External reserves drop by $180m in two weeks
The country’s external reserves lost $180m in two weeks, the latest figures obtained from the Central Bank of Nigeria showed on Sunday.
According to the figures, the reserves, which stood at $33.28bn on July 1, dropped to $33.09bn as of July 12 before gaining slightly to rise to $33.1bn on July 15.
The reserves lost $905.5m in June, after it fell to $33.32bn at the end of June 30 from $34.23bn on May 31.
The reserves stood at $34.88bn at the end of April 30, according to the CBN.
A member of the Monetary Policy Committee, Adeola Adenikinju, said at the last meeting that as a country, the excessive dependence on oil for revenue and foreign exchange sustenance was no longer tenable in the medium and long term.
He said, “We need to diversify the economic and revenue base of the economy to reduce our exposure to external shocks as well as prepare the economy for the global shift from fossil fuel to green economy.
“It should not be business as usual for our economic managers. The economy also needs a strong buffer to mitigate external volatility.”
Another member of the MPC, Ahmed Aliyu, said beyond the decline in oil prices was the growing paradigm shift from oil to a green economy which posed a threat to future oil demand.
The CBN report at the end of the MPC meeting showed that the share of fossil fuels was set to decline from the current 85 per cent of total primary energy demand in 2018 to between 20 and 65 per cent by 2050.
It said as such, crude oil demand was forecast to decline, led by the evolution of electric, hydrogen and biofuel-powered means of transport.
It stressed the need to diversify the Nigerian economy.
It said in addition to adopting new technologies that supported the agenda of the green economy, Nigeria’s developmental objectives should also focus on encouraging non-oil export promotion to improve the country’s trade balance and increase the accretion to external reserves.