Short-term boost to reserves

Gross official reserves increased by US$950m in December to US$43.12bn on the back of the FGN’s latest Eurobond sales which raised US$2.86bn. This accretion has been partly countered by two negative developments. The first is the continuing, and well-documented exit of some offshore portfolio players from Nigeria, as from other emerging/frontier markets. The CBN is now a regular seller of fx at the investors’ and exporters’ window (NAFEX). The second is the apparent withdrawal on the FGN’s instructions of US$1.6bn from the excess crude account.


  • Reserves at end-December covered more than 16 months’ merchandise imports, and nine months when we include services on the basis of the balance of payments (BoP) to June 2018. This remains a more than adequate buffer.
  • Some definitions are required for the sake of clarity, however. The Nigerian data are gross, cover just fx and exclude swap contracts.
  • The South African series in our chart shows the international liquidity position. This measure includes gold and SDR positions at the IMF of US$7.7bn combined along with fx and forward commitments, and then deducts swaps and deposits arising from foreign debt issuance. Its reserves have been remarkably stable and enjoyed a modest boost in December due to a firmer US dollar gold price.
Official reserves (US$ bn)

Sources: CBN; South African Reserve Bank (SARB); Central Bank of Egypt (CBE); FBNQuest
Capital Research


  • As for the CBE’s data, net international and gross reserves are similar. Egypt’s reserves declined by about US$2bn in December, which could reflect the withdrawal of offshore investors.

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