Nigeria’s external reserves have shed $1.14 billion in less than 60 days. The reserves have dropped continuously from April 21, 2021, where the total amount was $35.2 billion to stand at $34 billion by June 10, 2021.
According to information on the Central Bank of Nigeria’s website, the reserves fell by an approximate amount of $200 million every 10 days from April 21 to June 10. On April 30, the reserves dropped by $270 million to $34.9 billion and on May 10, they fell by $276 million to $34.6 billion. On May 20, the reserves sank by $252.7 million to $34.6 billion and on May 31 they fell by $124 million to $34.2 billion. Between May 31 and June 10, the reserves shed $222 million.
Due to the pandemic, earnings from Nigeria’s crude oil sales have narrowed and the government’s keen interest in agriculture for generating foreign revenue has yet to yield tangible results. For the first quarter of 2021, the National Bureau of Statistics reported that Nigeria’s exports decreased by 8.99 per cent. Although crude oil prices keep rising – last Tuesday a barrel of Nigeria’s Bonny Light sold for $80 – the continued payment of fuel subsidies by the government has put a strain on the country’s foremost oil company, Nigerian National Petroleum Corporation (NNPC).
In April, the NNPC disclosed that it would not remit to the Federation Accounts Allocation Committee (FAAC) for May due to the burden of subsidy it was shouldering on underpriced Premium Motor Spirit (PMS) popularly called petrol. Last Friday, the Lagos parallel market exchanged N502 for one dollar while last month the CBN adopted the importers and investors NAFEX exchange rate of N412 per dollar and dumped the N379 per dollar rate in a bid to close the gaps in Nigeria’s over-the-counter rates, a mandate that the International Monetary Funds (IMF) and the World Bank have continued to push for in a long while.