The nation’s external reserves  are on the rise again.  It has hit $47.1bn, according to the latest report from the Central Bank of Nigeria.

Last week, the foreign reserves dropped by $1.8bn from the peak of $48.85bn on May 2 to $46.98bn on August 5.

The  external reserves, however, rose to $47bn on August 7; and had managed to stay at $47.1bn in the last one week, the latest data on the CBN website stated.

The performance of the reserves was driven mainly by proceeds from the crude oil, gas exports and crude oil-related taxes as well as reduced funding of the Wholesale Dutch Auction System on the account of huge inflow of foreign portfolio investments.

The Governor, Central Bank of Nigeria, Mr. Lamido Sanusi, said in May that the outlook for the country’s foreign reserves this year was mixed.

Sanusi told Bloomberg that the foreign-currency reserves would probably keep expanding, while facing risks from lower-than-projected oil output and falling prices.

He said, “Quantitative easing by central banks in the United States, United Kingdom and Japan all point to a likelihood of strong capital flows to emerging and frontier markets that may benefit Nigeria.

“Still, the combination of lower global oil prices and weak output performance in Nigeria may lead to a slowdown.”

Oil production in Nigeria fell to 1.81 million barrels a day in March, the lowest level since September 2009.

According to the CBN, the country relies on crude exports for about 80 per cent of government revenue and more than 90 per cent of foreign income.

“We always said that the budget based on projections of about 2.5 million barrels per day was founded on overly optimistic and unrealistic assumptions,” Sanusi said.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, had stressed the need for the country to shore up its external reserves.

The Federal Government had targeted $50bn reserves by the end of 2012.

The reserves, however, closed the year at $44.26bn on December 24, 2012, finishing $6bn below the government’s target.

The country’s foreign reserves had fallen by 2.78 per cent month-on-month to $47.11bn on July 11.

Reserves in Nigeria, Africa’s second biggest economy, stood at $48.46bn on June 11.

Source: Punch (by Oyetunji Abioye)