Nigeria’s external reserves have surged to a one-year high of $35.05 billion during President Bola Ahmed Tinubu’s administration, according to the Central Bank of Nigeria.
This marks the highest level since May 30, 2023, before the naira unification in June 2023. However, the unification of the Naira in June led to a slight dip in the reserves. As of Monday, July 8, 2024, the external reserves have once again reached the $35.05 billion mark, representing a substantial increase from the $34.66 billion recorded on July 4, 2024. This surge in reserves is a testament to the government’s efforts to stabilize the economy and boost investor confidence.
Naira Continues to Struggle
Despite this increase, the naira continued to depreciate against the dollar, reaching N1561 per dollar on Wednesday, exacerbating Nigeria’s ongoing foreign exchange challenges. The Naira slumped further to N1561.98 per dollar on Wednesday, July 10, 2024, from the previous day’s rate of N1532.58.This persistent depreciation of the Naira has exacerbated Nigeria’s foreign exchange crisis, leaving many citizens and businesses grappling with the consequences. The high demand for foreign currency, coupled with limited supply, has contributed to the Naira’s downward spiral.
Challenges Ahead
The rise in external reserves is a positive development, but it remains to be seen whether it will be enough to address the country’s foreign exchange challenges. The government will need to implement comprehensive policies and strategies to stabilize the Naira and ensure a steady supply of foreign currency to meet the demands of the market. President Tinubu and his administration face a daunting task in navigating these economic challenges and restoring confidence in the Nigerian economy.