Contrary to general believe that the current Nigeria government have saved more funds than the previous government. The Nation’s Foreign Reserve is yet to reach the May 2013 figure of $48.86 billion.
The May 2013 foreign reserve figure is the highest in 10 years between September 2009 to June 2019. Figures from the Central Bank of Nigeria (CBN) has revealed.
The highest Foreign Reserve balance since 2015 when the current administration took over was in May 10, 2018 when the reserve balance got to $47.86 billion and has since gone down to $45.07 billion as at June 2019. A $1 billion difference and an equivalent of between 4-5 months Foreign Exchange earnings when compared to the 2013 figures.
Foreign Reserve are held and managed by a country’s Central Bank as a means of managing the value of its national currency. It is also a measure by which a country provides confidence to foreign investors that their investment in the country is secure. Foreign Reserves also serves as a means of assurance that the country will meet its external obligations when due among other important pointers.
The Nigeria’s Foreign Reserve is largely dependent on the international price of Crude Oil (Nigeria major foreign exchange earner). Apart from the government disposition to growth it, fluctuations in Crude Oil price have significant effect on the amount held in the reserve balance of the country.
Monthly revenue from Crude Oil sales was at its peak in April 2011 when the nation made $245.2 million. it was also in the era when Crude Oil price was above $100 per barrel and the era of relative stability in the Nigerian Niger Delta region where oil is being produced.
The international price of crude got as high as $138.74 per barrel in June 2008. The boom in the Crude oil price lasted between 2008 and 2014.
Looking at the external reserve pattern during this period, it revealed that the highest amount was recorded in August 2008 when the reserve got to $64.85 billion. And the lowest was in October 2016 when the reserve was as low as $23.89 billion.
The oil price for the 2 periods were $115.84 per barrel and $50.94 per barrel respectively, the oil price in 2016 was just starting to rise from as low as $30.66 per barrel in January that year
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The highest monthly revenue from Crude Oil earned by the present administration is $123.52 million and it was in October 2018 when the Crude price was over $79 per barrel and the reserves was also over $42 billion this period.
The $79 per barrel was the highest price of Crude Oil in the life of the PMB administration. The administration has also grown the reserve to equivalent of the December 2013 figure when the Crude Oil price was above $110 per barrel.
By and large, the PMB administration has shown significant willingness to grow the countries reserve despite the minimal revenue available to it. What is left to be done however is to diversify the economy to make the country immune to the fluctuations in world oil prices.
The currently restrictions placed on the importation of items with local substitute is highly appreciated because no economy can grow without adequate protection for its industries and local producers.
Power and other infrastructure need to be tackled and make functional in other to maximise the gains in the forex restriction policy.