E-Financial
Foreign Reserves Drop to $43Bn
Nigeria’s foreign reserves have dropped to $43.7billion, one week after falling to $43.9 billion, according to the latest figures from the Central Bank of Nigeria.
The Punch reported that on December 17, the reserves fell to a one-year low of $44.1 billion.
The reserves may likely close the year on the $43 billion mark, financial analysts have said.
Contrary to the Federal Government’s plan to raise the country’s external reserves to $50 billion by the end of 2012, they closed at $44.26 billion.
It appears the reserves will be closing 2013 at about $6 billion below the Federal Government’s target of $50 billion for last year.
According to The Punch, the amount in the foreign reserves as of January 2, 2013 was $44.33 billion. It started rising through the year and peaked at $48.8 billion on April 30.
From May, however, the reserves started falling gradually. Between May 2 and August 5, 2013, the balance in the account had fallen by $1.8 billion to $46.98bn from the peak of $48.85 billion.
Some analysts are of the opinion that the amount the CBN has been offering for sale at the Wholesale Dutch Auction System is fast depleting the external reserves.
The central bank had defended the naira with $18.7 billion at the WDAS between April and November 4 in a bid to save the currency.
It offered $18.7 billion to currency dealers in 59 auctions in the seven-month period. However, the CBN on October 2 replaced the WDAS with the Retail Dutch Auction System because of the ineffectiveness of the former in order to address hitches in the foreign exchange market.
Notwithstanding this move, observers said the CBN had, some months back, resumed direct intervention by selling dollar to end-users in the market.
The regulator took the decision in order not to devalue the naira, operators said.
According to analysts, the performance of the reserves is driven mainly by proceeds from crude oil, gas exports and crude oil-related taxes as well as reduced funding of the Dutch Auction System on the account of huge inflow of foreign portfolio investments.
Dr. Ngozi Okonjo-Iweala, minister of Finance, , had predicted a $12billion revenue shortfall for the country this year.
A few months ago, however, the CBN dismissed claims that the reserves were experiencing a sharp decline.
Mr. Lamido Sanusi, CBN governor, had said in spite of the uncertainties in the global economy, which had made major economies to cut interest rates in order to provide market liquidity, Nigeria’s external reserves would be invested in a currency mix that would optimise returns for the country.
He also allayed fears about the uncertainties in the Nigerian economy and stressed that the reserves could finance about 11 months of importation.
But Okonjo-Iweala stressed the need for the country to shore up the external reserves.
Sanusi had in May said the outlook for the country’s foreign reserves this year was mixed
The naira appreciated to N1,600 per dollar in the parallel market at the close of trading hours on Monday, strengthening from N1,610 per dollar recorded over the weekend.
Similarly, the naira saw a slight gain in the Nigerian Foreign Exchange Market (NFEM), trading at N1,605 per dollar compared to N1,606 last Friday, according to data from the Central Bank of Nigeria (CBN). This represents a marginal N1 appreciation.
As a result, the gap between the parallel market and official exchange rate widened slightly to N5 per dollar, up from N4 over the weekend.
Central Bank of Nigeria (CBN) spent N315.18bn on currency issue expenses in 2024, marking a sharp increase of 306 per cent compared to N77.67bn recorded in 2023, the apex bank’s audited financial statement for the year has shown.
Currency issue expenses cover the printing, processing, distribution, and disposal of banknotes.
The latest figures reveal that the CBN’s cost of managing physical cash spiralled dramatically during the year under review, as Nigeria grappled with lingering cash shortages and disruptions in the money supply chain.
The surge in expenditure came as the country continued to deal with the effects of the naira redesign policy introduced in late 2022.
Despite efforts to stabilise cash circulation throughout 2023, Nigerians still faced queues at ATMs and difficulties in accessing cash in early and late 2024.
Faced with mounting public outcry, the CBN deployed several emergency measures to address the crisis.
Deposit Money Banks were directed to ensure consistent ATM loading and rural cash distribution, while the Bank also launched public hotlines for citizens to report cash scarcity incidents.
Also, the CBN ramped up enforcement efforts, including deploying monitoring teams, issuing sanctions against non-compliant banks, and mandating improved cash distribution.
PalmPay, a full-service digital bank, has reaffirmed its dedication to advancing the future of payments in Nigeria by promoting the widespread adoption of contactless-enabled payment terminals.
This was made known during the recently concluded BusinessDay Future of Payment Conference, themed “Fintech Evolution: Gateway to Payments.” In his welcome address, BusinessDay Publisher, Frank Aigbogun, emphasized that the next phase of fintech innovation must be driven not only by speed, safety, and simplicity but also by trust, inclusion, and accessibility to ensure broad-based impact across all segments of society.
Talking about PalmPay’s impact in the panel session titled “The Next Wave of Digital Payments: Trends and Innovation,” Ifeanyi Uzoka, Senior Business Development Manager at PalmPay, discussed the evolving landscape of digital payments in Nigeria.
He noted that while regulatory frameworks have supported the introduction of contactless payments, the high level of cash dependency remains a key barrier to widespread adoption.
“At PalmPay, financial inclusion is central to everything we do,” Uzoka stated. “To support this mission, we’ve launched contactless-enabled debit and premium cards, ensuring our users have access to convenient and secure payment experiences. We also understand that trust is critical, which is why all contactless transactions on PalmPay’s platform include an additional layer of authentication for enhanced security.”
PalmPay continues to lead innovation in Nigeria’s digital finance ecosystem by delivering secure, user-friendly, and future-ready solutions. The company’s recently launched debit and premium cards in partnership with Verve are now serving its growing base of over 35 million users nationwide.
This move into contactless payments underscores PalmPay’s alignment with global payment trends and its ongoing commitment to building a more inclusive and digitally empowered economy.
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