 |
| President Muhammadu Buhari. |
The nation’s external reserves fell to $28.1bn on January 28, 2016 the lowest level since 2005, data from the Central Bank of Nigeria showed on Friday.
The foreign exchange reserves had stood:
December 30, 2015: $29.13bn
December 31, 2015, $29.070bn, reflecting a decline of 15.79 per cent year-on-year from $34.52bn in December 2014..
January 7, 2016: $28.931bn
January 8, 2016: $28.895bn
January 11, 2016: stood at $28.782bn despite the stoppage of foreign exchange sale to Bureau De Change operators !!!!
Reasons for the drops in Nigerian External reserves?
1. The major mean though which Nigeria earns FOREX into the External reserves has been through Crude Oil Export sales. Over the past 3 months, tumbling crude oil had trades below $30 a barrel for first time in 12 years!!!
2. Even with 1 above going on, Nigeria continue to use the FOREX in the External reserves to import foreign made commodities and products to meet the consumption of its over 180million population. Nigeria spends billions of $$$ yearly on imported petroleum products, imported steel, imported rice, imported petrochemical products, imported tomato paste, imported bituminous asphalts, imported wheat, imported flour etc rather than LOCAL PRODUCTION. These are KILLERS TO THE EXTERNAL RESERVE.
What MUST be done for Nigerian External reserves to rise again??
1. When global crude oil price improves again.....
2. When Nigeria is able to be self sustaining via local production of petrol, kerosene, diesel, fertilizer, petrochemicals, steel, rice, tomato paste, bituminous asphalts, wheat, flour etc
A nation’s foreign reserves are usually an indication of the health of its international trade, with import-dependent countries often disadvantaged in their current account balance as a result of forex expenditure outstripping income.
www.rempoonline.com.ng
No comments:
Post a Comment