Nigeria’s N46bn Reserves 2nd Highest In Africa –CBN

The sun reports; ABUJA Central Bank of Nigeria (CBN) yesterday insisted that Nigeria’s $46 billion in reserve is second highest in Africa after Algeria and can finance 11 months imports. Speaking with newsmen at the opening of the Regional Course on Optimising Reserves and Foreign Exchange Mangement for Income Generation, organised by West African Institute for Financial and Economic Management (WAIFEM), in Abuja, the Deputy Governor of CBN, Operations, Mr. Tunde Lemo, deposed that at $46 billion, the reserve level is very strong and that other fundamentals of Nigerian economy are very strong.

However, he said occasionally, the reserves could fluctuate between $45 billion and $47 billion which does not mean that it is weak.

“Our reserve level is about $46 billion. That is still very strong. That is approximately 11 months of imports. The fundamentals of Nigerian economy are very strong. Occasionally, there may be increase or decrease, between $45 billion and $47 billion and that is very strong. I think it is second only to Algeria and that is really very remarkable,” he insisted.

In his keynote address on the occasion, CBN Governor, Mallam Sanusi Lamido Sanusi, called on participants at the course largely from central banks of Ghana, Gambia, Sierra Leone and Nigeria, to introduce initiatives that will mitigate risks and increase returns on the countries’ foreign portfolios through diversification into different asset classes.

“In other to optimise returns from external reserves, central banks need to introduce initiatives that will mitigate risks and increase returns on the countries’ foreign portfolios. This could be achieved through diversification into different asset classes, central and geographical locations. This, therefore, calls for skills enhancement and capacity building in reserve management,” he said.

Sanusi, who spoke through Lemo, expressed worry over the challenge among the central banks on how to generate income from foreign exchange reserves without compromising the reserve management objectives of safety and liquidity. According to him, liquidity and safety are very important as they come far before returns for reserve management.

“The dilemma now is that whereas before the global financial crisis, a lot of countries had depended on the returns from reserves and so many of them have actually earmarked several programmes to be financed through income generated by reserves.