CBN Gives Reason For Depletion Of Foreign Reserves

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(Last Updated On: 2022-11-28)


The Central Bank of Nigeria (CBN) has blamed the number of Nigerian students seeking foreign education for the depletion of the foreign reserves.

A report by Nairametrics says the official foreign exchange received from crude oil sales into Nigeria’s reserves has depleted steadily from over $3 billion monthly in 2014 to zero dollars in 2022, according to CBN governor, Godwin Emefiele.

He stated this at the 57th annual bankers’ dinner organised by the Chattered Institute of Bankers of Nigeria (CIBN) in Lagos on Saturday, November 26, 2022.

The CBN boss noted that the Nigerian foreign exchange market is in the middle of a severe crisis, putting pressure on the reserves and suppressing the value of the naira.

BusinessDay report said that market demands for goods and services have continued to soar under different uses amid falling foreign exchange supply.

The apex bank helmsman noted that the number of student visas given to Nigerians by the United Kingdom has spiked from a yearly average of about 8,000 visas in 2020 to almost 66,000 in 2022, implying an eight-fold increase amounting to $2.5 billion yearly in study-related forex outflow to the UK alone.

Due to this and the need to increase forex earnings, the CBN and the Bankers’ Committee started the RT200 scheme in February 2022, Emefiele said.

He said that the scheme was primarily designed to handle the problem of repatriation of non-oil export proceeds creatively. Emefiele noted that inflows via the programme in 2022 increased to about $1.6 billion and could surpass $2.5 billion by the end of this year.

He said: “Under the rebate scheme of the programme, the Bank has reimbursed a total of N78.4 billion naira, which I consider a fair price to incur to stabilise our foreign exchange market.”

Before the introduction of the RT200, the CBN embarked on several initiatives to encourage forex inflow into Nigeria. The Naira-4-Dollar initiative, reflecting the CBN’s efforts to increase migrants’ remittances into the country, was one such initiative.

Emefiele said: “I am happy to note that, so far, the Naira-for-Dollar scheme has been successful in increasing remittance inflows through our registered International Money Transfer Organizations (IMTOs).”

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