Data from the website Central Bank of Nigeria, CBN, reveals that the country’s external reserves has dropped to below $24 b ($23.95b) , the lowest in about 11 years. External reserves stood at about $23.9 billion back in October 2015.
Nigeria’s external reserves has been on the downward spiral since the fall in the price of crude oil began in the summer of 2014. Crude Oil production and export from Nigeria has also been affected by the unrest in the Niger Delta with a lot of pipeline bombing and damage to oil installations.
The Central Bank of Nigeria has introduced several policies measures that can help stem the outflow of forex from the country. However, most of the policy measures have back fired leading to more speculative attacks on the currency. Back in June, the CBN introduced a flexible exchange rate policy that ushered in the floating of the Naira. However, this has further led to a fragmented market with the country having 4 official exchange rates and a black market rates.
A fallout of some of these issues has resulted in a stifling of the economy leading to closure of most businesses and prolonging the recession in the manufacturing sector. Just recently, Emirates Airline has joined the likes of United Airlines and Iberia to exit Nigeria blaming lack of access to forex as a major challenge.
Nigeria’s external reserves was about $28.6 billion at the end of December 2015. Nigeria’s external reserve was about $39 billion in July 2014 when the fall in the price of crude oil started.