Cbn: Nigeria’s Foreign Reserve May Slip To $18bn, Forecloses Naira Devaluation

BEVERLY HILLS, February 24, (THEWILL) – Going by the projection of the Central Bank of Nigeria (CBN), the Nigeria’s foreign reserve, which stands at $27.66 billion may deplete further to $18 billion this year.

This is as a result of the risks posed to government revenues, from leakages in the oil sector, reduced production, and drop in prices and the dwindling market for Nigerian crude oil.

While responding to the recent calls to further devalue the naira, Adebayo Adelabu, CBN Deputy Governor, Corporate Affairs, and Suleiman Barau, CBN Deputy Governor, Operations, made the call at the defense of the 2015 budget performance and 2016 budget appropriation before the joint Senate and House of Representatives Committee on Banking and Currency.

Adelabu, who noted that global interest rates were expected to remain low in the first half of 2016, expressed confidence that measures taken by major economies to address the downturn in the global economy were likely to improve returns on investments towards the end of the year.

He further explained that 70 percent of the CBN annual budget goes into currency issuance mandate and monetary policy, and other interventions in critical sectors of the economy including agriculture, power, aviation and SMEs, aimed at stabilising the economy.

On his part, Barau, revealed that commercial banks had about N8 trillion balances domiciled with the CBN, stressing the need to organise the real sector reform for banks in the bid to improve lending.

The lawmakers, responding to the presentations of the CBN representatives, queried the utilisation of the N1.062 trillion revenue realized against the N482.167 billion proposed income for the year 2015.

They alleged that the CBN is developing a culture of spend as I earn attitude declaring that it’s operating surplus that should be accrued to Government coffers was about N400 billion.

They also queried the astronomical increase in staff cost from N158.134 billion in 2015 to N408.808 billion as proposed in 2016 budget;

To this end, the Committee demanded for apex bank's financial statement, nominal roll, details of its foreign and domestic investments, among other contentious issues raised at the meeting.

Story by David Oputah