The nation’s foreign reserves rose by $2.7bn in May after declining for several months, figures from the Central Bank of Nigeria showed on Tuesday.
According to the CBN, the foreign reserves, which stood at $33.52bn as of April 30, 2020, rose to $36.59bn as of May 29, 2020.
The reserves had plunged to a record low after hitting a high of $45.17bn on June 11, 2019, losing over $11bn in almost 11 months.
The international oil price benchmark, Brent crude, which rose to as high as $70 per barrel in January, slumped to as low as $15.98 per barrel in April.
According to the International Monetary Fund, Nigeria’s main export commodity is crude oil, which represents around 90 per cent of its exports.
“The country’s oil exports are expected to fall by more than $26bn,” the IMF said in May.
The CBN Governor, Mr Godwin Emefiele, during the last Monetary Policy Committee meeting, said there was an improvement in crude oil price, which stood at about $34.8 per barrel as of May 28, 2020.
“The moderate recovery in crude oil prices would reduce the pressure on the external reserves and government revenue,” he said.
Emefiele reiterated the need for the government to urgently reduce its reliance on oil revenue by gradually diversifying the economy and improving tax collection.
He said headwinds to growth remained the legacy issues of the persistent infrastructural and security challenges.
He said, “Central to the committee’s considerations were the impact of the COVID-19 pandemic, the oil price shock and the likely short- to medium-term consequences on the Nigerian economy.”
“In particular, the committee acknowledged the gradual improvement in macroeconomic variables particularly the improvement in the equities market, the containment measures of the COVID-19 induced health crisis, as well as, the impact of the increase in crude oil price on the external reserves.”