A total of $43 billion in foreign currency flowed through the Central Bank of Nigeria (CBN) as outflows in the whole of 2020, latest data from the apex bank revealed.
>span class=”s3″>Nigeria faced an excruciating foreign currency crisis in 2020 as the fall in oil prices, global lockdown due to COVID-19 and a dearth in capital importation affected Nigeria’s foreign currency balances forcing multiple devaluations during the year and a wide disparity between the official and parallel market exchange rate.
In prior years, the central bank has had to rely on oil dollars, non-oil imports and capital importation to boost the country’s foreign currency balances. However, Daily Sun investigations revealed that all three major sources recorded massive drops as COVID-19 raged on and foreign investors stayed away. For example, foreign currency inflow from oil revenues in 2019 was $15.8 billion compared to $10.5 billion in 2020. Non-oil forex inflows also went from $40.8 billion in 2019 to $29.6 billion in 2020.
But while inflows to the CBN fell in 2020, the bank still had to disburse all it had in foreign currency outflows to other obligations such as sale to BDCs, sales on the I&E window, sale to importers as well as funding other government obligations.
Perhaps in one of the strongest explanations for the exchange rate disparity between the naira and dollar, BDC operators received a total of $5.3 billion in sales from the CBN during the year compared to $13.6 billion in 2019. In 2020, the apex bank suspended the sale of forex to BDCs between the months of April and August.
– The Sun