AVAILABLE data from the Central Bank of Nigeria (CBN) has shown that the country’s gross official reserves fell significantly by $717 million, from $33.9 to $33.2 billion, in September 2023.
This development marked a decline compared to the previous month, which saw a modest increase of 2 million to almost $34 billion.
Except for August 2023, the gross official reserves have steadily declined for 12 consecutive months.
This year alone, the reserves have decreased by roughly $ 3.8 billion, resulting in an average monthly decline of $427 million.
The consistent decline in the gross official reserves reflects the heightened demand pressure for forex amidst a severe supply deficit.
Analysts say the government’s loss of money from oil theft and inability to meet the Organisation of Petroleum Exporting Countries (OPEC) quota are major problems affecting dollar supply in Nigeria.
“We have huge demands for dollars now in the economy; the Central Bank of Nigeria must do everything possible to increase the supply side of foreign exchange to meet demands,” a development economist, Chuka Mbonu, said.
On October 12, 2023, the CBN restored the 43 prohibited items prohibited from access to foreign exchange eight years after, a move seen to usher in a single exchange rate while putting pressure on demand for dollars.
Aminu Gwadabe, the national president of the Association of Bureaux De Change Operators of Nigeria (ABCON), said the CBN should emphasize intervention in the retail end sector to where the spike is most pervasive through the efficiency of the BDCs to enable it to close the official and parallel market rates gaps.
To enhance the buffers, the CBN should pursue a paradigm shift from demand measures to supply measures to boost the needed liquidity in the market,” he said.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.