The nation’s external reserves fell to $25.78bn as of August 16, down by 2.11 per cent from its level a month ago, the Central Bank of Nigeria data showed on Thursday.
This came just as the CBN stepped up dollar sales to boost interbank liquidity and support the local currency.
The central bank has been selling dollars almost daily on the interbank market to prop up the currency. The naira touched an all-time low of 365.25 per dollar on Thursday.
The foreign exchange reserves had fallen marginally to $26.20bn on July 28, down from $26.32 on July 22.
On May 28, the foreign exchange reserves stood at $26.42bn; it was down by 9.2 per cent year-on-year.
During the month of July, the reserves hovered between $26.3 and $26.4bn.
Similarly, the foreign exchange reserves oscillated between $26.3 and $26.4bn in June.
The reserves had stood at the $26.4bn between May 24 and 27, after dropping to $26.5bn from $26.6bn the same month.
Between May 31 and June 7, the external reserves stood at $26.3bn, before rising back to the $26.4bn mark on June 8, a level it maintained up until June 24. On June 27, it fell back to $26.36bn.
The CBN had last month lifted its 16-month-old currency controls and auctioned about $4bn on the spot and futures market to clear a backlog of dollar demand, to help boost interbank market trading.
The reserves had dropped by over 10 per cent from last year when they were at $29.7bn.
The global plunge in oil prices has caused the reserves to be depleting very fast. The development has forced the CBN to introduce foreign exchange controls, which were abandoned last month.
The external reserves have lost over $2bn this year.
The nation recorded a balance of payments deficit of 1.4 per cent in its Gross Domestic Product at the end of 2015, owing largely to its first current account deficit (three per cent of the GDP) in over a decade.
The nation’s external reserves had reduced by $6.7bn within a period of 21 months, the Minister of Budget and National Planning, Sen. Udo Udoma, said on March 23.
IBEDC Disconnects UCH Over N500m Debt, Critical Services Affected
The University College Hospital (UCH) in Ibadan, Oyo State, experienced a disruption in its power supply after the Ibadan Electricity Distribution Company (IBEDC) disconnected the hospital over a debt amounting to N500 million.
Dr. Jesse Otegbayo, the Chief Medical Director of UCH, confirmed the disconnection but refrained from elaborating on the exact cause.
IBEDC’s spokesperson, Busolami Tunwase, acknowledged the outstanding debt owed by UCH but denied that the disconnection was intentional.
Tunwase stated that while UCH owed the substantial amount, the power outage was due to a technical fault in the area, coinciding with the debt situation.
Despite repeated attempts to engage UCH in discussions to settle the debt, IBEDC had resorted to disconnection as a last resort.
The disconnection poses significant challenges to UCH’s critical services, affecting patient care and hospital operations.
While IBEDC emphasized its understanding of the hospital’s importance and commitment to resolving the issue amicably, the situation underscores the financial strains faced by healthcare institutions and the essential need for reliable power supply.
Efforts to negotiate and find a resolution between UCH and IBEDC are ongoing to restore normal operations and ensure uninterrupted healthcare services.
Oil and Gas Dealers Threaten Withdrawal as 70% of Downstream Businesses Collapse
The downstream oil sector in Nigeria faces a looming crisis as oil and gas dealers, represented by the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), issue a stern warning of potential service withdrawal.
In a recent resolution following their executive committee meeting in Abuja, NOGASA expressed grave concerns over the collapse of approximately 70% of businesses in the industry due to the harsh operating environment.
President of NOGASA, Benneth Korie, highlighted the dire situation, emphasizing the challenges faced by oil marketers in funding operations amidst soaring bank interest rates.
Korie underscored the overwhelming burden faced by operators who are compelled to acquire funds at exorbitant interest rates upwards of 30%, exacerbating financial strain and hindering business viability.
The primary demand voiced by NOGASA is the pegging of the foreign exchange rate at N750/$ to facilitate refinery operations and stimulate the production of refined products domestically.
Failure to address these pressing issues, Korie warned, could result in the withdrawal of services by NOGASA’s over 200 members starting from the next month.
The downstream oil crisis coincides with heightened anticipation for the release of refined petroleum products from the Dangote and Port Harcourt refineries, seen as critical for alleviating supply shortages nationwide.
However, amidst forex crises and inflationary pressures, operators in the oil and gas sector confront mounting economic challenges, necessitating urgent government intervention.
As Nigeria navigates through turbulent economic waters, stakeholders eagerly await decisive action from authorities to salvage the downstream oil sector from imminent collapse and avert potential disruptions in fuel supply chains.
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