FAAC disburses N725.57bn to FG, states, LGAs as March allocation
Zainab Ahmed, Finance minister

Nigeria’s external reserves have risen to $42 billion, a 25-month high on the back inflow of the recent Eurobond issued by the federal government.

Although, the Central Bank of Nigeria’s (CBN) latest update on its website showed that as of October 7, 2021, the Eurobond had grown by $3.587 billion or 10 per cent, from $34.597 billion as of September 7, 2021 to $38.184 billion as of October 7, central bank sources put the present value at $42 billion, ThisDay reported.

The last time the country’s external reserves were around their present value was on September 26, 2019, when it was $42.05 billion.

The sharp rise in the foreign reserves was as a result of the $4 billion Eurobond the federal government issued last month. The amount was raised after an intensive two days of virtual meetings with investors across the globe. The Debt Management Office (DMO) had explained that the Order Book peaked at $12.2 billion, which enabled the Federal Government of Nigeria (FGN) to raise $1 billion more than the $3 billion it initially announced.

DMO said, “This exceptional performance has been described as, ‘one of the biggest financial trades to come out of Africa in 2021’ and ‘an excellent outcome.’”

According to the DMO, bids for the Eurobonds were received from investors in Europe and America, as well as Asia. There was also good participation by local investors.

According to the statement, the size of the Order Book and the quality of investors demonstrate confidence in Nigeria.

Analysts also revealed that forex rationing by the central bank has also supported the external reserves accretion.

Meanwhile, the value of transactions through the various payment channels in the country rose by 6.08 per cent, to N26.5 trillion in September, up from N25 trillion in August.

Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, disclosed this in a report on his monthly executive breakfast session presented at the Lagos Business School at the weekend.

The payment transactions covered in the report included cheques, point of sale terminals, Nigerian Interbank Settlement System Instant Payment (NIP), and Nigeria Electronic Fund Transfer (NEFT).

It pointed out that even though Nigeria’s external reserves have risen, the country’s debt level has also been climbing. Nigeria’s total external debt has now risen above $37 billion. This was up by 270 per cent from 2015 level of $10 billion, the report stated.

According to the report, domestic oil production declined consistently for four months. Precisely, it fell by 8.63 per cent to 1.27mbpd in August. This was attributed to underinvestment in the oil sector and high attrition rate.

The rig count has jumped 57.4 per cent since the Petroleum Industry Act (PIA) was enacted.

“Royal Dutch Shell has put its land and swamp assets on the block; most international oil companies are shifting to green energy; and higher oil prices, 31.3 per cent in six months is making upstream loans qualify for restructuring,” it stated.

It noted that the economy was recovering, but the momentum was slower than expected.

“Oil prices now at a seven-year high ($82.87pb) but economy not firing on all cylinders,” it added.

The World Bank recently raised Nigeria’s 2021 growth forecast to 2.4 per cent, from 1.8 per cent previously. This was supported by accelerated growth in the service sectors. ThisDay

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