Nigeria’s external reserves have risen to $54.08bn, with economists saying the increase could strengthen the naira and boost investor confidence in the economy.
The economists spoke in separate interviews in Lagos on Sunday.
Prof. Sherifdeen Tella of the Department of Economics, Babcock University, commended the Central Bank of Nigeria (CBN) for sustaining the growth in the country’s reserves.
“The CBN management should be commended for sustaining the increase of the reserves because it will improve the value of the domestic currency.
“This will enhance the purchasing power of an average Nigerian and boost our balance of payment,” Tella said in a News Agency of Nigeria (NAN).
He said reforms in the foreign exchange market had contributed to increased foreign investment inflows, noting that investors were becoming more confident about bringing funds into the country.
“Many investors are now willing to bring their money into our economy because they realise that repatriating it will not be a challenge.
“These reforms have engendered investor confidence and improved the country’s rating internationally amid shocks,” Tella said.
Also speaking, Prof. Ndubisi Nwokoma of the Department of Economics, Caleb University, acknowledged the government’s efforts in building the country’s external reserves.
“The robust reserves will stabilise the currency and facilitate foreign trade.
“It will also extend the country’s import cover and help curb imported inflation,” Nwokoma said.
He identified diaspora remittances as an important contributor to the growth in external reserves.
“Currently, our country receives the second-largest diaspora remittances in Africa after Egypt.
“This has helped shore up the reserves, thanks to Nigerians abroad who send money through various International Money Transfer Organisation (IMTO) channels,” Nwokoma said.
He, however, urged the government to do more to address the economic hardship affecting people at the grassroots.
“The government should fund agricultural programmes more to empower people at the grassroots.
“This will enable the micro-level, which forms the bulk of society, to be empowered. The impact should flow from the bottom up, not the other way round,” Nwokoma said.
NAN reports that Nigeria’s external reserves have climbed to $54.08bn, their highest level since 2008.
Data from the CBN showed that the reserves stood at $54.084bn on September 3, representing an increase of $1.42bn from $52.66bn recorded on August 19.
The increase extends a sustained build-up in the country’s external assets. Since January 2, reserves have risen by $8.52bn, or 18.7 per cent, from $45.56bn.
Liquid reserves stood at $53.55bn, indicating that the bulk of Nigeria’s external reserves are readily available for conversion to cash to meet foreign exchange and external payment obligations.
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