Business Post Contributor
By Ashemiriogwa Emmanuel
The external reserves of Nigeria, the largest economy in Africa, grew by 1.7 per cent in one week to $35.4 billion from $34.8 billion, data obtained by Business Post has revealed.
The Central Bank of Nigeria (CBN), which publishes the amount left in the nation’s account, disclosed that on Thursday, September 9, 2021, the foreign exchange (FX) buffers stood at $34.8 billion but expanded to $35.4 billion on Thursday, September 16.
The week-on-week growth happened few days after the Organization of the Petroleum Exporting Countries (OPEC) release its latest report which showed that the nation’s crude oil production fell to 1.239 million barrels per day in the month of August.
The organization, in its monthly oil market report last Monday, said that the development represented a 6.7 per cent drop from the 1.323 million barrels per day Nigeria recorded in July.
Despite the performance of the Nigerian oil in the international market as its principal source of forex flows, the nation’s external reserves, in recent weeks, have maintained an upward trend which could be attributed to earnings from other sources, including non-oil exports, capital importation, as well as foreign investment flows.
The recent rise in the price of crude oil has been the major reason, covering up in the oil production shortfall. It means if Nigeria produces 1.2 million barrels of crude oil at a global price of $70 per barrel, it earns $84 million but when it produces 1.3 million barrels at $50, it only earns $65 million.
A look at the movement in the country’s reserves showed that on September 9, the total amount in the external savings stood at $34.8 billion but the next day, the buffers increased by $79.9 million to $34.9 billion.
On the first business day of last week, the reserves gained about $250 million to close at $35.1 billion and on Tuesday, September, 14, the forex reserves rose by $82.2 million to $35.3 billion and at the midweek, the amount jumped to $35.4 billion.
Business Post reports that the total amount in the country’s external reserves is projected to hit $40 billion by the end of October 2021 as a result of the proposed $3 billion Eurobond sale slated for the month.
