NIGERIA'S EXTERNAL RESERVES HIT $31.2BILLION

 
The Central Bank of Nigeria (CBN) has put the latest figure of Nigeria’s external reserves as at August 8, at $31.22 billion.

The latest value of the reserves, which is derived mainly from the proceeds of crude oil sales, shows that it has risen to a two-year high.

Nigeria’s increased crude oil production, as well as the newly introduced Investors and Exporters’ (I&E) foreign exchange window, have provided impetus to dollar inflows into the country.

The improved crude earnings reflected in the amount of funds disbursed by the Federal Account Allocation Committee (FAAC) which climbed to a total of N3.010 trillion to the three tiers of government between January and June this year; figures compiled by THISDAY had shown. The amount shared by the three tiers of government was significantly higher, compared with the N2 trillion allocated to them in the first half of 2016.

A breakdown of the disbursement gathered by THISDAY showed that the federal government received a total sum of N1.216 trillion as FAAC in the first half of 2017, higher than the N854 billion it was allocated in the comparable period of 2016. While the states received a total of N798 billion in the first six months of 2017, also higher than the N701 billion in the comparable period of 2016; local government got N599 billion in the first half of 2017 as FAAC, higher than the N429.4 billion they received between January and June this year.

On the other hand, the I & E currency window for investors and exporters has traded around $3.83 billion since it was established with the naira trading more strongly in the market. The window, where buyers and sellers are free to agree to an exchange rate, was introduced in April to try to attract foreign investors into the country and boost the supply of dollars.

“The new Investor and Exporter FX window has provided impetus to portfolio inflows, helped increase reserves above $30 billion, and contributed to reducing the parallel market premium,” the International Monetary Fund (IMF) acknowledged in a report last week.

“The economic backdrop remains challenging, despite some signs of relief in the first half of 2017. Economic activity contracted in the first quarter of the year by 0.6 percent, mainly as maintenance stoppages reduced oil production.

“However, following four quarters of negative growth, the non-oil economy grew by 0.6 percent (year-on-year), on the back of a rebound in manufacturing and continued strong performance in agriculture. Various indicators suggest an uptick in activity in the second quarter of the year. Helped by favourable base effects, headline inflation decreased to 16.1 percent in June 2017, but remains high despite tight liquidity conditions,” the IMF had added.