Nigeria Loses Over $2.3b Forex Inflows Monthly

Forex Sale

**As Allocation To States Drops By N864b

By Modupe Gbadeyanka

Governor of Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has disclosed that the Federation Account allocations to the 36 states in the country have fallen by an average of N2 billion per state every month.

He explained that this was due to the crash in global oil prices and the consequent economic challenges.

According to him, this has made the 36 states to record N864 billion shortage in federal allocations in the last one year.

Mr Emefiele said Nigeria was facing “a classical case of economic stagflation” occasioned by external shocks.

The CBN boss, who was giving his keynote address at the 2016 Annual Bankers Night organised by the Chartered Institute of Bankers of Nigeria in Lagos on Friday, further said the global crash in oil prices had also made foreign exchange inflows into the CBN to drop by an average of $2.3 billion monthly in the past 26 months.

In his speech titled ‘Policy options for reversing Nigeria’s economic downturn’, Mr Emefiele said, “In reality, Nigeria’s economy is currently facing a classical case of ‘stagflation’. This situation largely occurs when a country’s Gross Domestic Product is falling or stagnant, while unemployment and inflation are rising, all simultaneously.”

He said further that, “Given the sharp drop in oil prices, Federation Account allocations to states have dropped by an average of about N2 billion monthly per state, which partly explains their inability to meet some basic recurrent expenditures, including payment of workers’ salaries.

“Similarly, average inflows of foreign exchange into the CBN have fallen by over $2.3 billion every month over the last 26 months.”

According to Mr Emefiele, Nigeria could have been better prepared for the challenges, but for the lack of right policies and proper capital controls.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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