor, has attributed the ongoing foreign exchange crisis to the lack of transparency in the earnings from crude oil sales by the Nigerian National Petroleum Company.
