Uncertainty and Nigeria’s foreign reserves

Uncertainty is not a language of investment, rather, an enemy and speculative, says an economist, Uche Nwagbo. But in the last six months, uncertainty has rent the air, offsetting gains in several sectors and stoking uneasiness in the general business environment. This is courtesy of political tensions both at the federal and state levels.

Unfortunately, it is now deepening and the repercussions are drenching economic activities, with poor outlook on foreign exchange reserves, equities and growth prospects.

In the last three months, the reserves, rather than accrete, have been on steady decline daily, despite rising crude oil prices at the international market.

Specifically, within these periods, the reserves have fallen from a record high of near $47.8 billion as at June 25, 2018, to a low of $43.97 billion presently, representing a seven-month record low. In other words, the reserves have depleted to the tune of $3.83 billion, an approximate average of $1.27 billion decline in the months of July, August and September, despite favorable oil price.

The Guardian, October 8, 2018

 

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