The nation's external reserves, which have risen steadily since last year due to reasonably high oil prices and stability in the foreign exchange market, rose higher to $47bn on February 21, 2013.

Data obtained from the Central Bank of Nigeria's website on Friday showed that the reserves recorded $2.68bn appreciation in seven weeks, from $44.34bn recorded from the beginning of the year till date.

Analysts at FSDH Merchant Bank Limited, in a report made available to our correspondent, said the collaboration between the Federal Government and the CBN to improve the external reserves position had continued to yield positive results.

The report said, "Also, the favourable oil prices at the international market, improved domestic output, fiscal prudence, improved ratings from agencies and the inclusion of FGN Bonds in the JP Morgan Emerging Market Government Bond Index have all contributed to the improvement in the external reserves position of the country.

"The current external reserve can support stable exchange rate in Nigeria. The current level of external reserve is higher than both the International Monetary Fund and FSDH Research projections. The reserve is sufficient to cover over 11 months of imports of goods and services, higher than the threshold of three months."

The National Bureau of Statistics last Monday said the country's external reserves would experience less pressure this year due to a reduction for the demand for foreign exchange to settle high import bills.

The bureau said in a report released in Abuja that the projected increase in the value of total merchandise trade was expected to generate higher external reserves through exports.

This, it hoped, would lead to a higher increase in the supply of foreign exchange demand.

The Governor, CBN, Mr. Lamido Sanusi, had last month said the country's foreign reserves were driven mainly by proceeds from crude oil, gas exports, and crude oil-related taxes as well as reduced funding of the Wholesale Dutch Auction System on account of the huge inflow of foreign portfolio investments.

He said the country's foreign reserves could finance about nine months of imports.

The NBS report stated, "The recent declines in imports are expected to carry on till the third quarter of 2013. Beyond this point, the growth rate in imports is expected to yield positive year-on-year changes.

"By the fourth quarter of 2013, growth in the value of total merchandise trade will be driven by both higher imports (relative to fourth quarter 2012) as well as oil and non-oil exports."

The Federal Government had failed to meet its target of raising the external reserves to $50bn by the end of 2012.

The country's reserves had closed the year at $44.26bn on December 24, 2012.

Source: http://odili.net/news/source/2013/feb/25/800.html

Mehn u love politics so much, ur threads r mainly about it, well, bye, I have nothin to contribute

Maya2pretty: Mehn u love politics so much, ur threads r mainly about it, well, bye, I have nothin to contribute

Yeah, I do.
I hope that FG would invest part of this money on federal infrastructures nationwide; and institute an education grant to be accessed by both Secondary and University students.

But 'our' Economy is on the verge of Collapse na....... Signd, ACN

taharqa: But 'our' Economy is on the verge of Collapse na....... Signd, ACN

Lol .

I agree though, that the Executive branch should reduce it's over-head costs. The numbers of special advisers, senior special assistants etc has to be drastically reduced. The NASS should follow suit with a similar reduction in the number of their aides, and a 50% downward review of their total emoluments.
In addition, there should be a constitutional amendment that will cap the maximum number of ministers to be appointed, at 30. Better still, to "carry along" all the political stakeholders in the geo-political zones; a maximum of 4 ministers could be appointed from each zone.
These measures would substantially curtail the explosion in the cost of running the Federal government.

CFCfan:

Yeah, I do.
I hope that FG would invest part of this money on federal infrastructures nationwide; and institute an education grant to be accessed by both Secondary and University students.

Nah... Doesn't work that way. Foreign reserves aren't necessarily available for domestic spending. It's simply a pool of funds mainly used to finance imports and ensure short-run foreign exchange stability.

It's not for domestic consumption.

CFCfan:

Lol .

I agree though, that the Executive branch should reduce it's over-head costs. The numbers of special advisers, senior special assistants etc has to be drastically reduced. The NASS should follow suit with a similar reduction in the number of their aides, and a 50% downward review of their total emoluments.
In addition, there should be a constitutional amendment that will cap the maximum number of ministers to be appointed, at 30. Better still, to "carry along" all the political stakeholders in the geo-political zones; a maximum of 4 ministers could be appointed from each zone.
These measures would substantially curtail the explosion in the cost of running the Federal government.

Good points, but how many of us are willing to occupy the National Assembly until these changes are made?

taharqa: But 'our' Economy is on the verge of Collapse na....... Signd, ACN

HNosegbe:

Nah... Doesn't work that way. Foreign reserves aren't necesarily available for domestic spending. It's simply a pool of funds mainly used to finance imports and ensure short-run foreign exchange stability.

It's not for domestic consumption.

Thanks for the correction. In that case, some part of the Excess Crude Account or Sovereign Wealth Fund could be used for domestic spending.

taharqa: But 'our' Economy is on the verge of Collapse na....... Signd, ACN

Dont mind the ACN propagandists and liars.

Anyway, great news. Hopefully, it will hit $50billion by end of first quarter.

CFCfan:
Thanks for the correction. In that case, some part of the Excess Crude Account or Sovereign Wealth Fund could be used for domestic spending.

So how much will be saved?

HNosegbe:

So how much will be saved?

I'm not sure, but I think the ECA is over $10 billion. At least, $5 billion can be dedicated to infrastructure and education.

Just in time, when I was arguing with the numbnut called eko-ile who kept insisting the Nigeria is disappearing into thin air, I made it clear to him that GEJ may have his problems, but the dude has improved real sectors. Agriculture from last three years gained about 35% increase of our GDP - from 32% to about 44%, that's exports right there.

The bunkum are so sold on their ACN propaganda, Madam NOI reduced our dependence on oil revenue funding our budget from 905 where it was about 3years ago to now where it represent about 72%, that's like a 20% decrease and she's still sourcing revenues from other sources other than oil so we're not dependent on it.

Abeg, if GEJ continues his transformation in Agriculture, plus electricity, we won't have to export raw agricultural produce anymore we can process them and export finished goods, that will double FOREX. Manufacturing has a 1.8% + average change in 2012, it means GEJ is getting it right in some aspects. Imagine if we're to add 2% manufacturing each year, in 7years vision 2020, Nigeria's GDP will boast of about 20% manufacturing. NOT AN EASY TASK. All of these, when exported, provides FOREX... hehe

Seriously, what will $47bn reserve do for the average man on the street? Was it not the same reserve Obasanjo piled up and when the scavengers got into power they reduced it to nothing? Maybe someone needs to re-read NBS forecast again, i.e. if they are anything to go by and ask if $47bn is really a reserve or some of that is money we are holding on behalf of someone else.

If the nation was truly experience boom and stability and reserve was growing at a fast pace, then one would really cheer at news such as this. If the FG can not shore up the excess crude account to the level it was during obasanjo's tenure or even more than that, then there is fire on the mountain just ahead! Why? the huge debt of the FG needs to be financed at some point in the very near future and if excess crude is depleted, then the obvious savings that will be used will be the foreign reserve.

Omo_Tier1: Seriously, what will $47bn reserve do for the average man on the street? Was it not the same reserve Obasanjo piled up and when the scavengers got into power they reduced it to nothing? Maybe someone needs to re-read NBS forecast again, i.e. if they are anything to go by and ask if $47bn is really a reserve or some of that is money we are holding on behalf of someone else.

If the nation was truly experience boom and stability and reserve was growing at a fast pace, then one would really cheer at news such as this. If the FG can not shore up the excess crude account to the level it was during obasanjo's tenure or even more than that, then there is fire on the mountain just ahead! Why? the huge debt of the FG needs to be financed at some point in the very near future and if excess crude is depleted, then the obvious savings that will be used will be the foreign reserve.

The Foreign Reserve can also serve as Nigeria's "rainy-day" funds. That is if every govt in Nigeria is dead broke.

If the Foreign reserve is depleted they scream . . .Even when it's shored up, they yell it doesn't mean anything . . Nigerians

CFCfan:

The Foreign Reserve can also serve as Nigeria's "rainy-day" funds. That is if every govt in Nigeria is dead broke.

Isn't that the point I am making? Rainy day fund for who? average Nigeria? I really do not think so. Just like the bizarrely depleted the previous savings with nothing on ground to show for it, they will do same with this savings.

The essence of a huge reserve for a growing economy like Nigeria is not for day to day funding of pets projects in the country, rather it is for you to provide the necessary backings to different cheap loan offers out there that the nation could afford and invest into massive infrastructural development. That way, institutions will be will to give you the loans, grants, etc because they know you have the where withal to repay the loan back.

If anything, I would prefer state are mandated to keep certain percentages of their yearly revenues as savings. This will ensure that each state will have savings to service their debts in the near future. Same goes with the FG.

The other question that begs for answer is, how come in barely 7 weeks, $2.7bn was saved in the foreign reserves? What has been happening to previous oil sales throughout 2012? Has there been any recent oil boom in the last 5 months? I really do not think so. Hence it is obvious some one has been playing chinese tales with the foreign earnings..

manny4life: Just in time, when I was arguing with the numbnut called eko-ile who kept insisting the Nigeria is disappearing into thin air, I made it clear to him that GEJ may have his problems, but the dude has improved real sectors. Agriculture from last three years gained about 35% increase of our GDP - from 32% to about 44%, that's exports right there.

The bunkum are so sold on their ACN propaganda, Madam NOI reduced our dependence on oil revenue funding our budget from 905 where it was about 3years ago to now where it represent about 72%, that's like a 20% decrease and she's still sourcing revenues from other sources other than oil so we're not dependent on it.

Abeg, if GEJ continues his transformation in Agriculture, plus electricity, we won't have to export raw agricultural produce anymore we can process them and export finished goods, that will double FOREX. Manufacturing has a 1.8% + average change in 2012, it means GEJ is getting it right in some aspects. Imagine if we're to add 2% manufacturing each year, in 7years vision 2020, Nigeria's GDP will boast of about 20% manufacturing. NOT AN EASY TASK. All of these, when exported, provides FOREX... hehe

With all due respect, if your state in bold is true, then 2013 budget would not have been benchmark with oil prices. Can I ask you were those manufacturing figures you are quoting are from? Seriously, do you really mean manufacturing has increase 1.8% - do you know what means in reality? But I would await your substantiation before I comment further.

Omo_Tier1: Seriously, what will $47bn reserve do for the average man on the street? Was it not the same reserve Obasanjo piled up and when the scavengers got into power they reduced it to nothing? Maybe someone needs to re-read NBS forecast again, i.e. if they are anything to go by and ask if $47bn is really a reserve or some of that is money we are holding on behalf of someone else.

This is not what it can do for the average man on the street but how does it reflecct macro-economically on small and mid-size business. According to the report, with its current standing, NBS and CBN claims it can pay import bills for the next 11months, this is assuming no extra was added. What that means is that (just like I argued on the SA thread), Nigeria is now exporting more than it imports. It may be hard to believe, but it's the truth.

Obasanjo piled it up like you put it but you forget that the odds against OBJ was really low than GEJ now. Please pull up the annual averages from 1999 to 2007, you will see that OBJ had it good, oil prices were high sometimes between 2003 or so. Yes there was so much demand for our oil then, now fast forward to 2011, 12 and now 13, Nigeria is BARELY struggling to sell it's oil now due to U.S. it's major buyer has reduced purchase because they have better discoveries.

Thanks to the Obama Administration, U.S. may NEVER need to buy oil or gas. Due to poor R/D, our discoveries are low, oil companies are selling their stake and leaving, SHELL BP did. Its even rumored that oil export is very low, now u see why Madam NOI had the urgency to diversify revenues immediately and I must commend her, she's doing a wonderful job.

jmaine: If the Foreign reserve is depleted they scream . . .Even when it's shored up, they yell it doesn't mean anything . . Nigerians

Its not Nigerians. These are very few (in fact negligible) but noisy internet rats and cockroaches.

Omo_Tier1:
With all due respect, if your state in bold is true, then 2013 budget would not have been benchmark with oil prices. Can I ask you were those manufacturing figures you are quoting are from? Seriously, do you really mean manufacturing has increase 1.8% - do you know what means in reality? But I would await your substantiation before I comment further.

I haven't said that our budget isn't financed, read this part again

The bunkum are so sold on their ACN propaganda, Madam NOI reduced our dependence on oil revenue funding our budget from 905 where it was about 3years ago to now where it represent about 72%, that's like a 20% decrease and she's still sourcing revenues from other sources other than oil so we're not dependent on it.

What I'm saying is 72% rather than 90 of our budget income is coming from oil sales. You can look it up yourself. Yes, there's still need for oil and it's benchmark prices, but my argument is that gradually we're reducing it, and focusing on other receipts such as Taxes from imports and exports, royalties, small business income taxes, VAT, etc. With small businesses springing up, we're getting it good.

Yes, I know what I mean. If you look at the GDP breakdown from 2011, manufacturing was about 2% or average 2%, now look at 2012, that figure jumped to 3. or 4., you can get the NBS data for yourself. In fact, let me search to prove to you. Nigerians are gradually manufacturing and this is because of the ones who registered. The smaller scale ones, when registered, you'll see the difference.

Nice arguments so far from everyone!
Mods, please take this topic to the frontpage.
Thanks.

manny4life:

This is not what it can do for the average man on the street but how does it reflecct macro-economically on small and mid-size business. According to the report, with its current standing, NBS and CBN claims it can pay import bills for the next 11months, this is assuming no extra was added. What that means is that (just like I argued on the SA thread), Nigeria is now exporting more than it imports. It may be hard to believe, but it's the truth.

Obasanjo piled it up like you put it but you forget that the odds against OBJ was really low than GEJ now. Please pull up the annual averages from 1999 to 2007, you will see that OBJ had it good, oil prices were high sometimes between 2003 or so. Yes there was so much demand for our oil then, now fast forward to 2011, 12 and now 13, Nigeria is BARELY struggling to sell it's oil now due to U.S. it's major buyer has reduced purchase because they have better discoveries.

Thanks to the Obama Administration, U.S. may NEVER need to buy oil or gas. Due to poor R/D, our discoveries are low, oil companies are selling their stake and leaving, SHELL BP did. Its even rumored that oil export is very low, now u see why Madam NOI had the urgency to diversify revenues immediately and I must commend her, she's doing a wonderful job.

Firstly, let me dispel your bogus claim that Agriculture contributed 34% to GDP in 2012. That figure is not for entire 2012 but for Q1 of 2012. Go to think link and see details for yourself.. http://www.nigerianstat.gov.ng/pages/download/72

Secondly, Nigeria crude, is one of the most sort after and if anything, the volume of Gas being sold by Nigeria today has increased hundred fold compared to Obasanjo's tenure. Moreover, internally generate revenue during Obasanjo's era and now is completely different.

Stop buying in those false information that Nigeria is struggling to sell her crude. Nigeria would have secured long term contracts on crude sales and if anything, being an OPEC member, you are almost sure your allocated production quantity will be sold.

The question is posed was a simply one: How will this affect the common man on the street? We know imports will not stabilize as manufacturing is comatose. The naira is very weak due to the fragility in the economy. Even Sanusi will tell you, the reserve is not good enough as 9 months of import for a population of over 160 million is a disaster in any economic planning. The minimum we should be talknig about is 18 months of imports.

Am I here to condemn NOI? Certainly not, all I am asking for is the average Nigeria should feel the effects of these savings. At least if as a result of these saving some of the imported items see price reduction, then you will appreciate. I would rather have $15bn of that reserve used for massive infrastructure development all over the country, with stable electricity provided and water made available to Nigerians than keep dancing alingo to some money in foreign account that we really do not have control over.

Omo_Tier1:
Firstly, let me dispel your bogus claim that Agriculture contributed 34% to GDP in 2012. That figure is not for entire 2012 but for Q1 of 2012. Go to think link and see details for yourself.. http://www.nigerianstat.gov.ng/pages/download/72

Secondly, Nigeria crude, is one of the most sort after and if anything, the volume of Gas being sold by Nigeria today has increased hundred fold compared to Obasanjo's tenure. Moreover, internally generate revenue during Obasanjo's era and now is completely different.

Stop buying in those false information that Nigeria is struggling to sell her crude. Nigeria would have secured long term contracts on crude sales and if anything, being an OPEC member, you are almost sure your allocated production quantity will be sold.

The question is posed was a simply one: How will this affect the common man on the street? We know imports will not stabilize as manufacturing is comatose. The naira is very weak due to the fragility in the economy. Even Sanusi will tell you, the reserve is not good enough as 9 months of import for a population of over 160 million is a disaster in any economic planning. The minimum we should be talknig about is 18 months of imports.

Am I here to condemn NOI? Certainly not, all I am asking for is the average Nigeria should feel the effects of these savings. At least if as a result of these saving some of the imported items see price reduction, then you will appreciate. I would rather have $15bn of that reserve used for massive infrastructure development all over the country, with stable electricity provided and water made available to Nigerians than keep dancing alingo to some money in foreign account that we really do not have control over.

Read again,

I stated from where it was about 3years ago or more which means back in 2009/10 figures..

Lol, you think it has increased, you're very funny. U.S. is the LARGEST buyer of Nigerian oil, don't get it twisted, if it was the most sought after, why was the APC abi is it ACN secretary calling for alarm.

If Nigeria wasn't struggling to sell her crude, why did the the benchmark drop from $72 to $62 for next years budget?

Why does Nigeria have to export all the way to Asia to sell her crude? Brother keep up to date with current events because you seem to think Nigerian Crude will continuously sell.

If we have ABSOLUTELY NO control over our foreign reserves, then the CBN/Presidency should save us all the stress in making such announcements.

manny4life:

Read again,

I stated from where it was about 3years ago or more which means back in 2009/10 figures..

Lol, you think it has increased, you're very funny. U.S. is the LARGEST buyer of Nigerian oil, don't get it twisted, if it was the most sought after, why was the APC abi is it ACN secretary calling for alarm.

If Nigeria wasn't struggling to sell her crude, why did the the benchhmark drop from $72 to $62 for next years budget?

I think the drop in the benchmark was necessitated to have some savings from our crude oil sales. The proceeds ($10) then go into the Excess Crude Account.

The question is posed was a simply one: How will this affect the common man on the street? We know imports will not stabilize as manufacturing is comatose. The naira is very weak due to the fragility in the economy. Even Sanusi will tell you, the reserve is not good enough as 9 months of import for a population of over 160 million is a disaster in any economic planning. The minimum we should be talknig about is 18 months of imports.

On the contrary, the Naira isn't weak, it has gained suffiency because

A. Exports are greater than imports now, though we have increase agriculture production

B. According to the newly released report from the CBN, inflation drop to single digit. How does it affect prices of Garri, you won't see it but for someone importing, every Naira on the dollar for say $10,000 is money for him which in turn affects our exchange.

C. Well they told you that it was 11months, for us to earn $2billion in 2months even shocked the analyst at the WNG/IMF and the other firm. We are getting there, by fire or force.

CFCfan:

I think the drop in the benchmark was necessitated to have some savings from our crude oil sales. The proceeds ($10) then go into the Excess Crude Account.

That was the whole idea, Nigeria needed to save because nations are gradually seeking alternatives. For instance, U.S. the largest buyer of Nigerian crude has reduced purchase, Nigeria has to export all the way to Asia. With U.S. newe discoveries, news has it that America will drive oil sale to like $50 per barrel in few years... So you see the need to save and diversify.

manny4life:

That was the whole idea, Nigeria needed to save because nations are gradually seeking alternatives. For instance, U.S. the largest buyer of Nigerian crude has reduced purchase, Nigeria has to export all the way to Asia. With U.S. newe discoveries, news has it that America will drive oil sale to like $50 per barrel in few years... So you see the need to save and diversify.

Exactly. The Obama administration is also heavily urging auto manufacturers in the US to mass produce hybrid/electric cars. I predict that in about 4/5 years time, hybrids will be a common sight on American roads, which means that American consumption of petrol (imported) will drop significantly.

manny4life:

Read again,

I stated from where it was about 3years ago or more which means back in 2009/10 figures..

Lol, you think it has increased, you're very funny. U.S. is the LARGEST buyer of Nigerian oil, don't get it twisted, if it was the most sought after, why was the APC abi is it ACN secretary calling for alarm.

If Nigeria wasn't struggling to sell her crude, why did the the benchmark drop from $72 to $62 for next years budget?

Why does Nigeria have to export all the way to Asia to sell her crude? Brother keep up to date with current events because you seem to think Nigerian Crude will continuously sell.

ACN raised the alarm not because of oil per say, but mainly because the elements of growth and sustainability was taking a nose dive. The senate has previously raised alarm that various states are getting to the threshold of instability in the finance and if the government at the centre do nothing, then the economy will begin to fall very rapidly.

You do not need anyone to tell the economy is very fragile when the currency can fluctuate and loose so much within a day.

I am amazed you asked the question why Nigeria has to export her crude to Asia! And you ask me to keep up to date? Have you looked at the last global economic data released? Which region accounted for the biggest spenders? Which region accounted for the biggest growth in economic block? So you really expect Nigeria to place all her eggs in one basket?

Asia is the new economic block where economic growth and working class population is hugely on their side and every serious trading nation is making serious effort to buy into that economic block. Do you know how many times in the last 4 years the major Western leaders have visited those Asia countries? Do you know how many times the British PM, His emissaries and Business barons have visited that region? Dude wake up to reality.

On the Agriculture, I can't quite find the data, but I will post here once I do. You will see the trend when the Agricultural sector began to pick up and how much it has grown by in the last 7years so you will understand where I am coming from.

manny4life:

On the contrary, the Naira isn't weak, it has gained suffiency because

A. Exports are greater than imports now, though we have increase agriculture production

B. According to the newly released report from the CBN, inflation drop to single digit. How does it affect prices of Garri, you won't see it but for someone importing, every Naira on the dollar for say $10,000 is money for him which in turn affects our exchange.

C. Well they told you that it was 11months, for us to earn $2billion in 2months even shocked the analyst at the WNG/IMF and the other firm. We are getting there, by fire or force.

Lol. I hope you won't get banned for the bolded .
Its also remarkable that it was during GEJ's tenure that Nigeria had single digit inflation. All through the OBJ years, inflation never dropped to the single digits. So, kudos to GEJ and his economic management team.

CFCfan: If we have ABSOLUTELY NO control over our foreign reserves, then the CBN/Presidency should save us all the stress in making such announcements.

So you are not aware that we have barely little control over our foreign reserves? Are you really kidding me? I do not want to derail this thread, but I will leave that for another day.