Nigeria’s Foreign Reserves Dip by $179 Million in Five Days

Nigeria’s foreign reserves declined by $179.364 million in the first five days of July 2021, according to the Central Bank of Nigeria’s latest report.

The reserves stood at US$33.324 billion on June 30, 2021 but dipped to US$33.144 billion on July 5, 2021, the report stated. This represents a decline of US$179.364 million or 0.54 percent.

Rising population and huge capital expenditure amid weak foreign revenue generation continue to drag on Nigeria’s foreign reserves and ability to service its growing young population.

Despite efforts to ease dollar liquidity and prop up the Naira value, weak foreign reserves has made it impossible for the Central Bank of Nigeria to effectively implement its intervention strategy and bolster Naira’s value against its global counterparts.

Naira plunged to N503 against the United States Dollar on Wednesday morning at the black market while the British pound was exchanged at N710 and the Euro goes for N595.

At the Bureau De Change section of foreign exchange, the Naira traded at N500 to a United States Dollar but gained N4 against the British Pound from N714 on Monday to N710 on Tuesday, the amount it opened on Wednesday morning.

Economic activities in Africa’s largest economy remained low as wide foreign exchange rates has impeded consumption and new job creation across key sectors given that Nigeria depends on imports for over 90 percent of her consumption.

President Muhammadu Buhari had pushed for domestic consumption and going as far as shutting down neighbouring borders to enforce local patronage and grow the domestic market. However, the poorly structured Nigerian markets that depend on imports for key raw materials have rendered a strategic move useless and compounded Nigerians plights.

Unemployment has since escalated to 33.33 percent while inflation hovering around 17 to 18 percent despite Brent crude oil, the Nigerian type of oil, trading at around $75 a barrel.