Why Nigeria’s foreign reserve shrunk by 40% 

From $40 billion in 2014, Nigeria’s foreign reserve has shrunk to $26 billion, shedding more than 35 percent within a year and may be further depleted.

The Federal Government has blamed the situation on poor earnings from the oil sector, which it said had also thinned by 60 per cent

But other findings have identified policy makers’ inability to launch a robust economic blue-print for the ugly development.

According to the research, failure of government to explore two alternative means of boosting the economy and reducing the present mono economy can be seen from the total neglect of solid mineral and agriculture, both of which are capable of raking in more than $5.5 billion per annum.

Tobias Udom, a geologist and an official of an extracting firm, Equinet Company ltd., put it this way:” it will take nothing away from government to licence willing companies to tap the solid minerals in parts of the country and go into business agriculture.

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“As at today, mining is taking place on various sites, but there is no coordination. If there were, foreign reserve will improve from the situation where individuals milk Nigeria through this sector.”

Though Minister of Information, Alhaji Lai Mohammed, accepted that the country did not invest in infrastructure development as another reason for the crisis, he merely placed  the blame on the past administration.

But research has shown that within a year, Saudi Arabia an oil producing country like Nigeria, with about one-fifth of Nigeria’s population, pushed up its foreign reserves from $500 billion to about $600 billion through diversifying its economy.

The same goes for most other oil-producing countries and member-counties of the Organisation of Petroleum Exporting Countries (OPEC).

However, only corporate and private citizens have been consistent in contributing to the GDP growth of Nigeria, given their tax returns periodically, which is said to be assisting government to meet some of its domestic obligations.

 

 

 

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