Govt Must Tackle Oil Theft To Stabilise Forex Rate, Reserves – Emefiele Reveals

For Nigeria’s foreign reserves to rise and stabilise forex rate, the Federal Government must conclusively address the persistent challenge of oil theft, Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said.

According to Emefiele, the major solution to the instability in exchange rate and depleting foreign reserves, is increase in crude oil receipts which he said currently stands at zero based on monthly remittance records  to the Federation Account.

Emefiele advised that the Federal Government should curb oil theft to enable the foreign reserves rise. He said this will stabilise the exchange rate, as revenue from exported crude oil would  rise as well. 

“If the current problem of oil theft is promptly corrected, we could expect a resumed inflow of crude oil receipts into the official reserves. This could foster gross stability in the foreign exchange market and enhance exchange rate stability,” Emefiele said. 

He made this known during the 57th annual bankers’ dinner organized by the Chartered Institute of bankers of Nigeria (CIBN) in Lagos. 

Prime Business Africa had reported that the contribution of crude oil to the foreign reserves had dropped to zero dollar froma monthly  $3 billion in 2014. 

Recall that Emefiele had also revealed that the foreign reserves was being depleted due to the hike in the number of Nigerians seeking foreign education. 

According to the CBN governor, in 2020, about 8,000 visas were issued to Nigerians, but the figure increases to 66,000 in 2022, “The number of student visas issued to Nigerians by the United Kingdom alone has increased from an annual average of about 8,000 visas as of 2020 to nearly 66,000 in 2022, which implies an eight-fold surge to about $2.5 billion annually in study-related foreign exchange outflow to the UK alone. 

 “It is against the backdrop of the worsening mismatch between foreign exchange market demand and supply, and the need to boost foreign exchange earnings that the CBN and the Bankers’ Committee initiated the RT200 programme in February 2022,” Emefiele explained. 

Meanwhile, on the forex rate,  Prime Business Africa had reported that the naira appreciated against the dollar on Monday in the official and Black market. The dollar rate was placed at N444.70/$1 in the official market and N773 per dollar in the parallel market.