The year 2022 for the Nigerian economy was turbulent, to say the least.
While some sectors of the economy grew, others took a dip, and the general standard of living for the average Nigerian became costlier.
The year economically was not the best for the giants of Africa, and a loss in Nigeria’s foreign reserves reiterates this point.
According to the Central Bank of Nigeria, the country’s foreign reserves closed out in 2022 at $37.1 billion. This denotes that the reserves which closed out at $40.52 billion in 2021, not only failed to grow but recorded a $3.43 billion loss in the year under review.
This loss could be a result of the financial gymnastics the Central Bank tried to pull off last year in the country’s official FX market, in an ironic attempt to salvage the country’s currency value.
According to Nairametrics, one of Nigeria’s financial news agencies, “the $3.43 billion loss in Nigeria’s foreign reserves can be attributed to the constant intervention by the Central Bank of Nigeria at the official FX market in a bid to defend the local currency.
Despite the intervention, the exchange rate at the Importers and Exporters window depreciated by 5.7% in 2022, closing the year at N461.5/$1 compared to N435/$1 recorded as of the close of trade in the previous year.
Also, the exchange rate at the parallel market depreciated by 23.1% to an average of N735/$1 in a highly volatile year that saw the exchange surge to N900/$1 in November.”
The Nigerian currency during the year was also subject to a new redesign which the Central Bank deduced would fix some of the complications plaguing the country’s financial market.
The report also noted that Nigeria’s Foreign direct investments (FDI) have fallen severely since the covid-19 pandemic, falling to record levels.
The National Bureau of Statistics showed the FDI at $302.13 million as FDI between January and June 2022, which is glaringly lower than what Nigeria had pre-pandemic. In 2019, during the same period, Nigeria recorded an FDI of $429.72 million and in 2018, Nigeria had an FDI of $507.96 million.
