Nigeria has recorded a rise of $1.6 billion in her external reserves in what can be described as a stable and continued growth in the past five weeks. Data on the Central Bank of Nigeria’s (CBN) website show that the reserves grew from $34.89 billion on December 21 to $36.51 billion on January 21.
New National Star tracked the growth and noted that the external reserves increased on December 29 by $364 million and on January 4 by $386 million.
On Jan 11, the reserves further rose by $494 million. Nigeria Bonny Light crude sold for $55.77 on Thursday. Oil prices have steadily increased since November. Experts believe that if this trend of oil price (the current price is higher than the budget benchmark price of $40) continues then Nigeria might soon be out of recession.
But last Friday, Reuters reported that oil prices fell by 69 cents to 86 cents because of the increase in China’s COVID-19 cases which put pressure on the government to call for a lockdown, partial or full. At the height of the lockdowns across the world due to the pandemic last year, oil prices dropped to an all-time low.
The phenomenon made the biggest body of oil-producing countries, the Organisation of the Petroleum Exporting Countries (OPEC), ask its members to reduce oil production per day. Some financial analysts are of the opinion that this trend of growth in the external reserves would not be sustained so long as the country’s economy is largely oil-dependent.