Nigeria’s external reserves hit $35bn after tumbling to $33bn

Nigeria’s foreign exchange reserves have risen by $1.51bn in the last two weeks to hit $35bn.

The reserves, which closed at $33.52bn at the end of April, increased to $35.03bn on May 14, according to data obtained by Markets Reporters from the Central Bank of Nigeria.

The country’s external reserves had come under pressure in recent months, falling to a record low of $33.43bn on April 29.

Nigeria, Africa’s top oil producer, has been hard hit by the coronavirus pandemic, which caused a sharp drop in the price of oil, its main source of government revenue.

Oil and gas represents only about 10 per cent of its GDP, but accounts for about 50 per cent of government revenues and over 90 per cent of export earnings.

Analysts at FBNQuest, an investment bank, noted early this week that Nigeria’s gross official reserves declined by $1.64bn in April to $33.52bn.

They said this was the eleventh monthly decline in succession, adding, “This cumulative fall of $11.60bn is largely due to the exit of foreign portfolio investors.”

The bank said, “A recovery of sorts is assured now that the International Monetary Fund has disbursed $3.4bn under its Rapid Financing Instrument to tackle the impact of COVID-19.

“Additional concessional financing is likely from other partners, notably the World Bank and the African Development Bank. Such inflows go directly into reserves. The cash from the RFI has already been banked.”