Economy
Concerns Grow as Nigeria’s Foreign Reserves Decrease to $38.3bn
By Dipo Olowookere
**May Drop to $37bn in Few Days’ Time
**Shed $4.5bn in 2019, $306m So Far in 2020
**Dangote Fears Devaluation Imminent
**No Cause for Alarm—CBN
Though the Central Bank of Nigeria (CBN) has said Nigerians should not panic over the gradual decline in the foreign reserves, observers have cautioned both the fiscal and monetary authorities not sleep with their eyes closed because it might spell doom for the country.
This is because if the depletion of the reserves continues with the steady fall, the nation, which is Africa’s largest economy, may fall into another recession under the administration of President Muhammadu Buhari.
During his first term in office as a civilian leader of the country, just after a year he was sworn into office in 2015, Nigeria went into an economic recession. However, a year later, 2017, Mr Buhari and his team led the nation out of the crisis.
One of the main reasons for sliding into recession was a decline in the price of crude oil at the global market coupled with decline in the volume of the commodity produced.
The period was when restive Niger-Delta youth were attacking oil facilities in the oil-rich region, making it difficult for Nigeria to meet its daily production, resulting into lesser revenue from the sale of crude oil, the country’s main source of foreign earnings.
But when federal government held meetings with stakeholders from that part of the country, the attacks reduced and Nigeria started producing up to 1.7 million barrels per day, resulting into more money.
In 2019, the average price of crude oil at the international market was around $59 per barrel, while the benchmark for the country’s budget was $55 per barrel. This year, the benchmark was put at $60 and the price has remained around $63 to $65.
But despite the excess recorded from the sale of crude oil last year, the external reserves have been reducing, making some observers to raise concerns, urging the central bank to do something fast to prevent a devaluation of the Naira, which the present government does not support.
Business Post reports that the apex bank has been taking from the reserves to support the local currency, making it stable around N360 per Dollar at most of the various segments of the foreign exchange market.
For example, at the beginning of a new week, the CBN regularly releases the sum of $210 million to the forex market, with wholesale sector normally getting $100 million, the Small and Medium Enterprises (SMEs) and the invisible segments receiving $55 million each. At the end of the week, it also injects over $200 million into the Retail Secondary Market Intervention Sales (SMIS).
These interventions have contributed to the decline in the country’s reserves and the central bank has promised not to stop defending the Naira so as to avert currency speculations, which pushed the local currency exchange rate to over N500 to a Dollar over three years ago.
According to data obtained by Business Post from CBN, Nigeria’s external reserves have dropped about $306.1 million since the beginning of this year to $38.3 billion as at Friday, January 10, 2020.
In 2019 alone, the reserves depleted by $4.5 billion, depreciating to $38.6 billion at December 31 from $43.1 billion at January 2, 2019.
In November 2019, Business Post reported that Governor of the CBN, Mr Godwin Emefiele, told some potential investors in London, United Kingdom, that the devaluation of Naira would only be possible if the nation’s external reserves go below $30 billion and the international price of crude oil drops to $45 per barrel.
In 2017, President of Association of Bureau de Change Operators of Nigeria (ABCON), Mr Aminu Gwadabe, said Mr Emefiele assured his members that the bank had no intention to devalue the Naira.
But Africa’s richest man, Mr Aliko Dangote, is already planning ahead of a possible devaluation of the Nigerian Naira by the CBN.
He recently told Mr David Rubenstein of Bloomberg TV that in order not to be caught off guard, he was considering getting an office space in New York, United States of America, to protect the wealth of the family, expressing concerns that a devaluation of the currency may weaken his local investments.
“In Africa, you know we have issues of devaluation, so we want to really preserve some of the family’s wealth,” Mr Dangote, 62, was quoted as saying on the David Rubenstein programme, noting that the office space in New York will help to diversify his business and avoid the risk of currency fluctuations on his home continent.
Economy
BNB Price Reflects Changing Dynamics in the Digital Asset Market
Economy
NASD Unlisted Security Index Crosses 4,000-point Benchmark Again
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange achieved a milestone on Friday, April 24, 2026, after five securities on the platform helped with a 1.85 per cent growth.
Data showed that the NASD Unlisted Security Index (NSI) again crossed the 4,000-point benchmark yesterday.
The index chalked up 73.64 points during the trading day to close at 4,052.59 points compared with the preceding session’s 3,978.95 points, while the market capitalisation added N5.38 billion to finish at N2.424 trillion versus Thursday’s closing value of N2.380 trillion.
The price gainers were led by Okitipupa Plc, which grew by N25.00 to sell at N305.00 per share compared with the previous price of N280.00 per share. Central Securities Clearing System (CSCS) Plc gained N6.92 to close at N76.26 per unit versus N69.34 per unit, Afriland Properties Plc appreciated by N1.00 to N17.00 per share from N18.00 per share, FrieslandCampina Wamco Nigeria Plc improved by 55 Kobo to N99.55 per unit from N99.00 per unit, and Food Concepts Plc increased by 5 Kobo to N2.70 per share from N2.65 per share.
However, there was a price loser, MRS Oil, which dipped by N21.75 to N195.75 per unit from N217.50 per unit.
During the final session of the week, the value of securities jumped 75.2 per cent to N41.3 million from N23.6 million units, and the number of deals expanded by 62.9 per cent to 44 deals from 27 deals, while the volume of securities declined marginally by 0.9 per cent to 447,403 units from 451,522 units.
At the close of trades, Great Nigeria Insurance (GNI) Plc was the most traded stock by volume (year-to-date) with 3.4 billion units worth N8.4 billion, trailed by Resourcery Plc with 1.1 billion units valued at N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units traded for N1.2 billion.
GNI was also the most active stock by value (year-to-date) with 3.4 billion units sold for N8.4 billion, followed by CSCS Plc with 59.6 million units transacted for N4.0 billion, and Okitipupa Plc with 27.8 million units exchanged for N1.9 billion.
Economy
Naira Slips to N1,358/$1 as FX Reserves, Policy Uncertainty Concerns
By Adedapo Adesanya
It was not a good day for the Nigerian Naira in the currency market on Friday, April 24, as its value depreciated against the major foreign currencies at the close of transactions.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX), it lost N4.53 or 0.33 per cent against the United States Dollar yesterday to trade at N1,358.44/$1, in contrast to the N1,353.91/$1 it was exchanged on Thursday.
Equally, the domestic currency slipped against the Pound Sterling in the official market during the session by N8.14 to close at N1,834.02/£1, compared with the previous rate of N1,825.88/£1 and dropped N8.01 against the Euro to sell at N1,590.73/€1 versus N1,582.72/€1.
Also, the Naira depreciated against the US Dollar at the GTBank FX desk on Friday by N4 to quote at N1,370/$1 compared with the previous session’s N1,366/$1, and at the parallel market, it depleted by N5 to settle at N1,380/$1 versus the preceding day’s N1,375/$1.
Data published by the Central Bank of Nigeria (CBN) indicated that NFEM interbank turnover surged to N43.562 million across 68 deals, up from N28.117 million the previous day.
Despite the CBN’s reassurance that the recent drop in external reserves is not worrisome, the market remains unsettled by persistent concerns over liquidity constraints, policy transparency, and weakening confidence in Nigeria’s FX market as gross reserves continue to decline to $48.4 billion.
The outlook for the Dollar appears supported by broader macro risks, including elevated oil prices tied to the tanker traffic disruptions in the Strait of Hormuz and a continued US-Iran standoff over ceasefire negotiations.
A look at the digital currency market showed that investors are sitting on the edge as the US Dollar rebounded amid geopolitical and inflation risks despite continued inflows into US spot bitcoin Exchange Traded Funds (ETFs).
Solana (SOL) rose by 1.2 per cent to sell $86.45, Cardano (ADA) appreciated by 1.1 per cent to $0.2517, Dogecoin (DOGE) grew by 0.9 per cent to $0.0989, Ripple (XRP) improved by 0.3 per cent to $1.43, Ethereum (ETH) soared by 0.2 per cent to $2,316.83, and Binance Coin (BNB) chalked up 0.1 per cent to sell for $637.44.
However, TRON (TRX) depreciated by 1.3 per cent to $0.3235, and Bitcoin (BTC) lost 0.2 per cent to close at $77,562.27, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
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