Nigeria’s Foreign Reserves rises marginally to $32.74 billion

The Central Bank of Nigeria (CBN) has reported that foreign reserves have experienced a slight increase, reaching $32.74 billion as of May 22, 2024, compared to $32.10 billion on April 22, 2024. This signifies a 2 percent rise ($640 million) in foreign reserves during this period.

The growth can be attributed to the surge in oil prices and the implementation of high monetary policy rates. The strength of the Naira against the US dollar is heavily influenced by the level of Nigeria’s foreign reserves. To ensure exchange rate stability and further bolster foreign reserves in the coming months, it is crucial to diversify export earnings beyond crude oil sales.

Nigeria’s reliance on the oil market for foreign exchange earnings necessitates an increase in exports from sectors such as manufacturing. This will help mitigate the volatility in foreign reserves caused by fluctuations in the oil market and low levels of crude oil production.

Moreover, deliberate efforts should be made to enhance investor confidence and attract private capital by implementing policies that eliminate barriers to conducting business and addressing security concerns.