THE dwindling fortune of Nigeria’s real sector has been unveiled with nearly two-third of the nation’s foreign exchange demand in the fourth quarter of 2012 injected into the importation of visible goods.
The disclosure, contained in the External Sector Development Report of the Central Bank of Nigeria (CBN), shows that $6.42b or 62.8 per cent of foreign exchange demand was utilised on visible goods.
The report, which highlights major external sector developments in the fourth quarter of 2012, compared with the third quarter of 2012 and fourth quarter of 2011, also reveals policy challenges that require the attention of CBN’s management.
Analysis of the utilisation shows that the importation of industrial oil, food and manufactured products was 28.3 per cent, 27.3 per cent, 19.2 per cent and 18.0 per cent, respectively.
Further analysis also reveals that $3.80b or 37.2 per cent was expended on services, which comprised, financial- $2.97b or 78.1 per cent; business- $0.23b or 6.1 per cent; transportation- $0.29b or 7.7 per cent; while “others” accounted for the balance.
The report notes that foreign exchange utilisation of 19.2 per cent for food importation was high and suggests the need for adequate funding of the agricultural sector and vigorous pursuit of the financial inclusion programme.
“The persistent deficit in the services account calls for proactive policy actions targeted at the development of the services sub-sector and investment in human capital through vocational and technical education.
“The current attention being given to the agricultural sector should be sustained in order to reduce high import bills on food items. The major threats to external sector stability in the medium term are: the volatile nature of the short-term capital inflows, slowly rising external debts and non- diversification of the economy,” the report said.
Source: The Guardian