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Nigeria’s External Reserves Hits $34.66 Billion, Highest Record In 13 months

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Nigeria’s external reserves have surged by $1.88 billion, reaching a 13-month high of $34.66 billion as of July 4, 2024.

According to Nairametrics, research shows that this marks the highest level since the introduction of the foreign exchange unification policy in June 2023.

The significant increase in reserves is attributed to a series of financial commitments from Afrexim Bank and the World Bank, including loans, as well as the Central Bank of Nigeria’s (CBN) implementation of various foreign exchange reforms.

  • What The Data Reveals

On June 14, 2023, the Central Bank of Nigeria (CBN) unveiled a strategy to streamline the foreign exchange market by merging all segments into a single unified system.

This pivotal shift, aimed at fostering liquidity and stability within the Nigerian FX Market, ironically seems to have precipitated increased market volatility and a precipitous decline in the naira’s value.

When the CBN announced the FX unification policy, Nigeria’s external reserves were at $34.66 billion. However, from July to December 2023, the reserves fluctuated within the $33 billion range.

According to Nairametrics, the external reserve hit $34.66 billion as of July 4th 2024 the highest in over a year.

This is only second to the $34.69 billion achieved on the 13th of June 2023, just before the exchange rate was unified by the government.

Nigeria has been experiencing a surge in exchange rate in the last few weeks ending the month of June above $34 billion for the first time since April. The reserves have continued to swell in July hitting multiple highs that have now culminated in the highest reserve in the last one year.

  • Earlier Challenges

The central bank Governor had to address the issue of the decline at the last IMF Spring meeting, where he said that the decreasing reserves were primarily due to debt repayments and other standard financial obligations, rather than efforts to defend the naira.

However, since then, a gradual and consistent upward trajectory has been observed, coinciding with a period of exchange rate stability with the reserves eventually culminating into the $34.66 billion recorded on July 4, 2024.

In the past one month, the reserves have surged by 6% from $32.78 billion recorded on the same day of the previous month.

  • Policies Driving Reserve Growth

Earlier reports had it that as global forex reserves reached $12.3 trillion at the end of 2023, Nigeria’s forex reserves declined to $32.3 billion, representing just 0.26% of global reserves, down from 0.36% in 2022, mainly due to decreased forex inflows and increased outflows.

The recent rise in FX reserves since May comes after three months of noticeable fluctuations when it plunged to a low of $32.11 billion on April 19, 2024.

This earlier dip may be attributed to increased import demands, payment obligations, or reduced foreign inflows during that period.

The latest data from the National Bureau of Statistics also reveal Nigeria received a total capital importation of $3.9 billion in the first quarter of the year.

Most of the inflows were directed towards government debt securities such as treasury bills, OMO bills and bonds.

  • What You Should Know

The Monetary Policy Committee (MPC) recently urged the CBN to focus on boosting the external reserves.

To ensure a steady flow of foreign exchange into the country, the CBN plans to double the diaspora remittance inflow this year.

Also, Afrexim Bank earlier announced the disbursement of $925 million- another tranche of the $3.3 billion crude oil-backed loan agreement it entered into with the NNPC last year. The bank disclosed this in a statement on its website stating that the current disbursement brings the total payment for the facility to $3.175 billion. This loan is expected to help stabilize the forex market in light of the severe volatility.

The World Bank also recently approved $2.25 billion in loans to Nigeria to boost the country’s economic stability and support its vulnerable populations. This financial infusion is intended to provide immediate financial and technical support for Nigeria’s urgent economic stabilization efforts.

Amid the increase in reserves and financial commitments to Nigeria, Fitch noted that the lack of clarity over the precise size and composition of Nigeria’s FX reserves remains a significant constraint on the nation’s sovereign credit profile.

 

Credit: Nairametrics

BIG STORY

President Tinubu Signs South-East, North-West Development Commission Bills Into Law

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President Bola Tinubu has officially signed into law the South-East and North-West Development Commission bills.

The South-East Development Commission bill was sponsored by Deputy Speaker Benjamin Kalu, who represents the Bende Federal Constituency of Abia State.

After passing through the Senate and House of Representatives, the bill was transmitted to the President in June for his assent.

With the signing of the bill into law, the Commission will now receive funding to execute various projects in the South-East geopolitical zone.

The allocated funds will be used to address environmental challenges such as erosion, as well as reconstruct and rehabilitate roads in Abia, Enugu, Ebonyi, Imo, and Anambra states.

This move is expected to bring significant development and infrastructure improvements to the region.

In a statement issued by Levinus Nwabughiogu, his chief press secretary, Kalu expressed appreciation to the president for signing the bill into law.

The deputy speaker said the commission will “rehabilitate Igbo land” and foster unity among the people.

Tinubu also signed the north-west development commission bill into law.

Jibrin Barau, deputy senate president and sponsor of the bill, said the signing of the proposed legislation is a “testament” to Tinubu’s “commitment to addressing the challenges facing the north-west geopolitical zone and indeed all parts of the country”.

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Wike Urges Nigerians To Be Patient With FG, Says Planned Protest Political

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Nyesom Wike, Minister of the Federal Capital Territory (FCT), has dismissed the upcoming nationwide protest as a politically motivated move.

Speaking to journalists on Tuesday during an inspection of the Karshi to Apo Road construction project, Wike expressed his views on the planned protest.

The youth-led protest, scheduled to begin on August 1, aims to draw attention to the country’s economic hardship and soaring inflation.

However, Wike believes that the protest is driven by political interests rather than a genuine concern for the welfare of Nigerians.

According to Wike, the government is actively working to address the country’s challenges, implying that the protest is unnecessary and potentially disruptive.

His comments suggest that the government is making efforts to mitigate the economic difficulties faced by Nigerians, and that the protest may be an attempt to undermine these efforts.

“Let’s tell ourselves the simple truth. If we are playing politics let’s say we are playing politics; if we want to be sincere to ourselves, let’s be sincere to ourselves and help our country,” NAN quoted Wike as saying.

“The country is rotten. You know that the country is rotten, and a government has just come to see what it can do to at least, move it from where we are to a certain level, and you say that miracle must be performed within one year.

“You are here now, we are talking about a project that was awarded 13 good years ago, what has happened? Nothing.

“Now a government has come to see how it can fix all these things and we are in too much of a hurry demanding that it must be done now.

“It is not possible. The protest is a political protest.”

The minister acknowledged that people are unhappy due to hunger and unemployment.

“So, let’s not listen to political protesters and political jobbers who just want to be popular. You know there are some people who believe that if they don’t criticise, they will not be popular,” he said.

“We are going to elections very soon; these are political gimmicks.

“Just know that the government is a serious government and working to solve the problem.

“We believe that things will turn around, but we should be patient with the government.”

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Republican Lawmaker Andy Ogles Files Articles Of Impeachment Against Kamala Harris

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US Republican Lawmaker Andy Ogles has introduced two articles of impeachment against Vice President Kamala Harris, citing her alleged failure to enforce immigration laws.

Ogles accuses Harris of deliberately neglecting her duties as “border czar,” particularly in regards to border security and immigration law.

The first article of impeachment highlights Harris’ supposed inaction in addressing the border crisis, while the second article alleges a “breach of public trust.”

Ogles claims that Harris knowingly misled the public and Congress about President Joe Biden’s physical and cognitive health, sparking concerns about her integrity and ability to perform her duties as Vice President.

Ogles’ move to impeach Harris marks a significant escalation in the political tensions surrounding the Biden administration’s immigration policies and the Vice President’s role in addressing the border crisis.

The articles also claimed that Harris had been incompetent in discharging her duties.

Ogles’ first attempt to impeach Harris last year was unsuccessful and stalled in the judiciary committee.

The lawmaker’s second trial comes 48 hours after Biden withdrew from the presidential race and endorsed Harris to take his place for the Democratic Party’s ticket.

Biden’s shaky debate performance against former President Donald Trump last month, which heightened concerns over his age and mental alertness, was the catalyst for Democrats’ calls for him to end his reelection campaign.

The Democrat has not formally announced Harris as the party’s flagbearer. If nominated, she would be the first Black and South Asian woman to be a major party nominee.

On Monday, the presidential hopeful raised more than $81 million in donations to her cause.

The amount is believed to be the largest 24-hour fundraising in the history of the US presidential campaign.

Ogle’s impeachment calls have not received support from any member of Congress.

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