Nigeria’s foreign exchange reserves have started falling again, losing $23 million in the six days to last Thursday, according to the Central Bank of Nigeria.
The reserves had risen from $35.671 billion on Aug. 31 to $35.738 billion on Sept. 30 but fell to $35.725 billion on Oct. 8, the CBN data showed.
Amid the economic fallout of the COVID-19 pandemic, the country’s external reserves fell to a record low of $33.43 billion on April 29.
But the reserves started rising after the International Monetary Fund disbursed $3.4 billion loan under its Rapid Financing Instrument to the country for it to tackle the impact of the pandemic.
The CBN said in a recent report that the “external reserves are expected to lie between $29.9 billion and $34.3 billion at end-December 2020 (predicated on current declining oil price between $20 and $40).”
It said, “Sequel to the COVID-19 pandemic, the viability of the external sector in 2020 is expected to deteriorate, given the present worsening current account balance and depletion of external reserves driven, largely, by decelerating export receipts, particularly oil.
“Specifically, the degree of external reserves accumulation is expected to decelerate, as outflows are expected to outweigh inflows.”
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 percent of its GDP, but accounts for about 50 percent of government revenues and over 90 percent of export earnings.