Official data reveals massive shortage of forex inflows via the CBN in 2020

A total of $43 billion in foreign currency flowed through Nigeria’s central bank as outflows in the whole of 2020, latest data from the Apex bank shows. This compares to the $66 billion in foreign currency outflows via the CBN in 2019.

The CBN received a total foreign currency inflow of $40 billion during the year compared to $62 billion a year earlier. The Central Bank of Nigeria has recorded a deficit or a net foreign currency outflow of $3 billion in 2020 (2019: $4 billion).

Nigeria faced an excruciating foreign currency crisis in 2020 as the fall in oil prices, global lockdown due to Covid-19 and a dearth in capital importation affected Nigeria’s foreign currency balances forcing multiple devaluations during the year and a wide disparity between the official and parallel market exchange rate.

Dip in oil and non-oil dollars
In prior years, the central bank has had to rely on oil dollars, non-oil imports and capital importation to boost the country’s foreign currency balances. However, all three major sources recorded massive drops as covid-19 raged on and foreign investors stayed away. For example, foreign currency inflow from oil revenues in 2019 was $15.8 billion compared to $10.5 billion in 2020. Non-oil forex inflows also went from $40.8 billion in 2019 to $29.6 billion in 2020.

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