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By Dipo Olowookere
The foreign reserves of Nigeria shrank in one week by $224 million or 0.58 per cent to $38.571 billion from $38.795 billion, data obtained by Business Post from the Central Bank of Nigeria (CBN) revealed.
Analysis indicated that the forex coffers of the nation, which prides itself as the largest economy in Africa, closed at $38.571 billion on Thursday, May 26, 2022, compared with the $38.795 billion it finished on Thursday, May 19, 2022.
On the penultimate Friday, Nigeria’s FX reserves shrank to $38.751 billion. Last Monday, it increased to $38.652 billion but depleted to 38.625 billion the next day and a day after, it decreased to $38.598 billion.
The depreciation in the forex buffers came despite an increase in the price of crude oil in the global oil market in the week.
Nigeria has not been able to take advantage of the Russia-Ukraine war to boost its FX earnings from crude oil sales and gas supply amid a shortage of supply in Europe as the European Union (EU) is planning to reject Russian energy as a form of punishment for invading Ukraine.
It was observed that the shrink in the reserves happened amid the injection of $210 million into the FX market to support the Naira and boost forex liquidity.
The sum of $100 million was allocated to Wholesale Secondary Market Intervention Sales (SMIS), $55 million was given to Small and Medium Scale Enterprises, while another $55 million was supplied to FX traders to meet the needs of users for BTA, medical, school fees and others.
The supply of FX to the market by the apex bank had a positive effect on the local currency last week as it gained N2 or 0.48 per cent against the United States Dollar at the Investors and Exporters (I&E) segment of the market to close at N418.33/$1 compared with the previous week’s value of N420.33/$1.
However, at the Peer-to-Peer (P2P) segment, the Naira depreciated against the greenback in the week by N1 or 0.16 per cent to N617/$1 from the previous week’s N616/$1 and at the black market, it remained flat at N600/$1 amid mopping up of dollars by politicians for the primaries ahead of the 2023 general elections.
This weekend, the ruling All Progressives Congress (APC) will conduct its presidential primary and it is expected that the Naira will remain under pressure because of the demand for forex to woo delegates for the presidential ticket.
As analysts at Cowry Asset put it, “we expect some level of pressure on the Naira against USD due to anticipated pressure on foreign exchange amid electioneering activity coupled with weak petrodollar earnings.”
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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via [email protected]
Naira Appreciates to N1,596/$1 at NAFEM, N1,620/$1 at Black Market
Naira Gains 28 Kobo Against Dollar at Official Market
Naira Trades N1,600/$1 at Official Market, N1,630/$1 at Black Market
Naira Maintains Stability against Dollar at Official Market
Naira Firms to N1,609/$1 at Official Market, Falls to N1,625/$1 at Black Market
Naira Slumps to N1,610/$1 at NAFEM, N1,620/$1 at Parallel Market
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By Modupe Gbadeyanka
The federal government has said bold reforms, improved coordination, and a renewed focus on national priorities by the administration of President Bola Tinubu has led to a significant turnaround in the Nigerian economy.
The Minister of Budget and Economic Planning, Mr Abubakar Atiku Bagudu, in a feature interview, attributed this to the bold step taken by Mr Tinubu to tackle the economic challenges faced by the country.
The feature interview is for an upcoming TV documentary marking President Tinubu’s second anniversary.
Mr Bagudu said the Renewed Hope Agenda of the current government was working and winning over investors at home and abroad, reaffirming the government’s commitment to the economic reforms.
“Mr President confronted Nigeria’s economic realities with bold and necessary choices—tough as they might be—and those measures are now yielding results,” he stated, noting that the reform-driven economy has seen four consecutive quarters of GDP growth, exchange rate stability, and a resurgence in private sector confidence.
“We have seen four quarters of successive economic growth, stability in foreign exchange, and appreciation by Nigerians and the international community. Rating agencies have consistently appreciated what we are doing,” Mr Bagudu stated, adding that foreign and domestic investors have responded positively to the government’s economic agenda, particularly agriculture, energy, and infrastructure.
“We have seen investors from Brazil, Belarus, and Saudi Arabia increasingly entering our agricultural space. The world economic community and multilateral institutions are putting more faith in our economy,” he noted.
According to the Minister, this renewed interest stems from the administration’s commitment to credibility, transparency, and structural change.
“Investors want to see good policy—can I get paid back? Are the numbers credible? Is the environment transparent? That’s why they appreciate when they see quarterly GDP growth,” he said.
“For the first time in 25 years, Nigeria is refining oil. Mr President was courageous enough to allow crude sale in naira to our refiners. This is a testament to his belief in our economy,” he added.
The Minister described removing fuel subsidies and unifying the foreign exchange market as transformative decisions restoring fiscal sanity.
“We were losing 5 per cent of our GDP on fuel subsidy—money going to just a few,” he said, noting that, “Mr. President took the courageous step to end it.”
“The foreign exchange reform removed uncertainty and favouritism. We now have a fair market—willing buyer, willing seller—which has generated revenue growth and boosted private sector confidence,” he remarked.
Mr Bagudu said the 2024 and 2025 budgets balance fiscal responsibility and strategic investment in priority sectors, noting that, “We have increased spending in health, education, infrastructure, security, and technology. The 2024 budget achieved significant deficit reduction, and more importantly, it showed that we are serious—and the markets believed us.”
He emphasised President Tinubu’s respect for the rule of law, even in managing inherited debt and Central Bank financing, saying “Mr President inherited N22.7 trillion in Ways and Means financing, but he insisted on respecting the Central Bank’s independence. That discipline is earning us credibility globally.”
The Minister credited the Presidential Economic Coordination Council and the Economic Management Team—led by President Tinubu and Coordinating Minister for the Economy, Wale Edun—with ensuring coherent, results-driven governance.
“This is teamwork. The President is the chief coordinator. He understands the global economic context, and the private sector respects him. We’re not just doing government-to-government coordination—the private sector is part of this reform effort,” he stated.
While acknowledging that the reforms may feel challenging in the short term, Bagudu likened the process to a necessary fitness regimen.
“Our economy is like a body going to the gym. It might feel painful now, but the muscles of progress are forming. Mr President is saying: ‘I’m ready to take the pain so our children and grandchildren will inherit a more prosperous Nigeria.’ This isn’t just economic reform—it’s a moral responsibility,” Mr Bagudu added.
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By Adedapo Adesanya
The Naira improved its value against the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Wednesday, May 14 by N3.26 or 0.20 per cent to settle at N1,596.75/$1, in contrast to the preceding day’s rate of N1,600.01/$1.
The renewed boost at the FX market came after the temporary US-China tariff reduction agreement and recent rally in oil prices, spurring the country’s external reserves to climb, standing above $38 billion amidst uncertainties in the global commodity market.
However, the local currency tumbled against the Pound Sterling in the official market at midweek by N7.09 to finish at N2,125.37/£1 compared with the preceding session’s N2,118.28/£1 and depreciated against the Euro by N6.52 to sell for N1,790.38/€1 versus Tuesday’s rate of N1,783.87/€1, according to data from the Central Bank of Nigeria (CBN).
As for the parallel market, the Nigerian Naira appreciated against its American counterpart yesterday by N10 to quote at N1,620/$1 compared with the previous day’s value of N1,630/$1.
A look at the cryptocurrency market showed that it tumbled on Wednesday due to profit-taking after the administration of President Donald Trump of the US and China hammered out a temporary suspension of their tariff disputes.
Also, the latest reading of Consumer Price Index (CPI) showed that prices rose at a slower pace than expected in April in the world’s largest economy.
Dogecoin (DOGE) depreciated by 6.1 per cent to sell at $0.2293, Litecoin (LTC) recorded a 5.1 per cent fall to trade at $98.72, Cardano (ADA) declined by 4.9 per cent to $0.7861, Solana (SOL) slumped by 4.7 per cent to $173.89, Ripple (XRP) lost 3.3 per cent to finish at $2.50, Ethereum (ETH) slipped by 3.1 per cent to $2,578.90, Binance Coin (BNB) went south by 2.9 per cent to $649.08, and Bitcoin (BTC) depreciated by 1.1 per cent to $102,583.51, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) sold flat at $1.00 apiece.
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By Adedapo Adesanya
Oil prices eased on Wednesday after government data showed crude stockpiles in the United States rose unexpectedly last week, prompting investor concerns of excess supplies.
Brent crude futures lost 54 cents or 0.81 per cent to sell for $66.09 per barrel and the US West Texas Intermediate (WTI) crude futures slipped by 52 cents or 0.82 per cent to $63.15 a barrel.
According to new data from the US Energy Information Administration released on Wednesday, US crude oil inventories saw an increase of 4 million barrels to 441.8 million barrels during the week ending May 9.
Crude oil prices were trading down before the crude data release by the US Energy Information Administration. On Tuesday, the American Petroleum Institute (API) reported a surprise build in US crude oil inventories of 4.287 million barrels in U.S. crude oil inventories with draws in gasoline and distillate stocks.
More worries came as the Organisation of the Petroleum Exporting Countries and allied producers (OPEC+) have started increasing supply to the market.
However, in the last month, combined crude oil production from the 22-member group dropped by 106,000 barrels per day in April compared to March, despite the pledge of the eight OPEC+ producers who are withholding supply to begin easing their cuts.
OPEC+ producers Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman decided to begin raising production in April, for the first time since 2022.
The figures in OPEC’s Monthly Oil Market Report (MOMR) published today suggest that the eight OPEC+ producers added fewer than 30,000 barrels per day to their collective supply in April, versus plans to add 138,000 barrels per day.
Saudi Arabia, OPEC’s top producer and leader of the OPEC+ pact, raised its production by 49,000 barrels per day compared to March and pumped 9 million barrels per day in April, according to OPEC’s secondary sources.
Declines in the sanctioned Iran and Venezuela, as well as in Nigeria, which frequently faces force majeure circumstances, offset the Saudi hike.
Total OPEC production (excluding allies) dropped by 62,000 barrels per day in April compared to March.
OPEC trimmed its forecast for growth in oil supply from the US and other producers outside the wider OPEC+ group this year.
It said output will rise by about 800,000 barrels per day in 2025, OPEC said in a monthly report, down from last month’s forecast of 900,000 barrels per day.
Also, a stronger the US Dollar weighed on prices on Wednesday. A stronger greenback makes oil traded in the American currency more expensive for investors holding other currencies, hurting demand.
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