*The Politics Exploited On The Foreign Reserve Debate And What You Must Know*

Jonathan was lambasted for "depleting the foreign reserves during his time as President, when in the true sense of it certain factors were the reasons why it happened that way. Take for instance, In 13 days $1bn wiped off our reserve. In one month (September, 2018 under Buhari), $1bn was wiped off our reserve. Since July 2018 about $5bn wiped off our reserve. Does it mean they are stealing it as the reserve is declining? That was the narrative when it happened in previous administrations under Jonathan. That is why it is important to be factual irrespective of what happens because it may come back to haunt you. Of course i don't intend to play politics with the foreign reserves debate in this case just want to state the obvious. The truth is, the CBN advised that the reserves are being used to defend the naira cos of rising interest rates in the US..next option is devaluation. This was exactly what Jonathan did with our reserves and the APC lying liars went ballistic claiming he was stealing from the reserves when in all clear terms this was not the fact.

In addition Fixed Income maturities between now and the end of December 2018 is around $7.5bn. Between now and February 2019, we estimate 11- 12bn dollars of maturities. Reserves are currently at about $43bn dollars. If we assume no inflow and 100 percent outflow , the reserves will be sitting at $31bn dollars by February 2019, meaning we have not really moved past what Jonathan left us in our foreign reserve in 2015. This is the more reason why FGN want to raise $2.9bn before the year runs out in order to maintain the current status of the reserve to avoid further depletion now this is where it becomes dangerous because mounting debt profile is a snag on our foreign reserves in this case as they (borrowed funds under this Buhari's govt) are not fully utilized to benefit or grow the economy. Reserves in any Nation, are used to defend your currency, used to settle foreign debts, used for international trade so in terms of prosperity when people import a lot it could decline etc but mostly what made their reserves to grow is the foreign debt they have been accumulating not that they are doing something special to build the reserve.

This made all sense that even a layman can pick the facts in the knotty way of explaining how foreign reserves are built and spent with the impacts they wield on an economy if well utilized! Foreign reserves in any economy are grown as a cushion effect in times of financial crises to ‘defend the local currency of that particular economy’. In the case of Buhari, he met about $30 billion in reserves in May 2015, this simply means he’s never really added to the reserves if we factor in foreign debts.

The question should be why did Jonathan have a reversal in foreign reserves when the previous regimes that bequeathed the huge reserves to him did not earn as much petrodollar as he did?

And he still went ahead to increase our debts.

So he couldn't grow the reserves, he ran it low, ran down government savings he inherited, and increased debt tremendously.

What exactly was he good for but to Balkanize the country and bankrupt the economy, as the blessed ATM?


And just 7months after the oil price fell from $100+/barrel to $50+/barrel, his regime was already borrowing to the tune of N470b ($2.5b) just to pay civil servant salaries for Feb/March/April 2015.

What would have been the state of the Nigerian economy when crude oil finally slumped to as low as $27/barrel in 2016, if Jonathan had continued in power?

By now, the debts would have piled up some more, while the foreign reserves that he ran down at a time of high revenue, would certainly have been reduced to nought.

FFK did not call him clueless for nothing. And I reckon the Economist that termed him an Ineffectual Buffoon, must have heard his remarks about America knowing if billions of dollars that ought to accrue to Nigeria did not accrue to Nigeria's purse, because dollars is American money, so America will know.