External reserves drop to $47bn.

The nation's external reserves have dropped to $
47bn, after being stagnant at $48bn for over
three months.
Data obtained from the Central Bank of Nigeria's
website on Wednesday showed that the reserves
dropped to $47.6bn on Tuesday.
The reserves, which hit the $48bn mark on March
11, 2013, had since then remained stagnant
within the mark.
Specifically, the latest CBN data showed that the
reserves dropped from $48.0bn on June 28,
2013, to $47.6bn on July 2, 2013.
The $47.7bn reserves represent about 30.5 per
cent increase over the $36.6bn recorded on July
2, 2012.
The nation's external reserves had risen steadily
since last year due to high oil prices and stability
in the foreign exchange market.
It was gathered that the performance of the
reserves was driven mainly by proceeds from
crude oil, gas exports and crude oil-related taxes
as well as reduced funding of the Wholesale
Dutch Auction System on the account of huge
inflow of foreign portfolio investments.
The Federal Government had targeted $50bn
mark by the end of 2012.
The reserves however closed the year at $
44.26bn on December 24, 2012, finishing $6bn
below the government's target.
The Governor, Central Bank of Nigeria, Mr. Lamido
Sanusi, said in May 2013 that the outlook for the
country's foreign reserves this year was mixed.
Sanusi told Bloomberg that the foreign-currency
reserves would probably keep expanding while
facing risks from lower-than- projected oil output
and falling prices.
He said, "Quantitative easing by central banks in
the United States, the United Kingdom and Japan
all point to a likelihood of strong capital flows to
emerging and frontier markets that may benefit
Nigeria. Still, the combination of lower global oil
prices and weak output performance in Nigeria
may lead to a slowdown."
Oil production in Nigeria fell to 1.81 million barrels
a day in March, the lowest level since September
2009.
According to the CBN, Nigeria relies on crude
exports for about 80 per cent of government
revenue and more than 90 per cent of foreign
income.
Sanusi said, "We always said that the budget
based on projections of about 2.5 million barrels
per day was founded on overly optimistic and
unrealistic assumptions."
The National Bureau of Statistics had earlier said
the country's external reserves would experience
less pressure this year due to a reduction for the
demand for foreign exchange to settle high
import bills.
The bureau said in a report released in Abuja that
the projected increase in the value of total
merchandise trade was expected to generate
higher external reserves through exports.
This, it hoped, would lead to a higher increase in
the supply of foreign exchange than the demand.
The NBS report stated, "The recent declines in
imports are expected to carry on till the third
quarter of 2013.
"Beyond this point, the growth rate in imports is
expected to yield positive year-on-year changes.
By the fourth quarter of 2013, growth in the
value of total merchandise trade will be driven by
both higher imports (relative to fourth quarter
2012) as well as oil and non-oil exports."
Minister of Finance, Dr. Ngozi Okonjo-Iweala, had
stressed the need for the country to shore up its
external reserves.
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