Despite the volatility of the foreign exchange market due to decline in crude oil export earnings, Nigeria external reserves has increased sharply by almost $1 billion within 9 days, rising from the $34.78 billion that it recorded on May 12, 2020, to about $35.77 billion that it ended with on May 21, 2020.
Also,Nigeria has received $5.85 billion capital importation (inflows) in the first quarter (Q1) of 2020, compared to $8.51 billion in Q1 2019.
According to the NBS,Nigeria received $5.85 billion capital importation (inflows) represents an increase of 53.97% when compared to how much was received in Q4 2019.
In the first quarter of 2020, the largest amount of capital importation was received through portfolio investment, which accounted for 73.61% ($4.31 billion) of the total capital importation.
Available data from the Central Bank of Nigeria (CBN) show that the country’s external reserve had risen to about $35.77 billion as of May 21, 2020.
Before now, Nigeria’s external reserves went on a downward slide last year, after hitting a peak of $45.17 billion on June 11, 2019, thereby losing $11.75 billion within a space of 10 months.
Under the portfolio category, investment in money market instruments remains the largest recipient of capital inflows with a total of $3.44 billion, followed by $639.72 million in equity, while investment in bonds stood at $231.22 million.
Foreign Direct Investment (FDI): FDI constituted only 3.66% ($214.25 million) to the total capital inflows. A decline of 16.72% compared to $257.25 million received in Q4 2019 and 13.39% reduction compared to the corresponding quarter of 2019.
According to NBS, other investments, which was broken down into four categories contributed 22.73% ($1.33 billion) to the total capital importation in the first quarter of 2020. The inflows through other investments reduced by 19.92% when compared to $1.66 billion received in Q4 2019.
Investment through trade credits in the first quarter of 2020 was $50,000, Loans ($559.79 million), Currency deposits ($820,000) while other claims scooped the highest share of $769.99 million.
The banking sector received the largest portion of capital importation as it constituted 51.08% ($2.99 billion) to the total capital inflows, followed by Financing, which received $1.33 billion (22.77%) in Q1 2020.
Shares followed with $817.38 billion (13.96%), Production $273.97 billion (4.68%) while Telecoms received $157.48 billion (2.69%).
Meanwhile, Governor Emefiele had promised more liquidity in the forex market, assuring that all genuine dollar demands by businesses and individuals will be met.