By Emeka Ugwuanyi
Global investment bank, JP Morgan has proved that the Central Bank of Nigeria (CBN) lied in its recent financial report. JP Morgan said yesterday that Nigeria’s net foreign reserves fell to $3.7 billion as at the end of 2022 as against $36.61 billion reported by the CBN.
JP Morgan disclosed this in its latest report on Africa’s largest economy, Nigeria. The American financial firm noted that the $3.7 billion figure is significantly lower than its previous estimate, owing to larger-than-expected currency swaps and borrowing against existing reserves, adding that Nigeria’s net foreign exchange reserves fell to $3.7 billion as of 2022, contrary to $36.61 billion by the CBN.
JP Morgan’s report unveiled the lies contained in CBN’s five-year financial statements released recently following the probe of the apex bank.
“Based on partial information from the audited financial accounts, we estimate that CBN’s net FX reserves were around $3.7 billion at the end of last year, from $14.0 billion at end-2021,” the report stated.
JP Morgan said the low net foreign exchange reserves meant the FX market would face continued market pressures, but added that the CBN could still source foreign exchange at commercial and semi-commercial rates.
Last week the naira currency gained after the state oil firm NNPC secured a $3 billion loan to increase the supply of hard currency on the foreign exchange market.
Prior to the announcement of the loan, the central bank had said it would take “significant” measures to calm the market.
In its audited accounts, the central bank revealed that it owes a total of $7.5 billion to JP Morgan and Goldman Sachs in loans.
JP Morgan also said in its report that the pace of President Bola Tinubu’s reforms would slow down, citing the impact on the population from rising inflation, which it forecast to hit 28 per cent by year-end from the current 24 per cnet.
Tinubu had stated that as part of wide-ranging reforms, he would boost economic growth. He removed fuel subsidy causing prices of fuel to jump.
However despite its concerns the US bank said it was cautiously optimistic on Nigeria.
“We are cautiously optimistic on reforms but acknowledge near-term FX-related pressure,” JP Morgan said.
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