Nigeria’s External reserves hit new high at $46 billion as it nears $50 billion target

Nigeria’s external reserves near its $50 billion target as it stood at $46 billion at the close of business on Friday, according to the nation’s central bank on Sunday.

Isaac Okorafor, acting Director, Corporate Communications Department of Central Bank of Nigeria (CBN), confirmed this in a statement where he noted that the reserves saw an increase of about $3.2 billion between a one-month period from February to March 2018.

Kicking off with $39.3 billion in 2018, the Nigerian external reserves grew by $3.5 billion to $42.8 billion in the month of February, hitting a new high of $46 billion at the end of the first week of March.

Nigeria’s external reserves now exceeds the $40 billion conservative projection given by the CBN governor, Godwin Emefiele, last year November during the country’s Annual Bankers’ Dinner in Lagos. As at March 2, the foreign exchange reserves had recorded a four-year high at $42.76bn.

While speaking in a Bloomberg interview earlier this month, Emefiele noted that the reserves might hit $60bn in 2019, if the trend persisted, given that increases in the price and shipment of oil -Nigeria’s biggest foreign-currency earner, and improved investor confidence could aid building its reserves to $60bn over the next 12 to 18 months.

Aside relentless effort from the nation’s central bank at disallowing needless importation and plummeting Nigeria’s import bill, the continued growth of the reserves is as a result of other contributing factors such as oil and non-oil exports inflow and significant inflows from investors and exporters through the foreign exchange market window, Okorafor pointed out while he explained that it had attracted over $33 billion in almost a year since it began in April 2017.

Bank intervention in the country’s foreign exchange window also aided the moderation of pressure on Forex reserves, through the sustenance of market liquidity as well as improvement in trade and production, the CBN director said.

CBN’s policy to restrict the access of 41 items importers to Nigeria’s foreign exchange Forex  had significant impact on the status of Nigeria’s reserves, and also increased the supply of local substitutes for imported goods, jobs creation in the country and improved the farmers and local manufacturers incomes.