- CBN says Nigeria's external reserves will last for eight to six months for the importation of good into the country
- The apex bank said Nigeria's external reserves increased in the fourth-quarter of last year
- In its fourth-quarter economic report, CBN stated that foreign portfolio dwindled due to EndSARS protest
The Central Bank of Nigeria (CBN) said the EndSARS protest contributed to the decline in foreign investment in Q4 2020. The apex bank also stated that Nigeria's external reserves are enough to finance the importation of goods for the next eight to six months.
The financial regulator stated that foreign portfolio investments (FPI) reversed due to declined investors' confidence in Nigeria's economy during the period in review. It hinted in the bank's fourth-quarter economic report that this occurred due to several factors weighing on monetary policy.
EndSARS protest, pandemic, curfew during the lockdown, and low demand for oil were some factors mentioned as headwinds against the monetary policy in the fourth quarter of last year. In report opined:
"The second wave of the COVID-19 pandemic, the ‘EndSARS’ protests and implementation of curfew in some states, decline in crude oil prices, negative emerging markets sentiments and slowdown in economic activities were the major headwinds against monetary policy in the review period.
"These factors caused reversals of Foreign Portfolio Investments (FPI) as investors’ confidence in the domestic economy waned. However, key financial market indicators remained moderately stable, due to effective liquidity management by the Bank."
Nigeria's external reserves to last for about eight months
CBN said the external reserves had improved slightly in the fourth quarter. The CBN made this known in the fourth-quarter economic report. The apex bank said the external reserves had increased by $0.79 billion between October 2020 to December of the same period.
It was gathered that as of end-December 2020, the external reserve was $36.46 billion, rising past the $35.67 billion recorded at the end of September 2020. According to the monetary policymaker, the improvement in external reserves was caused by reforms.
The report stated that the financial regulator had blocked leakage of remittances and enhanced its inflow into the country:
"The external reserves at end-December 2020 was US$36.46 billion, compared with US$35.67 billion at end-September 2020.
"This showed an accretion of US$0.79 billion. At this level, the foreign reserves could finance 8.4 months of import of goods or 6.3 months of import of goods and services.
"The improvement in external reserves was attributed to the reforms undertaken by the Bank to block leakages and ensure enhanced inflow of remittances from Nigerians in Diaspora."
Meanwhile, Legit.ng had earlier reported that oil expert, Olagoke Balogun said Nigerian government can't run the local refinery due to corruption. He said the decision President Buhari had made will take 15 years to correct.
He also blamed late President Yar'Adua for the position Nigeria's refinery is currently. According to the entrepreneur, one of the greatest atrocities committed by the Nigerian government was the reversal of privatising the local refinery by Yar'Adua.
Fakoyejo Olalekan is a Business and Financial Journalist with over three years of experience in covering finance and business activities within Nigeria and offshore. Prior to joining Legit.ng, he worked at Nairametrics where he wrote financial and investment analysis articles. Olalekan is a resourceful and result-driven journalist with a track record for conducting extensive research and interviews to produce articles that provide different perspectives to market activities.