Nigeria’s Foreign Exchange Reserves Drops By $992m Amid Rising Dollar Demand

Nigerian foreign exchange reserves has shed almost a billion dollars amid rising demand for dollar which has stiffled both local and forign investors.

Reserves fell from $37,069,719,189 on January 3, 2023 to $36,077,699,485 on March 15 this year.

Consequently, reserves in Africa’s biggest economy lost $992m in 71 days, according to data analysed from the movement of reserves of the Central Bank of Nigeria.

Nigeria has since 2020 struggled to meet its foreign exchange obligations and grow its reserves.

Foreign airlines have $744m trapped with the CBN, according to the International Air Transport Association (AITA).

Manufacturers and exporters have also decried the CBN inadequate dollar rationing.

The apex bank has made several policies to improve foreign exchange earnings like the Naira-4- dollar scheme which pays N5 for every $1 repatriated by Nigerians living in the diaspora, and the RT200 Non-Oil Export Rebate which incentivises forex inflow from non-oil exports.

The CBN said through the RT200, over $4.9bn were received as inflows in November 2022.

In 2022, data from the CBN revealed that Nigerians spent $695m on overseas education.

The amount was released by the CBN at a discounted rate to those who qualify for the Form A.

The ‘Form A’ provision allows Nigerians studying abroad access to foreign exchange at the official rate rather than sourcing from the parallel market.

This limits the gains of the different initiatives of the CBN aimed at bolstering the reserves, analysts have argued.