New Telegraph

Expert bemoans sustained depletion of external reserves

The continuous fall of Nigeria’s external reserves is detrimental to the economic growth and general development of the country, a Professor, formerly with the Faculty of Social Sciences of the University of Ilorin, Kwara State; Prof. Jacob Folorunsho Olorunfemi, has said. In an interview with New Telegraph over the weekend, he noted that Nigeria’s external reserves fell from $37 billion in January 2023, to $36.6 billion as of March 7, 2023, which is a decline of 1.1% over the first two months of the year, according to data from the Central Bank of Nigeria (CBN).

He added that the decrease was the lowest level in a year. He said that the decline wss even more worrisome when compared to the same period in 2022 when external reserves were $39.5 billion at the end of the first quarter of 2022, having opened the year at $40.5 billion. He lamented the continued fall of the external reserves as he noted that the external reserves stood at $40.52 billion as of the end of December 31, 2021, but declined to $37.09 billion as of December 29, 2022, and $37.01 billion at the end of January 30, 2023. He attributed the fall to Nigeria’s withdrawal from the fund without remitting more and poor production. Olorunfemi said: “The decline of the external reserves is inimical to Nigeria’s economic growth especially since we are import dependent. That is a fundamental issue that we should address.

“There is no way the external reserves will not be depleted. External reserves are like savings. If an individual has his savings in the bank, and for one reason or the other, he has not been adding to that amount but keeps on withdrawing from it, the natural thing is that it will be going down. “That is exactly what is happening in the case of Nigeria. We have not been producing to generate enough to have more external. It is dangerous. Unfortunately, we have gone further to what is generally referred to as ‘Ways and Means’, which is like printing money, asking the CBN to loan money to the government in anticipation that in the future, it will get its money paid. And we are not in that direction of repayment. It is very unfortunate. “Decline external reserves is detrimental to national development. Unfortunately, we are not even in the direction of recovery.

The government is not giving hope. The economy would have bounced back after the lockdown of COVID-19, if we were a serious country. Can you imagine closing almost everything now, asking students to go on unplanned holidays for two weeks initially which has not been extended to three weeks because of elections?” He urged Nigerians to be more productive and avoid wasteful spending or profligacy. He called for the stabilisation of the educational sector, the provision of a good environment that will be enabling for lecturers to optimise their potential, which he noted, will discourage brain drain. He said that when Nigeria’s tertiary educational system becomes qualitative, efficient and devoid of disruptions of the academic calendar, Nigerian children would stop going abroad for education. According to him, this will stop capital flight and depletion of the nation’s foreign exchange in the name of overseas tuition, and will shore up the external reserves as also students from abroad will school in Nigeria. He said: “Nigerians should be working 24 hours a week for economic recovery but public holidays are regularly declared as if we do not have anything to do. We keep on behaving as if all is right for us to keep on being in a celebration mood. “But it can not continue because the money we are spending is not the money we have worked hard to get. It is a sort of natural resource or endowment, a God-given endowment. We are depending on petroleum resources. “Unfortunately, even at that, for a long, we did not know how much we were producing. If we had worked hard for our money, we would not have been spending it the way we have been. “Nigeria is a big market and has great potential for production. We should produce what we need or what we consume. I believe in the mantra that we should change from consumption to production. Cocoa is produced in my compound without my taking special effort on it. There is no time of the year that it does not produce fruit. Rather than encouraging people to go to the farm, they are making people lazy by giving them trademoni, whereas they should teach them how to catch fish instead of giving them fish. You need to teach them how to fish and if they need more, they can come back. That should be the way to go. “How can I produce yam If I do not know how to turn it into pounded yam, then I should stop eating pounded yam until I am able to produce it.” He said that the depletion of the foreign reserves was even more painful considering that Nigeria has abundant untapped mineral resources which if harnessed could earn the country more foreign exchange, boost its external reserves, create more jobs and engender economic development.

Read Previous

OML 18: Why we replaced Eroton – NNPCL

Read Next

Need for downstream sector automation

Leave a Reply

Your email address will not be published. Required fields are marked *