Nigeria’s foreign reserves rose to $34.14 billion as of Friday following a $2.75 billion loan borrowed from the World Bank.
This represents a 4.06% rise from the $32.74 billion recorded on June 3, 2024, according to data from the Central Bank of Nigeria (CBN).
The upward trajectory in the country’s reserves has been bolstered by recent loans secured from the World Bank.
In May, the Bureau of Public Enterprises announced that the Federal Government had obtained a $500 million loan from the World Bank to enhance the country’s electricity distribution sector.
Also, the World Bank has committed $2.25 billion in support to help stabilize Nigeria’s economy, bringing the total recent loan package to $2.75 billion.
The World Bank’s statement on the $2.25 billion package highlighted its dual focus on providing immediate financial and technical assistance for economic stabilization and enhancing support for the nation’s poorest and most vulnerable populations.
This financial injection is expected to support ongoing efforts to increase non-oil revenues and safeguard oil revenues, thereby promoting fiscal sustainability and enabling the provision of quality public services.
This infusion of funds has led to an increase of over $1 billion in Nigeria’s reserves within a month.
Last year, Nigeria faced a severe dollar shortage, prompting the CBN to float the naira to attract more foreign exchange inflow.
Despite these measures, the naira has depreciated significantly, losing over 300% of its value in one year and trading at 1,514.31/$ at the Nigerian Autonomous Foreign Exchange market on Friday.
A Bloomberg report recently ranked the naira as the worst-performing currency globally for the first half of 2024, attributing the decline to devaluation, insufficient dollar liquidity, and market volatility.
The Egyptian pound and Ghanaian cedi were also listed among the worst performers.
Despite these challenges, CBN Governor Olayemi Cardoso expressed cautious optimism, noting that the central bank is “relatively pleased” with the progress in stabilizing the naira.
Cardoso indicated that the worst of the currency’s volatility might be over.
In an effort to further stabilize the naira and improve dollar supply, the CBN has implemented several measures.
Last week, the central bank announced that International Money Transfer Operators (IMTOs) could access the official window to sell foreign exchange, thereby enhancing naira liquidity for timely settlement of diaspora remittances.
Also, the CBN resumed dollar sales to bureau de change operators in February, allocating $20,000 to each eligible operator to boost liquidity in the retail forex market.
The CBN’s efforts, combined with the World Bank’s financial support, aim to address Nigeria’s economic challenges and set the stage for more sustainable growth.