PUSH1:


You want them to share the money. Hahaha. The president is not going the only dullard we have in the country. You are one of them.

Printerscanner:
Nigeria is leading South Africa in net foreign reserves as that of the West African country hits $47.37 billion in March to beat South Africa which has $43.15 billion.

Nigeria which recently recovered from economic recession with less than $21 billion in foreign reserves has built up its reserves massively over one and half years. The increase in the country’s foreign reserves is reported to have stabilised its foreign exchange which had gone haywire in the past.

South Africa’s reserves fell to $43.115 billion in April from $43.384 billion in March, the Reserve Bank said on Tuesday. The forward position, which represents the central bank’s unsettled or swap transactions, was lower at 1.933 billion dollars from 1.996 billion dollars in the previous month. “The decrease of 440 million dollars in the gross reserves reflects the foreign exchange payments made on behalf of the government and the appreciation of the U.S. dollar against most currencies,” the central bank said. Nigeria’s new figures rose from about $46.2 billion realised at the end of March.
P
The CBN Governor, Godwin Emefiele, announced the new balance in the reserves at the opening of the 25th seminar for Business Editors and financial Correspondents in Uyo. Mr Emefiele, who was represented by the newly appointed deputy governor, Corporate Services, Edward Adamu, said the CBN hopes to meet the $50 billion target before the end of the year.

SOURCE: https://www.vanguardngr.com/2018/05/nigeria-leads-south-africa-foreign-reserves/

waveman2:

Don, t be a ignoramos. The foriegn exchange is on a fixed rate determined by the cbn,have u ever wondered why our exchange rate doesn't, come down as a result of increase in foreign reserve or increase of export and less import. Please try to read more

aribisala0:
I am sure you have no clue what foreign reserves are .
FYI Nigeria has more foreign reserves that the US .

So what?

SoNature:


Today na lecture day

Good question. I had a financial czar explain that to me once.

Many Nigerian banks don't ask Dangote and Otedola for collaterals when these men ask for loans. As a matter of fact, banks beg them to finance their projects because of the networth of these men. Yes, they are rich men.

The same applies to a country. If Nigeria has huge amount in foreign reserves and Buhari holds a business meeting with US businessmen, for instance, he will use that as a selling point.

The reason is that having a huge foreign reserves pass the message that your country is so rich, though this may be untrue, to tax businesses unnecessarily just to survive. Yes, that's the reason.

Huge foreign reserves send a very good signal to foreign investors because nobody likes to be taxed senselessly

I hope you understand now

Vinceolu:
@aribisalaO Let me explain to you how high foreign reserve encourages FDI. FDI means foreign direct investment, meaning money being brought into the economy by foreigners in form of dollars to finance investments in the country with the hope of making a profit. After bringing their dollars in they will have to change it into Naira to finance their projects. As an investor even if there are opportunities to make money (very high ROI) in a certain country.

However,if such country has very low foreign reserve i.e just about barely enough what can cover their 3 months recommended import bill and not enough to intervene and stabilize their country's currency in the case of an economic crisis i.e like Nigeria in 2015 when the price of crude oil dropped suddenly. Would you be willing to bring your dollars into such country and change it to their currency? Knowing they have no way of stabilizing their currency in a period of financial crisis.

Of course you won't,because once you change it to lets say Naira and if there is a crisis then the value of your investment which is now domicile in Nigeria will drop rapidly with the Naira against the money (dollar) you brought in.

Foreign investors like to invest in a country where they are sure the value of their currency won't just lose serious value without the country's ability to protect their currency,hence stability.

In 2015 we had no fiscal instrument to protect the Naira because we barely had the minimum 3 months import reserve and nothing to stabilize the currency. The reason why the Naira is 360 to a dollar now is because some people depleted our reserve pre-2015 and we couldn't defend the Naira when the price of crude oil dropped and with it our dollar reciepts. China has a lot of foreign reserve and with it, a huge FDI.

Also,for the reason why USA does not keep high foreign reserve:Why would they when they can just print more? It's their currency. Also excess dollars stached as foreign reserve by countries,while it is obviously useful for international trade and the reason I just stated above earns very little interest rate,It earns a lot more being put in the economy such as American's. I hope I have answered your question. Have a great day.

georgecso:
Sai Bubu till 2023
Foreign Exchange Reserves are assets held by a central government or other monetary authority, usually in various reserve currencies. ... The main purpose of holding foreign exchange reserves is to make international payments and hedge against exchange rate risks.

somehow:


See one of them.. Even with google that's free, you still dont understand ziltch.

Printerscanner:
Nigeria is leading South Africa in net foreign reserves as that of the West African country hits $47.37 billion in March to beat South Africa which has $43.15 billion.

Nigeria which recently recovered from economic recession with less than $21 billion in foreign reserves has built up its reserves massively over one and half years. The increase in the country’s foreign reserves is reported to have stabilised its foreign exchange which had gone haywire in the past.

South Africa’s reserves fell to $43.115 billion in April from $43.384 billion in March, the Reserve Bank said on Tuesday. The forward position, which represents the central bank’s unsettled or swap transactions, was lower at 1.933 billion dollars from 1.996 billion dollars in the previous month. “The decrease of 440 million dollars in the gross reserves reflects the foreign exchange payments made on behalf of the government and the appreciation of the U.S. dollar against most currencies,” the central bank said. Nigeria’s new figures rose from about $46.2 billion realised at the end of March.

The CBN Governor, Godwin Emefiele, announced the new balance in the reserves at the opening of the 25th seminar for Business Editors and financial Correspondents in Uyo. Mr Emefiele, who was represented by the newly appointed deputy governor, Corporate Services, Edward Adamu, said the CBN hopes to meet the $50 billion target before the end of the year.

SOURCE: https://www.vanguardngr.com/2018/05/nigeria-leads-south-africa-foreign-reserves/

waveman2:
So u even had to like ur post by urself.

emmygzy:
APC propaganda. Nigeria has more foreign reserve than Southafrica and their currency has more value, they better infrastructure, they generate 50,000;megawatts of electricity while the 7,000 APC claim to be generating, they can't even distribute it. Nigeria has the highest poverty and unemployment rate in Africa. Country that have crude oil and will take that crude oil abroad to go and refine it and bring it back again. Useless country with useless leaders and gullible citizens.

aribisala0:
I am sure you have no clue what foreign reserves are .
FYI Nigeria has more foreign reserves that the US .

So what?

14:


You forgot to state this:

SA 2018 Budget = $120bn

Nigeria 2018 Budget = $24bn.

Easy

progress69:


Something must be really wrong with my father and mother

emmygzy:
Then why are those fools celebrating the useless foreign reserve? The only usefulness of tye reserve is for protecting the currency and Nigerias currency is already useless. The should accrue less reserve and spend those monies on infrastructures. USA that has the largest economy, theyre not even in top 15 when it comes to foreign reserve and yet they're number one.

aribisala0:
You haven't a clue have you?

Reservess are not being "accrued" and so cannot be spent. Reserves are like depositors funds in a bank they are "not" accrued and cannnot be spent.If government gets $1 billion from oil sales they send that to the CBN which gives them about 300 million to spend. The dollars are still with the CBN and the government spends the money which enters the economy. The dollars become part of the foreign reserves. Who owns it? Can the government go back and spend that $1 billion that is now n the CBN account? after spending the 300 million Nara. NO!! The $1 billion belongs to whoever is now in possession of the 300 million. The 300million is a CBN debt which is balanced by the $1 billion; a CBN asset.
Others may bring in dollars from many other sources and the same process repeats itself . That is how reserves in the CBN grow. They are not savings of the government or the CBN to be spent . It is because they exist that people would accept the Naira as

Foreign exchange Reserves are simply a balance betwee what NIGERIANS export and import with their money. They belong proportionately to every person who holds naira. To that extent the CBN is a banker to all of us.

In short everybody with naira in his pocket has an "account" with the CBN based on those reserves so if government should spend reserves whose money is being spent

emmygzy:
Okay with your explanation, why are they making noise about it knowing its useless to an average Nigerian? APC always include it in their achievements everytime. With those things over 25 states are still owing salaries. They should just lay low and loud things that matters.

Austinchamakh:
Nigeria dey try,just that.....................................

aribisala0:


Sorry but your write up is based on theory.
There are so many assumptions that is is clear you have little practical experience of the real world. FDI does not have to enter your economy as cash that is changed into Naira or even enters your banls.
In the oil sector e.g. an FPSO off shore platform which could cost $3 billion may enter your country and it is fully faabricated abroad 100%
so FDI has many dimensions to it beyond changing dollars into naira.
The reality is that foreign reserves are not a static measure. They change all the time

So to make a major investment based on the snapshot of a Foreign Reserve measure is a very stupid thing to do . Foreign reserves can be depleted very quickly even if import levels are static and is a measure of confidence in the economy.

It is annoying when people throw words or phrases about because they heard someone else ue them or to sound smart?


What is a fiscal instrument and what has that got to do with defending the Naira. Defending the Naira is a monetary and not a fiscal intervention within the ambit of the Central Bank. It is the government and not the CBN that deploys fiscal instruments and this is not for currency defense

The sector of investment makes a huge difference as well as the business model.
A company that invests in the oil sector makes its own sales and manages adequately its forex cash flow

You have not established any logical cause and effect relationship between FDI and foreign reserves and your China association is a voodoo association.


Did the FDI follow huge Forex reserves or vice versa.

There is no linear graphical relationship between FDI and foreign reserve.
China has the BIGGEST forex reserves but the UK has more investment
Russia has huge foreign reserves rlatively little investment

The UK and Japan are good examples for comparison because they are top economiies but Japan has very huge reserves compared to the UK which has a lot more investment


There are so many factors affecting FDi

First
The opportunity must exist

Next is politiics. If you are not friends with the right countries and do their bidding (especially the US) you will struggle unless you are big in your own right.

You must have security, infrastructure and the workforce. The English language is an advantage and a reasonable judicial system

FDI is not a useful tool for making investment decisions.

In the case of Nigeria is there ANYTHING anyone is doing to enhance FDI? The only effective thing is to industrialize and reduce imports otherwise we restrict the sale of dollars and articially grow reserves as we are doing now .To what end?