Posted by By SEUN ADESIDA on
The World Bank has forecast a nine percent growth in the oil and non-oil sectors in Nigeria and other sub-Saharan nations. It also predicted a continued economic growth in the country and on the African continent, in general.
• Yet to agree with CBN on foreign reserves
The World Bank has forecast a nine percent growth in the oil and non-oil sectors in Nigeria and other sub-Saharan nations.
It also predicted a continued economic growth in the country and on the African continent, in general.
This is coming even as the global bank and the Central Bank of Nigeria (CBN) are yet to fashion out a response to the effect of falling value of dollar in the international market, at a time Nigeria has $60 billion in foreign reserve.
Speaking at the spring meetings of the World Bank and International Monetary Fund (IMF), Mr. Saul Lizondo, deputy director, World Bank, said that Africa's economy would continue to grow. He said that the World Bank and IMF were yet to discuss with Nigeria on 'exposure to the dollar."
He added: 'Regarding the exposure to the dollar, in terms of reserves, I think that this is a complicated issue and the management of the reserves is something that we have not discussed explicitly with the authorities, about the allocation of the reserves."
On the prospects for the economy, he said: 'We consider that the sub-Saharan economy will continue growing strongly. In particular, we anticipate that there is also going to be a rebound in production of oil, so we are forecasting output growth at about nine percent in the oil sector and the non-oil sector."
On inflation, he revealed: 'In terms of inflation, we consider that the government will continue with the single-digit inflation, in particular, given that the Central Bank has been tightening monetary policy to control inflation."
Nigeria's foreign reserve has hit an all time high of $60 billion, according to the Governor of the Central Bank of Nigeria, Prof. Chukwuma Soludo. He said the figure makes Nigeria's reserve the second largest in Africa, after Algeria's, which, he said, is slightly over $100 billion.
Soludo also noted that Nigeria has one of the fastest growing banking sectors in the world. According to him, recapitalization had prompted depositors in the nation's banks to grow from 13 million to 24 million, while capitalization increased from N1.4 trillion to N5 trillion, and credit grew from N1.9 trillion to N4.5 trillion.
'Our foreign reserve has passed a little bit over $60 billion, and it is still growing," he said.
A source at the apex bank, however, said of the foreign reserve: 'Yes, the CBN would diversify its foreign reserve dollar holdings," adding that diversification does not mean that CBN was moving the whole of the reserves from dollars.
The source added: 'Indeed, the bulk of the reserves will continue to be in dollars. We earn our exports in dollars and a good percentage of our imports is also in dollars. The issue is a lot more complicated than is usually assumed."
Responding to the issue, a Nigerian barrister, Richard Akinjide, said: 'Against all the competitive rules put forward by the World Bank, the US has a trade monopoly with the Nigerian currency. Why does the Naira only trade against US dollars? Why has the dollar acquired this monopoly? Who granted it? These are questions for another debate."