Nigeria’s external reserves dropped further to the $34 billion, data from the Central Bank of Nigeria (CBN) has revealed.
According to the data, the nation’s foreign reserves depleted to $34.67 billion on Monday, April 6, 2020 from $34.98 billion on Thursday, April 2, 2020.
It was observed that on Monday, March 30, 2020, what was left in the buffers was $35.26 billion and the next day, Tuesday, March 31, 2020, it depleted to $35.16 billion, before declining to $35.01 billion on Wednesday, April 1, 2020.
From the analysis, the country’s FX reserves have decreased by about $491 million this month alone.
Last month, the nation’s reserves depleted by $1.14 billion and the hope of getting it quickly shored up is very dim due to the decline in the price of crude oil at the global market.
Recall that some days ago, Fitch Ratings said the FX reserves will likely decrease to around $32 billion due to uncertainty around oil.
Nigeria was forced to cut the 2020 oil benchmark to $30 per barrel from the initial $57 per barrel in the budget signed by President Muhammadu Buhari last December.
Much of Nigeria’s foreign exchange earnings come from crude oil and a problem in that sector always spells doom for the country.
In 2016, when prices were down and production disrupted in the oil-rich Niger Delta region of the country by agitators, Nigeria went into recession.
This time, the crash in the price of the commodity coupled with the coronavirus pandemic is hitting hard on the country’s economy and there are fears that another recession is just knocking at the door.
At a programme aired and monitored on Channels TV recently, the Minister of Finance, Mrs Zainab Ahmed, had warned that if things remain at their current level in the next six to 12 months, Nigeria may be hit by another recession in five years under this present administration.
She had said the country was not broke, but was also not buoyant enough to meet its needs especially due to the challenges posed by COVID-19.
On Monday, she said federal government was planning to get $6.9 billion from the trio of the International Monetary Fund (IMF), World Bank and the African Development Bank (AfDB).
She had said while the sum of $3.4 billion would be borrowed from the IMF, $2.5 billion will come from the World Bank and $1 billion from AfDB.
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