BusinessDay

Foreign reserves now $38.2bn says Emefiele

Nigeria’s external reserves have risen to $38.2 billion as at Tuesday, from its low of $23 billion in October 2016, according to Godwin Emefiele, governor of the Central Bank of Nigeria (CBN). Emefiele, who spoke in Agbara, Ogun State at the official commissioning of 10 million euro factory of Unilever Plc, was delighted that Nigeria has recorded over $10 billion in inflows between April 2017 and now, from foreign direct investment and foreign portfolio investment.

He noted that Nigeria, like other countries which were affected by commodity price slumps, was adversely impacted by a sharp drop in crude oil prices to the extent that “during the third quarter of 2016 Nigeria’s GDP was negative 2.3 per cent, inflation from a modest level of about 9.7 per cent in January 2016 moved up to as high as 18.7 per cent in January 2017.

Employment and underemployment became a problem. During this period, the price of crude has dropped from an average of about over $100 per barrel to as low as $28 per barrel. We suffered a very serious haemorrhage in FX reserves. In January 2014 FX reserves was about $40 billion but by October 2016 it dropped to about $23 billion just because we were not increasing the reserves again and because what we were receiving as revenue had dropped by close to 70 per cent between August 2014 even up to very recently.

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“But I am happy that today, we are beginning to sing a very positive song, the stories are looking good at this time, to the extent that during the third quarter of 2017 gross domestic product reported about 1.4 per cent, inflation has receded from 18.7 per cent to as low as 15.9 per cent and we are very optimistic that it will moderate further.

“We saw reserves rise from the $23 billion in October 2016 and as I speak today reserve is $38.2 billion. CBN has to intervene very aggressively in the FX market. We put in place several FX management policies and this resulted in opening up the I and E window, which has brought transparency in the FX market and confidence has seriously returned into the market at this time”, he said.

Emefiele said so far, “Unilever is doing about 10,000 metric tons per annum and the managing director has promised that he is going to ramp it up to as far as 50,000 metric tons and by doing so, create jobs which is what we are talking about.” Speaking at the event, Yaw Sarkoh, Executive Vice President, Ghana-Nigeria, said the factory consumes less than 50 per cent of energy.

 

Hope Moses Ashike

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