Nigeria has made some progress in reducing about $2 billion in foreign exchange (FX) backlogs that emerged in the earlier part of the year.
The backlogs had fallen from higher levels by the end of 2019 as foreign portfolio investors exited Nigerian fixed income holdings amid large Open Market Operations (OMO) maturities.
“Nigeria has made substantial progress in reducing initial foreign exchange (FX) backlogs of firms,” Razia Khan, Africa economist at Standard Chartered said.
“When covid hit by March 2020 the interest rates were much lower compared to a year earlier so that meant a lot of foreign holdings had already left,” Khan said.
The Central Bank of Nigeria (CBN) resumption of dollar sales to foreign investors also helped to reduce the backlogs, according to Khan.
New backlogs are being accumulated however, according to khan, following the lifting of the Covid lockdowns in 2020 by the Federal Government.