…Inflation to trend above 10%
Kunle Kalejaye 24 February 2016, Sweetcrude, Lagos –
Nigeria’s external reserves which stood at $34.47 billion as at December 31, 2014, declined by 15.67 percent in 2015, and is expected to deplete further in 2016, according to a report by Guarantee Trust Bank, GTB.
The report, tagged ‘Nigeria: Macroeconomic and Banking Sector Themes for 2016’, said the nation’s current external reserves of $29.07 billion would deplete for obvious reasons.
“The country’s external reserves which stood at $34.47 billion as at December 31 2014, declined by $5.4 billion (15.67%) to close the 2015 financial year at $29.07 billion on December 31 2015.
“With the price of oil, which account for more than 90 percent of the country’s exports, hovering around $28 per barrel in January 2016 and backlogs of unmet foreign exchange demand, we expect further depletion of the reserves in 2016,” the report said.
It maintained that the depletion of the external reserves will make Nigeria’s economy unattractive for foreign investors.
The report also stated that the crash in yields on treasury bills and uncertainty around the true pricing of the naira would suspend the inflow of capital into the economy.
“The current negative real return in the local economy makes investment in Nigeria’s assets by foreign portfolio investors unattractive,” the report added.