Nigerian foreign exchange reserves shed $578 million amid dollar scarcity

Nigerian foreign exchange reserves dropped from $36,656,047,017 on March 1, 2023, to $36,077,699,485 by March 15, 2023, thus shedding $578.347 million amid the rising dollar scarcity which has deeply affected investments in the country.

According to a document which analysed the movement of reserves from the Central Bank of Nigeria, CBN, $992 million was lost in 71 days.

While speaking on the steady decline noticed over the years, the governor of the CBN, Godwin Emefiele had last year, noted that Nigeria’s foreign reserves no longer came from crude oil but from non-oil proceeds.

Emefiele also revealed that the massive struggle in the country's foreign reserves has been linked to the battle to grow the naira as well as the increase in the demand for forex.

“The official foreign exchange receipt from crude oil sales into our official reserves has dried up steadily from above $3.0 billion monthly in 2014 to an absolute zero dollars today,” he said.

“The bulk of the money in Nigeria’s foreign reserves comes from the export of gas and oil to other nations. But increasing instances of crude oil theft have hurt Nigeria’s ability to export enough crude oil. Consequently, its foreign exchange reserves are falling,” he added.

Since 2020, the country has struggled to grow its foreign reserves and also meet its foreign exchange obligations.

The Apex bank has also created some policies to shore up its foreign reserves such as the introduction of the Naira-4-dollar scheme which pays N5 for every $1 repatriated by Nigerians living in the diaspora, and the RT200 non-oil export rebate which incentivises forex inflow from non-oil exports.

The RT200 program has generated over $4.9 billion which was received as inflows as of November 2022.