Nigeria’s foreign reserves will surpass the $42 billion threshold by the middle of next year, the Central Bank of Nigeria (CBN) Governor, Mr. Godwing Emefiele, has assured.
He spoke at the France-Nigeria Security and Economic Summit, in Paris, France, on Wednesday.
According to him, “Nigeria’s external reserves are expected to surpass US$42 billion by mid-2022. This is due to the sustained increase in crude oil price, the impact of Eurobond Issuance, and the stable exchange rate condition.”
The reserves which stood at $34.80 billion in the first quarter of 2021, declined to $33.3 billion in the second quarter, before rising to $36.7 billion in the third quarter. It is estimated to hit about $41.82 at the end of this quarter.
“Nigeria’s FX reserves has increased to over US$40bn from about US$33.4bn in March 2020 due to inflows from the IMF, Eurobond proceeds, and complemented by CBN’s astute management of the foreign exchange market,” the governor said.
FX daily turnover at the Investors and Exporters Window, he said, averaged $157. 4 million in the third quarter and is projected to hit $209.3 million at the close of the year.
The CBN boss said that the average daily turnover had fallen to as low as $44.1 million at the peak of the COVID-19 pandemic in the second quarter of 2020.
On the exchange rate, Mr. Emefiele, said, “ The exchange rate continued to experience significant pressure in the various windows. Accordingly, the CBN adjusted the official exchange rate from N306/US$ to N405/US$. Today, the exchange rate at the I&E is hovering around N412/US$1.”
The governor revealed that CBN Centre for Economics & Finance was an intervention to develop the human capital needed to build capacity in the financial sector.
“Through this program, the CBN will produce a critical mass of well-educated postgraduate degree holders in the fields of Accounting, Banking and Finance, Business Administration and Economics for the financial services industry, and the Nigerian economy as a whole,” he said.
According to Mr. Emefiele, The impact of the apex bank’s policy measures helped to prevent larger GDP contractions in 2020, as projected by analysts.
Unfolding developments, he added, continued to indicate that the Nigerian economy would achieve strong growth while inflation trends remained on track towards their desired levels.
He said, “GDP: GDP rebounded with a strong positive growth of 5.1% percent in the 2nd quarter of 2021 from negative growth of -6.1% in the 2nd quarter of 2020. The recovery path has continued to strengthen in 2021 as a result of the stimulus support provided by our various policies and interventions.
“Headline inflation rate decreased to 17.01 percent in August 2021 from 18.17 percent in March 2021, and we are increasing our efforts to control inflation towards the CBN’s single-digit tolerance range.”
The governor ascribed the positive outlook for the nation’s economy to “high oil price which exceeds the $70 pb mark, the implementation of the Economic Sustainability Plan, and a rebound in manufacturing activities.”
He added that the launch of the eNaira would improve the conduct of monetary policy in Nigeria, reduce transaction costs and increase financial inclusion in the medium to long term.
The governor urged international investors to take advantage of the friendly business climate in Nigeria to invest in the country.
His words, “Let me say that Nigeria, as a leader in Africa, is ready for business. So we invite you, our foreign brethren in the investor community to come over to Nigeria.
“Let me also add that the CBN will continue to monitor progress and respond promptly and flexibly to support economic recovery from COVID. We will closely watch economic and financial conditions, and we will use our monetary policy tools to respond.”