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Nigeria’s FX Reserves Swell By $200 MLN After Court Ruling

Nigeria’s central bank said on Tuesday its foreign reserves have grown by $200 million after a London court ordered the release of a guarantee put in place as security for a failed gas project.

Nigeria’s dollar reserve has lost 15% of its value in the last year and has come under pressure as demand for hard currency soared after the coronavirus pandemic triggered a collapse in the price of oil, the country’s main export.

In November, the Nigerian government deposited a bank guarantee of $200 million with a high court in London to secure a stay on asset seizures of up to $9 billion related to a failed gas project.

Process & Industrial Developments (P& ID), a firm based in the British Virgin Islands set up solely to build a gas processing plant in Nigeria, won a $6.6 billion arbitration award after the 2010 deal collapsed. The award has been accruing interest since 2013.

Nigeria successfully sought the right to appeal a ruling last year that would have converted the arbitration award to a judgment, which would make it easier for P&ID to seize its assets. It has said it would fight making any kind of payment to P&ID.

The central bank said the court awarded a 70,000-pound cost in favour of Nigeria in addition to an earlier award of 1.5 million pounds.

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