Foreign exchange inflows into Nigeria
fell by N678bn ($3.39bn) between January and June this year, findings
from various quarterly reports of the Central Bank of Nigeria have
shown.
Although the fall in forex during the
period was largely attributed to the significant drop in crude oil
receipts, analysts stated that the economic landscape in Nigeria,
particularly in the past three months, had not helped matters.
An analysis of forex inflows for the
fourth quarter of 2014, and the first and second quarters of 2015 showed
that foreign exchange movement through the CBN kept falling in each of
the quarters.
Provisional data from the CBN indicated that foreign exchange inflows in the fourth quarter of 2014 amounted to $10.36bn.
But
the latest report of the CBN for the second quarter of 2015 showed that
forex inflows stood at $6,97bn, indicating a decline of $3.39bn or
N678bn when calculated on N200 to a dollar.
The regulatory bank, in its second
quarter 2015 report, said, “Provisional data indicated that foreign
exchange inflows through the CBN in the second quarter of 2015 amounted
to $6.97bn, representing a decline of 16.1 and 45 per cent below the
levels in the preceding quarter and the corresponding period of 2014,
respectively.
“The development was due to the
significant fall in crude oil receipts, which more than offset the
marginal increase in inflow from its non-oil component. Foreign exchange
outflow through the CBN amounted to $8.2bn, showing a decline of 36.4
and 36 per cent below the levels in the preceding quarter and the
corresponding period of 2014, respectively.”
Further findings showed that the fall in
forex inflows was largely pronounced between the fourth quarter of 2014
and the first quarter of 2015, as the difference between both quarters
was put at $2.85bn or N570bn.
However, the difference in the forex inflows between the first and second quarters of this year was $540m or N1.08bn.
The CBN, in its report for the first
quarter of 2015, stated that “Provisional data indicated that foreign
exchange inflows through the CBN in the first quarter of 2015 amounted
to $7.51bn, representing a decline of 29.4 and 26.5 per cent below the
levels in the preceding quarter and the corresponding period of 2014,
respectively.
“The development was due to the fall in
both its oil and non-oil components. Foreign exchange outflow amounted
to $12.35bn, showing a decline of 15 and 21.3 per cent below the levels
in the preceding quarter and the corresponding period of 2014,
respectively.”
“What we have now are portfolio investors
who invest in shares, bonds and the likes. Those who are to invest in
the real sector are not coming. The forex inflows are declining and the
investment climate is not clear. So, the fall may continue if the right
steps are not taken as soon as possible.”said former President of the Association of National Accountants of Nigeria, Dr. Samuel Nzekwe,
He said the country should desist from
its reliance on oil revenue, stressing that only a clear-cut economic
policy would pacify investors who were always willing to invest in
Nigeria because of its abundant business potential.
“Even the many portfolio investors in
Nigeria today don’t know the policy direction of the government yet. So,
the best way out is to make investors know what to expect through
clearly defined economic policy. Maybe when the ministers take
positions, we will have a clearly defined economic policy.”
Analysts at the FBN Capital Research, an
arm of First Bank of Nigeria Plc, urged the government to treat economic
diversification with utmost importance, as this would boost the
country’s revenue and ensure forex inflows.
“The new administration is to treat
economic diversification as a priority. The non-oil sector accounts for
90 per cent of Gross Domestic Product but only five per cent of
merchandise export revenues. Policies geared towards harnessing this
sector will assist in boosting non-oil export earnings,” they added.Culled from Punch
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