Cowry Assets Management Limited has said that the recent issue of non remittances impacted negatively on the nation’s foreign reserves as it continued to draw down in 2022 financial year.
Group managing director, Cowry Assets management, Mr Johnson Chukwu, who disclosed this while reviewing the nation’s economy in 2022 said the country ‘s foreign reserves have shown a downward trend, dropping by 8.5 per cent from $40.52 billion as from January 4, 2022 to $37.080 billion December 29, 2022.
He said the country experienced limited remittance into the Nigeria’s reserve as Nigerian National Petroleum Corporation Limited (NNPCL) has failed to make remittances into the federal account for seventh month in a row on the back of huge subsidy payment.
He explained that N2.04 billion has already been spent over a seven month period on subsidy payments with N1.04 trillion carried forward.
He said that despite the situation, there is renewed hope that the security contract entered into by NNPC will have help to curtail the level of crude oil theft and attendant shut in.
He explained that the persistent increase in energy prices, supply chain bottlenecks, rising inflation, impending food crisis , socio political tension and the sharp increase in interest rates have led to tightening external financial condition.
He said the Nigerian economy sustained positive Gross Domestic Product growth for 8 consecutive quarters following the exit from recession in 2020, adding that the output grew an average by 30 per cent in 9 months of 2022 despite the confrontations with wearing global economic outlook.
Chukwu further said new unemployment figures have not been released since 2020, casting shadows over optimal utilisation of the nation’s workforce, stressing that the nation’s worsening fiscal position is further highlighted by instability to optimise the global oil price rally as the government faces revenue generation challenges amid an increasing debt burden.
