The Central Bank of Nigeria has said that Nigeria’s foreign reserves will surpass the $42 billion thresholds by the middle of next year.
Speaking at the France-Nigeria Security and Economic Summit, in Paris, France, on Wednesday, Governor of the CBN, Mr Godwin Emefiele said this is due to the sustained increase in crude oil price, the impact of Eurobond Issuance, and the stable exchange rate condition.
According to him, the reserves which stood at $34.80 billion in the first quarter of 2021, declined to $33.3 billion in the second quarter, before rising to $36.7 billion in the third quarter. It is estimated to hit about $41.82 at the end of this quarter.
“Nigeria’s FX reserves has increased to over US$40billion from about US$33.4billion in March 2020 due to inflows from the IMF, Eurobond proceeds, and complemented by CBN’s astute management of the foreign exchange market,” the governor said.
The CBN boss said that the average daily turnover had fallen to as low as $44.1 million at the peak of the COVID-19 pandemic in the second quarter of 2020.
On the exchange rate, Mr. Emefiele, said, “ The exchange rate continued to experience significant pressure in the various windows. Accordingly, the CBN adjusted the official exchange rate from N306/US$ to N405/US$. Today, the exchange rate at the I&E is hovering around N412/US$1″
The governor revealed that CBN Centre for Economics & Finance was an intervention to develop the human capital needed to build capacity in the financial sector.
“Through this program, the CBN will produce a critical mass of well-educated postgraduate degree holders in the fields of Accounting, Banking and Finance, Business Administration and Economics for the financial services industry, and the Nigerian economy as a whole,” he said.
According to Mr. Emefiele, The impact of the apex bank’s policy measures helped to prevent larger GDP contractions in 2020, as projected by analysts.
Unfolding developments, he added, continued to indicate that the Nigerian economy would achieve strong growth while inflation trends remained on track towards their desired levels.
He said GDP rebounds with strong positive growth of 5.1 per cent percent in the 2nd quarter of 2021 from negative growth of -6.1 per cent in the 2nd quarter of 2020.
“The recovery path has continued to strengthen in 2021 as a result of the stimulus support provided by our various policies and interventions. Headline inflation rate decreased to 17.01 percent in August 2021 from 18.17 percent in March 2021, and we are increasing our efforts to control inflation towards the CBN’s single-digit tolerance range.”
The governor ascribed the positive outlook for the nation’s economy to “high oil price which exceeds the $70 pb mark, the implementation of the Economic Sustainability Plan, and a rebound in manufacturing activities.”
He added that the launch of the eNaira would improve the conduct of monetary policy in Nigeria, reduce transaction costs and increase financial inclusion in the medium to long term.
The governor urged international investors to take advantage of the friendly business climate in Nigeria to invest in the country.
