Following the increase in the nation’s foreign exchange reserves by 8.39 per cent, its highest level in 20 years, in January, financial experts have projected that Nigeria’s foreign reserves will rise to $30 billion by the end of the first quarter of 2017.
The reserves, which dropped to $23.9 billion on October 19, 2016, increased significantly to $28.9 billion as at January, buoyed by the rising oil prices and the stability being witnessed in the Niger Delta region.
Managing Director and Chief Economist, Africa Global Research, Mr. Razia Khan, e x p l a i n e d that the development will help increase investors ’ confidence, as well as boost the possibility of Nigeria’s success, in the planned $1 billion Eurobond issue in March.
“It is not yet clear what is driving it. The Central Bank of Nigeria cash flow data appears to suggest large non-oil related inflows in December. With improved oil output and prices (output looks more hopeful following the success of recent government negotiations with the Niger Delta, while oil prices are benefiting from the recent OPEC agreement), there is no reason why the foreign exchange reserves should not get to $30 billion,” he projected.
A financial expert, Mr. Tobi Aina, also expects the reserves to increase by the end of the first quarter, as he projects that oil prices might soar to about $80 per barrel by then.
“Though, there are considerable backlog of yet-to-be-settled dollar demands, but I am optimistic that such won’t affect the reserve. The CBN had said that rising oil prices in the global market made the inflow of the reserves increased by 82 per cent, and I do not expect the oil price to drop by the end of the quarter,” he said.
