The Central Bank of Nigeria (CBN) has reported that Nigeria's foreign exchange reserves have fallen by about 25% to about $33 billion from $43 billion one year ago. The reserves have also dropped about 4% since November 2010.
Increased government spending in Nigeria has been putting pressure on the foreign exchange reserves and in October, Fitch, a ratings agency, lowered the credit outlook on Nigeria's sovereign debt to negative from stable, amidst concerns around the depletion of the foreign exchange reserves.
Even with crude oil prices above $80 a barrel dollar demand at the forex auction forced the CBN to dip into the reserves to defend the Naira last month.
The government also continue to run down its Excess Crude Account, which is financed from funds set aside for times when international oil prices fall below the benchmark rate in the budget.
"The views and opinions expressed in these comment(s) or article(s) do not necessarily reflect the views or opinions of NGEX, its partners or its affiliates."
Omotayo, J. A. Lagos, NIGERIA December 07, 2010
Those who see "Goodluck" to Nigeria on the basis of dogma may start to reflect seriously if their faith will not lead them to their fate very soon. We have been warning since 2006 that the noise makers who occupy vantage positions in Nigeria should confess their lack of know-how. A decline of $10 bn from our external reserves in one year even with higher prices of crude oil far above the 2010 benchmark is dangerous.
Unfortunately, even the sovereign wealth fund (excess crude oil) account is seriously depleted concurrently too. Yet Mr Olusegun Aganga was still comfortable with misinforming Nigerians that all is well, and that the economy has performed better. Yet no new industrial output, employment, etc. Only yesterday he bamboozed a group of mediorities on the need for a $10 bn soft loan to further stimulate the economy. We are watching and taking down notes of the misdemeanours of those in vantage positions who ignorantly or mischeviously mislead this country. We hope to examine these issues in detail very soon.
Time to account is just by the corner, God willing. We are definitely watching. God bless Nigeria.