The Central Bank of Nigeria (CBN) in an article published on its website reported that the country’s current forex could finance importation for goods and services for 8.3months. 

Driving the news 
According to the publication, Africa’s most populous country, Nigeria, whose foreign reserves stood at US$39.38 billion as of January 31, 2022, could fund beyond 8.3 months to an extension of 10.9 months if it was solely for the importation of goods.

  • CBN also states that “the total foreign exchange outflow decreased by 5.1 per cent to $3.41bn, from $3.59bn in the preceding period. A net inflow of $0.95bn was recorded in the month under review, compared with net inflow of $3.29bn in the preceding period.”

What this means 
This means that Nigerians are assured of forex for businesses if both the apex bank and the commercial banks operating in the country consider them a priority. 

State of play 
With limited access to forex, Nigerian businesses and individuals that require foreign expertise, equipment and services battle sustainability and profitability as they continue to scramble for foreign currencies to fund their businesses. The black-market players in the country have continued to exploit this gap, hence the high exchange rates citizens are suffering. 

  • Reports say Nigerian banks struggle to meet 30% of their customers’ forex demand as Nigeria has limited inbound forex sources.

What you should know 

  • Ten months after the Central Bank of Nigeria stopped the sale of forex to Bureau de Change operators, the forex scarcity is no better. Official channels on Friday May 20th 2022 show that dollars opened at ₦418.35/$1 while black market players buy a dollar for N605 and sell at N610. 
  • The CBN also pegged the monthly spend limit on Nigerian debit cards at $20 to save the naira. 
  • In Africa as at November 2021, South Africa the charts of countries with the most foreign reserves followed by Algeria and Namibia in third.
Leave a Reply

Your email address will not be published.