TheCable

The Central Bank of Nigeria (CBN) has recorded fresh rise of foreign reserves for four days consecutively – for only the second time since President Muhammadu Buhari took office.

As at March 22, 2016, the foreign reserves had experienced a rise of $34.7 million in four days, rising from $27,853,597,008 on March 16 to $27,888,285,805 by March 21.

By February 22, the reserves had a rise of $13 million while finding its way out of 11-year low positions.

The first consecutive rise started on Thursday February 24, from $27.804 billion to $27.823 billion as at February 29, surging gradually through the days in-between.

The rise has been attributed to a gradual recovery in oil prices and strict restrictions of capital flow.

After rising by $350 million in August 2015, the foreign reserves have not experienced any of such huge leaps in 6 months, with a meagre rise of $32 million in February 2016.

Major restrictions have been put in place to curb excessive outflow of Nigeria’s foreign exchange, following fears that the reserves may be down to zero in 10 months.

Speaking at TheCable devaluation debate, Adams Oshiomhole, governor of Edo state, had said the nation’s forex outflows vastly outweighed inflow.

“As we speak, I understand that our forex inflow is under $1 billion,” he had said.

“If you’re earning less than one billion, and your outflow remains at more than $4 billion, obviously, all other things being equal, I imagine that in one year, our foreign reserves would be zero.”

The position of the CBN and the federal government on forex has been fiercely criticized by many, who consider capital control as counter-productive.

However, the recent rise of reserves and the passage of the 2016 budget may well vindicate the CBN and the Muhammadu Buhari-led federal government.