Nigeria’s dollar account closes year above $40bn, first time in 3 years

Nigerian foreign reserves closed 2021 above $40 billion despite heavy withdrawing in the month of December.

Data from Central Bank of Nigeria (CBN) showed that as at 30 December 2021, Nigeria has in its dollar account $40.52 billion compared to $35.37 billion it ended 2020 and $38.59 billion in 2019.

The last time Nigeria ended the year above $40bn was in 2018 when CBN reported $43.11 billion.

However, compared to 2018, Nigeria’s dollar reserves in 2021 was largely helped by the $4 billion debt it secured through Euro Bond and also International Monetary Fund Special drawing rights deposit of $3.35 billion.

The rise in global oil prices also helped in the later part of 2021 but oil production challenges meant Nigeria could only make little gain from it.

These challenges mean CBN heavily relied on what was left in the reserves to meet holiday dollar demands.

Ripples Nigeria gathered that the CBN only made one deposit to the reserves in December 2021, which was $3 million.

Forex policies a threat in 2022

Meanwhile, the Centre for the Promotion of Private Enterprise, an economic think tank, has said the “monetary and foreign exchange policy rigidities” of the Federal Government may disrupt the economic growth of the nation in 2022.

The centre made this known in its ‘2022 Economic Outlook’

Read also: Naira value rises against US dollar after Christmas holiday

According to the organisation, there is no indication that the nation will shift from its current monetary and foreign exchange policy and this may hamper economic growth in 2022.

The centre said, “Monetary and foreign exchange policy rigidities may also pose a risk to the growth outlook as there are no indications of any significant shift in monetary and foreign exchange policy stance in the near term.

“Consequently, the distortions inherent in the foreign exchange market will persist in 2022. The constraining effect of the high Cash Reserve Requirement on financial intermediation would also persist in 2022 with a dampening effect on growth outlook.”

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