Nigeria’s foreign-currency reserves will probably keep expanding while facing risks from lower-than- projected oil output and falling prices, central bank Governor Lamido Sanusi said.
Quantitative easing by central banks in the U.S., the U.K. and Japan “all point to a likelihood of strong capital flows to emerging and frontier markets” that may benefit Nigeria, Sanusi said today in an e-mailed response to questions. Still, “the combination of lower global oil prices and weak output performance in Nigeria may lead to a slowdown.”
Oil production in Africa’s biggest producer fell to 1.81 million barrels a day in March, the lowest level since September 2009, according to data compiled by Bloomberg. Nigeria relies on crude exports for about 80 percent of government revenue and more than 90 percent of foreign income, according to the central bank.
Foreign-currency reserves rose 33 percent to $48.9 billion on May 3 from a year earlier, according to data published by the central bank.
“We always said that the budget based on projections of about 2.5 million barrels per day was founded on overly optimistic and unrealistic assumptions,” Sanusi said.
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