EFFECTIVE MANAGEMENT OF NIGERIAN EXTERNAL RESERVES
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EFFECTIVE MANAGEMENT OF NIGERIAN EXTERNAL RESERVES
EFFECTIVE MANAGEMENT OF NIGERIAN EXTERNAL RESERVES ABSTRACT
This term paper examines Nigeria’s foreign reserves position, including previous issues, present issues, and future recommendations.
It is critical for students of financial and business studies, as well as those studying economics. It is also crucial for business consultants and investors.
To be honest, it cannot be overstated how essential it is to the Nigerian government and the entire Nigerian people. As a result, good management of Nigeria’s external reserves has the potential to assess the Nigerian economy and compare it to that of other countries.
Furthermore, the administration of Nigeria’s external reserves piques the public’s attention. This is due to unforeseen cheques in the ordinary man’s welfare. A good example was the oil exhortation and boom period, and as a result of this,
Nigeria did not overextend herself in reckless flirtation with new sources of easy money, and the nation was all but destroyed by arrogant and it is advice to the people who rely on oil furthermore the measure taken by the nation;
there is concept evidence that our people’s spending patterns have rationalised to some extent, and agriculture, cash crop production are once more assuming their former roles.
Nigerians are now propelled towards self-sufficiency aspirations, and the new export incentive announced by the federal government of Nigeria would no doubt push manufacturers to use overseas markets to the benefit of our external reserves.
EFFECTIVE MANAGEMENT OF NIGERIAN EXTERNAL RESERVES, CHAPTER ONE
Introduction:
1.1 Background of the Research:
The purpose of this term paper is to examine Nigeria’s external reserves status. It encapsulates prior issues, current issues, and future recommendations. It is extremely significant for students of financial and business sciences, as well as those studying economics. Business consultants and investors value it as well.
To be honest, the importance of Nigerians and the government to the entire Nigerian cannot be overstated in terms of accurately determining the Nigerian economy and its foreign reserves situation. Furthermore, the administration of Nigeria’s external reserves piques the public’s attention.
This is because unanticipated changes in external reserve positions often have an impact on the welfare of the average person. The oil exploration and boom period was a good example, and the Nigerian shot over herself in reckless flirtation with the new sources of easy money,
and the nation was all but destroyed by arrogant and selfish political hyphens, our hitherto sources of export and foreign exchange were abandoned due to the interest rested on the money generated from oil.
However, as a result of all of this, Nigerians began importing those food goods for which we were previously recognised and were among the world’s largest exporters. The fluctuations in global oil prices have taken this country off guard and off guard.
As a result, it highlighted how badly we had mismanaged our external reserves. And the nation’s economy was misused by imprudent, inept, and corrupt regimes that regarded leadership as a way to private gain and self-enrichment.
Nigerians found that value had nothing to stand on in the absence of petroleum, as the country is entirely dependent on money derived from crude oil.
But, in essence, we must thank the current administration for attempting to determine when we strayed from the path of sanity and economic balance, and for its advice to the nation, there is concrete evidence that our people’s spending patterns have rationalised to some extent,
and agriculture, each crop production are once again assuming their abandoned role Nigerians are now motivated towards the goals of self-sufficiency, and the export incentive recently released by the federal government of
1.2 Statement of the Problem:
The purpose of this research is to address the task of determining the effective management of Nigerian external reserves. According to Section 25 of the Central Bank of Nigeria Act, 1959, as amended, the Central Bank is required to hold and maintain the country’s foreign exchange reserves and to inform of the following card combination thereto:
(i) Gold coins and bullions.
(ii) Foreign exchange balance in convertible currency.
(iii) Foreign bills of exchange denominated in convertible currency.
(iv) Securities of an international financial institution with a maturity of no more than five years.
(v) International monetary fund assets such as I.M.T gold, trance, Special Drawing Rights (SDRS), and I.M.T oil facility balance.
(vi) Treasury bills issued by foreign countries.
(vii) Other foreign government or government guaranteed securities with a maturity of no more than ten years.
In practise, the majority of reserves consist of three primary things. Foreign banks that accept convertible currencies. These three have accounted for more than 70% of the country’s entire reserve.
1.3 Objective of The Study:
The essence of why this project is being undertaken can be enumerated as follows:
1. To investigate the relative value of effective management of Nigerian external reserves.
2. To examine the behaviour of the effective administration of Nigerian external reserves, which began in August 1987.
3. To ascertain the extent to which Nigerian effective management has affected external reserves.
4. To provide recommendations to the monetary authorities for a more effective/efficient use of this instrument through the application of appropriate Nigerian structural policy management.
1.4 Importance of the Research:
This study will be beneficial to Nigeria’s foreign reserves as well as individual reserves in the following ways.
1. It will be used by managers to make decisions on whether to continue funding a certain reserve project or not.
2. The ability to obtain financing will be simply determined.
3. It will ensure that loans, including interest credits, are repaid on time.
4. External reserves will benefit greatly from this research because they now have access to more credits.
5. It will advise policymakers on how to address the numerous reserves credit-financing issues that have been discovered.
6. This study is critical to the overall management since any attempt to build a reserve is a major undertaking.
7. Finally, this study work adds to the current literature on the management of external reserves and can be used as a reference.
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