Nigeria’s foreign reserves grew by $1.6 billion from $34.90 billion recorded on December 22, 2020 to $36.50 billion on January 2021.
Foreign reserves responded positively to the recent surge in crude oil prices following the sworn-in of President Joe Biden.
Brent crude oil, against which Nigerian oil is priced, rose to $57 per barrel two weeks ago before pulling back to $55 on Friday then rebounding to $56.20 on Monday.
The Nigerian government has been using the renewed confidence in the oil outlook to build its fiscal buffer, improve economic productivity and fast track the recovery of the current economic recession.
However, these efforts are yet to crystalise as the unemployment rate remained high with weak foreign exchange rates against global counterparts. Nigeria’s manufacturers are struggling with low dollar liquidity amid wide exchange rates that continue to erode profitability.
Similarly, series of other policies like the new charges on imported goods and the increment in electricity tariffs are some of the burdens hurting productivity in the manufacturing sector.
Also, weak consumer spending, rising inflation rate and the general drop in economic productivity have chased investors from the real sector of the economy, against the Central Bank of Nigeria’s plans of creating jobs.
Local investors continued to dump their funds on equities, driving the bourse to a record high in recent years.
