External Reserves Hit New Low at $44.84b

Governor of the Central Bank of Nigeria (CBN), Lamido Sanusi.

This is not the best of times for the Nigerian treasury. The Presidency and the National Assembly continue to bicker on the appropriate oil bench for the 2014 budget, the nation’s external reserves dropped further to $44.847 billion.

According to the latest data of the Central Bank of Nigeria (CBN) on its website on Tuesday, at the end as at November 18, 2013, the lowest level in 11 months.

On December 10, 2012, according to the CBN, Nigeria’s external reserves closed at $44.583 billion.

Between October 31 and November 18, data revealed, the nation’s reserves level has declined by $381.741 million or 0.84 per cent from the $45.229 billion it stood at the end of last month. Since then, the figure has dropped consistently.

This year, the reserves level has so far peaked at $48.857 billion, a level it attained on May 3, 2013. Between that date and November 18, the nation’s reserves have fallen by $4.009 billion or 8.2 per cent.

Speaking at the post-Monetary Policy Committee briefing on Tuesday, CBN Governor, Lamido Sanusi, noted that the reserves level would have been worse hit, but for the “massive inflow in portfolio funds.”

The implication of this, he continued, “is that financial markets are extremely fragile and susceptible to external shocks. Clearly, the major risk on the fiscal side at present is not one of escalation of spending but loss of revenue from oil exports.”

There has been altercations around the management of the Excess Crude Account, into which the difference between the crude oil benchmark oil price used in computing the annual budget and the actual market price is paid. Governor Rotimi Amaechi of Rivers State, who is also chairman of the Nigerian Governor’s Forum, had at the weekend in Sokoto, accused Abuja of unilaterally withdrawing $5 billion from the account between January and October.

Reacting on Monday, the Finance Ministry, said in a statement that the allegation as quoted in recent media reports is absolutely shocking and false.

According to the statement, “Governor Amaechi cannot credibly deny knowledge of the status of the ECA. He has been closely involved and actively participated in making requests to the Presidency for the ECA to be shared for the purpose of augmenting the regular allocations from the Federation Account whenever there is a shortfall.

“The $5 billion in the ECA which Governor Amaechi referred to in his statement has been shared to the three tiers of government to make up for the revenue shortfalls during the Federation Accounts Allocation Committee process. Part of this fund also went for SURE-P payments and the balance for subsidy payments to oil marketers.”

To prove its point, the Ministry said Governor Amaechi’s State got N56.2 billion, the second highest share among the states, for January to September 2013 from the Excess Crude Account. This amount includes N43 billion for shortfalls plus N12 billion released for SURE-P.

“In fact, earlier this month (November 2013), Rivers State, along with other states, benefitted from the sharing of $1 billion from the ECA to augment the allocations.