The country’s external reserves fell by $317m in February, according to figures obtained from the Central Bank of Nigeria.
The CBN’s data on the movement of foreign reserves showed that the figure which stood at $36.99bn as of January 31, 2023, fell to $36.67bn as of February 27, 2023.
In January, the reserves fell by $63.62m from $37.08bn at the end of December 30, 2022
Nigeria’s external reserves fell by $3.43bn in 2022 after dropping from $40.52bn as of the end of December 31, 2021.
At the last Monetary Policy Committee meeting in January, the Governor, CBN, Godwin Emefiele, said the committee noted the marginal decline in the external reserves in December.
He said, “This reflects the exchange rate pressure accentuated by a combination of heightened demand and slow accretion to reserves.”
A member of the MPC, Mike Obadan, in his report to explain the external sector developments, said, “These relate mainly to high exchange rates, foreign exchange market pressures and dwindling external reserves. These appeared to have worsened in 2022 because of both external and domestic shocks.
“Although the gross external reserves position as of December 2022 could cover 6.21 months of imports of goods and services or 8.79 months of imports of goods, suggesting that the external reserves position may not be precarious, it is of concern as it is inadequate to maintain exchange rate stability.”
A member of the MPC, kingsley obiora, in his report at the last meeting said, “Domestically, although oil production has improved, it is still below the OPEC allocation quota of about 1.8 mbpd due to high production costs, oil theft and pipeline vandalism.
“Low oil production in the face of high oil prices continues to reduce fiscal space, with consequences for external debt and foreign reserves accretion.”
According to an MPC member, Folashodun Shonubi, in 2022, dwindling foreign inflow, amid rising demand and marginal accretion to reserves exerted persistent exchange rate pressure in the external sector.
He said, “Trade and current account balances continued to be pressured by high import, even as the authority do all it can to promote export.
“The fiscal space was constantly under pressure in 2022, as the authority contended with the challenges of low revenue and resources to fund huge expenditure requirement for promoting expansion of economic activities, resulting in increased debt burden.”
