The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has said the country now records about $2.35 billion as net inflow into the Central Bank foreign reserves.
Edun made this statement while speaking at the Access Bank annual cooperate forum of 2024 in Lagos.
The Minister said the increase in foreign reserves has contributed significantly to the stability of the naira in the foreign exchange market.
According to him, this uptick has been the case for the past seven months of the year 2024.
“We have relative currency stability. And of course, the all-important margin of the rates. We’ve seen a gradual elimination of multiple exchange rates.
“We also have foreign exchange liquidity. The gross reserves are up. There has been a net inflow in the first seven months of this year of about $2.35 billion every month.
“On the fiscal side as well, government revenues are growing and the key to government revenue is not so much that government has revenue to compete with the private sector.
“It’s the fundamentals, the social and the key infrastructure spending. The social safety net spending. And historically, our figures are low. Our tax-to-GDP ratio is as low as 10%. Our revenue to GDP is also around 15%,” Edun said.
Export Diversification
Furthermore, the Minister also reiterated that the government is working to ramp up crude oil production as a buffer for the fiscal revenues of the country.
According to him, the country is on track to produce the targeted 2 million crude oil barrels per day (bpd) before the end of 2024.
In addition, he said the government is implementing policies to diversify its exports, particularly in the service sector.
“There is a commitment to ramp up oil production to 2 million bpd before the end of the year.
“In addition, our exports need to be significantly diversified and an important area we need to look at is the services. We have the demographics as well as the relatively skilled population which means we can export our services,” Edun added.
What you should know
- According to the Central Bank of Nigeria, the foreign reserve of the country has risen significantly in the past months following the rise in interest rate and the devaluation of the naira, which incentivize investors to see the country as a favourable market for foreign portfolio investments.
- Accordingly, recent reports show that the country’s foreign reserves have soared to a historical $34.66 billion as of June 2024.
- In addition, CBN reported that the remittances inflows surged by 130% to $553 million as of July 2024, signifying a huge increase in inflow of foreign exchange into the country as well as a guarantee for a stable local currency.