Nigeria’s external reserves rose by $83.3 million in seven days, according to the latest report from the Central Bank of Nigeria.
The reserves which stood at $33.088 billion on July 12, 2021 gained $83.3 million to $33.171 billion on July 19, 2021. Still below the $33.279 billion reached on July 1, 2021.
Experts have blamed the inability of President Muhammadu Buhari-led administration to effectively diversify the economy after 6 years in power for the dwindling foreign reserves. Nigeria imports over 90 percent of her consumption, a situation that has dragged on the external reserves and the value of the Nigerian Naira.
Naira plunged to N504 against the United States Dollar on Monday morning at the black market, the only section of forex that is accessible to most businesses and individuals looking to import raw materials or make oversea’s payments.
At the bureau de change section, the exchange rates are not any better as the Naira hovers at record lows against its global counterparts. Naira exchanged at N500, N705 and N595 to the United States, the British Pound and the Euro, respectively.
Nigeria, a mono-product economy, relied on crude oil sales to service its over 200 million population economy and support its central bank pegged currency, Naira. However, OPEC’s production cuts agreement and years of dilapidated oil production facilities have crippled the nation’s ability at upping its crude oil production enough to increase foreign revenue generation, effectively service the economy and support the local currency.
Inflation rate rose to almost 19 percent before moderating to 17.75 percent in the month of June, this was largely due to the chronic forex scarcity experienced across the nation as businesses and individuals in need of forex had to access the black market, the only section it is readily available for those that are willing to pay the exorbitant rates hoarders and speculators charged at that section of forex.
The Central Bank of Nigeria-led monetary policy committee had maintained a 11.5 percent interest rate to stimulate growth and damned the rising inflation number, saying strategies put in place by the apex bank would eventually rein in inflation rate.
However, in reality, inflation continues to rise in Africa’s largest economy but reducing in the monthly data released by the National Bureau of Statistics (NBS). Forcing economic watchers and other experts to question the disparity in the numbers and economic reality of the nation.
