Following the success of the $2.5 billion Eurobond issue by the federal government last month, coupled with higher oil production and prices, Nigeria’s external reserves hit a five-year high of $46 billion on Friday, representing an increase of 18 per cent or $7 billion over the country’s reserves figure of $38.912 billion as of January 2, 2018.
It has also significantly surpassed the $40 billion target for 2018 announced by the Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, last November, and is expected to inch up to $50 billion in the next few months.
Findings by THISDAY also showed that the last time the reserves neared $46 billion was on February 6, 2013.
The federal government last month had raised $2.5 billion through the sale of Eurobonds under its Global Medium Term Notes Programme. The dual notes comprised a $1.25 billion, 12-year series and a $1.25 billion 20-year series.
The federal government said that proceeds from the Eurobond issue would be used for refinancing maturing domestic debt.
Confirming the latest reserves figures, CBN spokesman, Isaac Okorafor, in a statement yesterday, said the accretion of the country’s reserves was a result of the central bank’s continuous effort at vigorously discouraging unnecessary imports and reducing the nation’s import bill, inflows from oil and non-oil exports, as well as the huge inflows through the investors’ and exporters’ window of the foreign exchange market, which, he said, had attracted over $33 billion since April 2017, when it was created.
According to him, the CBN’s interventions in the forex window also helped to moderate the pressure on the forex reserves by sustaining liquidity in the market and boosting production and trade.
Okorafor also noted that the CBN policy restricting access to forex from Nigeria’s foreign exchange market to importers of some 41 items had made a huge impact on the status of Nigeria’s reserves and boosted the supply of local substitutes for imported goods, created jobs at home, and enhanced the incomes of farmers and local manufacturers.