Why Nigeria’s Facing FX Crises — CBN

The Governor of the Central Bank of Nigeria(CBN), Mr. Godwin Emefiele, has blamed the low revenue inflow from oil sales for the nation’s current foreign exchange crises.

Emefiele stated this during a panel session at the Nigeria International Economic Partnership Forum held in New York, United States, yesterday.

According to the President, Nigeria has for several months, failed to meet its Organisation of Petroleum Exporting Countries(OPEC).

He said that the nation’s crude oil revenue further dropped in August as oil production slumped to 900,000 barrels from one million barrels recorded in July according to the latest OPEC monthly oil report.

The development according to him led to massive depreciation of the Naira with exchange rate at the Import and Export window crashing to N436 to $1.

He said the CBN was already addressing the situation with its RT 200 project which will help boost foreign exchange supply with non-oil export proceeds repatriation.

Emefiele said in the first quarter of 2022, export repatriation was about $64 million, second quarter rose to $622 million, while the third quarter increased to $954 million, with projections that by the last quarter, the figures would have increased further.

He regretted that Nigeria is still highly dependent on oil revenue to support its import obligations, while assuring that government was aggressively looking at non- export for foreign exchange proceeds, to shore up the deficit in the months to come.

The CBN boss assured that Nigeria remains the best investment haven where returns on investment is guaranteed.

This was even as he noted that the country’s foreign exchange repatriation have equally dropped.

Do we have a large market yield for your business? Last year, it means the largest economy in Africa today. And we will continue to give all the policies that have been put in place to support growth and development and investment. And then engineers talking about the global economy and challenges I think why over the last one year, the global economy has been shaped by a number of factors, a higher than expected inflation was seen from the Russia- Ukraine war. Realistically, we’re seeing inflation moving. But that is why we’ve seen monetary authorities globally, doing everything possible to curtail inflation by actually reducing rates.

Practically all virtual authorities that did not receive liberty today are raising rates because the monetary authorities need to research so as to keep inflation on check. Another factor that we’ve seen globally is a slowdown in China. Going to count, pandemic lockdowns and property crisis. We’ve seen tighter financial conditions and international financial markets importance rising astronomically.

These also technically put pressure was the new inflation and these have also put pressure on output as well as the value of currencies. Look at this system tightening of monetary policy by major central banks. And in fact, earlier this week, the Swedish Central Bank raised rates by their highest margin in the last 30 years and the last couple of days whether the Fed was double headed by Fed this year originally by almost 3 percent already, and if the US Fed in history has raised rates in this year, one year by 2 per cent. You could imagine what that means for the global economy.

At the current levels that we’ve seen. We’ve seen all the issues of inflation has led to significant slowdown in global growth when I am progressing downwards, twice this year to 3.2perent in 2022 and 2.9 per cent in 2023.