Nigeria’s $45 billion external reserves can finance nine months of current import commitment – Emiefele

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The Investors and Exporters (I&E) forex window by the Central Bank of Nigeria (CBN) has attracted $48 billion worth of transactions to the economy and raise external reserves to $45 billion, CBN Governor Godwin Emefiele, has said.

The CBN boss, who spoke at the Special Convocation of the University of Nigeria, Nsukka, at the weekend, said Nigeria’s foreign exchange reserves have risen to $45 billion in April 2019 from $23 billion in October 2016.

Emefiele, who spoke on the theme: “From recession to growth: The story of Nigeria’s recovery from the 2016 Economic Recession”, said Nigeria’s current stock of external reserves can finance nine months of current import commitments. “With improved availability of foreign exchange, the exchange rate at the I&E FX window has remained stable over the past 24 months at an average of N360/$, and the parallel market exchange rate has appreciated from N525/$ in February 2017 to N360/$ today,” he said.

He explained that the Investors and Exporters FX (I&E) window introduced in April 2017 allowed investors and exporters to purchase and sell foreign exchange at the prevailing market rate. Also, the apex bank liberalised the exchange rate management following the approval of the “Revised Guidelines for the Operation of the Nigerian Inter-bank Foreign Exchange Market” on June 15, 2016 and its operationalisation on June 20, 2016.

“The commencement of this policy guideline introduced the Naira settled foreign exchange futures Mmarket,” Emefiele said. The CBN boss said the fiscal authorities concentrated on examining ways in which fiscal policy could support household consumption and business investments, as these two factors make up more than 85 per cent of Nigeria’s Gross Domestic Product (GDP) by expenditure.

“In this regard, the Federal Government budgets were readjusted to adequately address priority infrastructure needs that would support improved investments by the private sector. This was complemented by various Presidential initiatives on improving the ease of doing business in Nigeria, dismantling regulatory bottlenecks, enhancing competitiveness and industrialisation,” he said.

The apex bank also increased its lending to the agricultural and manufacturing sectors, through targeted intervention schemes such as the Anchor Borrowers Programme, Commercial Agricultural Credit Scheme and the Real Sector Support Facility. “In particular the CBN sought to improve domestic supply of four commodities (rice, fish, sugar, and wheat), which consume about N1.3 trillion annually in our nation’s import bill. The Anchor Borrowers Programme (ABP), which was launched in November 2015 by President Muhammadu Buhari, was designed to build partnerships between small holder farmers and reliable large-scale agro processors, with a view to increasing agricultural output, while improving access to credit for farmers,” he said.