Nigeria’s Reserves Expand by Nearly $1bn in One Week

By Ashemiriogwa Emmanuel

The external reserves of Nigeria almost increased by $1 billion in one week as it expanded by about $990 million or 2.4 per cent in the last seven days from $40.77 billion on Wednesday, October 20, to $41.8 billion on Tuesday, October 26, 2021.

Analysis of the data sourced by Business Post from the Central Bank Of Nigeria (CBN) showed that the country’s foreign exchange (FX) savings went up by $194.5 million on Wednesday, October 20 from $40.8 billion to $40.95 billion the following day.

The amount then increased by $159.3 million to $41.1 billion on Friday, October 22, and further jumped to $41.6 billion last Monday, before resting at $41.8 billion the next day.

The data on the nation’s FX reserve is constantly kept on close watch given that it connects to the country’s ability to meet up with the demand for forex at the foreign currency market.

Although the milestone boost to the nation’s foreign reserves last week took the buffers beyond the $40 billion thresholds, some experts are concerned about the country’s rising debt profile of which the improvement is partly attributed to as it might pose as a risk.

Regardless, with the current progression, better management of the injection of liquidity by the CBN could further provide stability, particularly for the exchange rate, which will, in turn, strengthen the confidence of foreign investors.

In a related development, the CBN governor, Mr Godwin Emefiele, has said that there are some notable areas of the economy that are still putting a huge strain on Nigeria’s reserves.

Speaking earlier last week at the official launch of Duchess International Hospital in Lagos, the CBN boss, in addition, identified medical tourism as part of these sectors, adding that the apex bank and other banks would support the healthcare sector to reverse the trend just as it prioritized the manufacturing sector in its monetary policies.

Addressing the key drivers to aid full economic recovery, he had said that, “Medical tourism put a huge strain on our foreign reserves, and more importantly, for every $1 billion allocated to medical treatment abroad, there is less than $1 billion that could be available to other critical sectors of our economy.

“As part of this effort, the CBN and select private sector stakeholders supported COVID-19 intervention initiatives through The Coalition Against COVID-19 (CACOVID).”