The Nigerian economy attracted a total forex inflow of $114.82bn within a two-year period covering January 2018 and December 2019.
The figure was arrived at based on analysis of the forex inflow and outflow through the economy as contained in the economic report of the Central Bank of Nigeria.
The main sources of Nigeria’s forex inflow are crude oil sales and receipts from non-oil sources. The rate of foreign exchange inflows has significant impact on the country’s foreign exchange reserves which are used to back liabilities and influence monetary policy.
In recent times, the nation’s external reserves have been on a decline owing to the drop in oil receipts and the intervention of the CBN in the foreign exchange market.
An analysis of the report showed that while about $56.76bn foreign exchange came into the country in 2018, the balance of $58.06 was received in the 2019 fiscal period.
A breakdown of the $56.76bn for 2018 showed that $14.19bn was received through the CBN in the first quarter, while the second, third and fourth quarter recorded $13.81bn, $12.95bn and $15.81bn respectively.
For the 2019 fiscal period, the foreign exchange receipts of $58.06bn was earned thus; $18.38 in the first quarter, $13.83bn in the second quarter, $12.53bn in the third quarter and $13.29bn in the fourth quarter.
Speaking on forex inflow, experts said there was a need for an exchange rate regime that would guarantee investment inflows to various sectors while building the country’s external reserves.
Like every other country, they said Nigeria needs strong foreign reserves to meet international payment obligations, boost the country’s credit worthiness, provide a buffer against external shocks as well as maintain a stable exchange rate.
A developmental economist, Odilim Enwagbara, said the multiple exchange rates should be stopped to check the issue of round tripping.
He said, “The CBN should shut all multiple foreign exchange windows because if Nigeria wants to be a modern economy, then this thing must stop.
“What we need to do is to allow people to bring in forex and take them away unrestricted. If you allow that, more forex will enter the country than leaving the country.
“When you restrict access to forex for importation of certain products, they go to the black market to access forex and we know that these people from black market get forex from the cheapest windows and this causes problems in the forex market.”
The Registrar Institute of Finance and Control of Nigeria, Godwin Eohoi, said while a complete currency float was capable of unifying rates and reducing round tripping and speculative activities, toeing such a path would be suicidal for an import-dependent economy that depended on a single commodity for much of its forex inflows.
He said, “To improve the value of the Naira, well-coordinated fiscal policies should be deployed to pursue import substitution and enhance the competitiveness of local production with a view to curtailing forex demand.
“On the supply side, the government should fast track efforts to improve the ease of doing business and the state of infrastructure in order to attract foreign investments as well as develop multiple streams of earning foreign exchange.
“In my view, it is only when forex inflow is guaranteed from diversified sources that the issue of market-determined value of the Naira can be tabled for consideration.”
The CBN Governor, Mr Godwin Emefiele, had said the apex bank would continue to operate a managed float exchange rate regime in order to reduce the impact which continuous volatility in the exchange rate could have on the economy.
He said, “We will support measures that will increase and diversify Nigeria’s exports base and ultimately help in shoring up our reserves.
“While the dynamics of global trade continues to evolve in advanced economies, Nigeria remains committed to a free trade regime that is mutually beneficial; but, particularly aimed at supporting our domestic industries and creating jobs on a mass scale for Nigerians. “We intend to aggressively implement our N500bn facility aimed at supporting the growth of our non-oil exports, which will help to improve non-oil export earnings.