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The Central Bank of Nigeria (CBN) has raised concerns about the significant drop in dollar inflows to the country’s economy, with only $72.3 billion recorded in the fourth quarter of last year.
This represents a 23.3% decline compared to the previous year’s $94.3 billion and a 37.4% decline compared to the $115.6 billion received in 2020.
The situation is expected to worsen in the first and second quarters of this year.
The decline in foreign direct and portfolio investments has contributed to the recurrent decline in dollar inflow.
The CBN’s dollar supply in the FX market has also been impacted by the declining inflows of dollar into the economy.
The decline in foreign exchange inflows has also affected the nation’s external reserves as the apex bank continues to defend the Naira and fund import bills at the expense of the reserve level.
The CBN is adopting policies towards increasing foreign exchange inflows into the country, especially through non-oil export, such as the Naira4Dollar scheme and the RT 200 FX programme.
The latter is aimed at getting $200 billion in Foreign Exchange earnings over the next 3-5 years from non-oil proceeds and is expected to improve FX inflows in the Nigerian economy in the short-to-medium term.
This article was updated 5 months ago