A total of $7.83 billion was expended on the importation of visible goods into the country, in the second quarter (Q2), the Central Bank of Nigeria (CBN) has said. This was against $6.63 billion spent in the first quarter (Q1) of 2013 and $7.74 billion in Q2 of 2012.
The CBN, which disclosed this in a publication titled: Developments in External Sector of the Nigerian Economy for Second Quarter” noted the money was used for the importation of oil, industrial, food and manufactured product that accounted for 30.3 percent, 28.0 percent, 20.4 percent and 13.3 percent of the total, respectively.
Analysis revealed that a total of $8.70 billion or 52.6 percent of total foreign exchange was used for services as against $3.78 billion in Q1 2013. Of this amount, financial services (banking and other financial services, asset management and money transmission) constituted the bulk, $7.78 billion or 89.3 percent of total, while the balance was accounted for by transportation, communications, business and other services.”
The apex advised that to reduce the utilization of foreign exchange in the importation importation of oil and food products, the government should repair refineries and focus on backward integration to ensure food sufficiency.
“With over 50.0 percent of foreign exchange utilized for the importation of fuel and food, policy should focus on comprehensive backward integration production strategy, while fast-tracking the repair of the existing refineries,” CBN said.
On the exchange rate during the review period, the apex bank said: “the average official exchange rate stabilized at N157.30 to $1 as in the preceding quarter. However, the naira depreciated by 0.6 percent to N160.12 to $1 as against N159.21 at the BDC segment of the market in the review period. Consequently, the BDC premium widened by 0.42 percentage point to 1.79 percent from the level in the preceding quarter.
At the inter-bank market, the exchange rate stood at N158.75 to $1 as against N157.62 and N159.41 recorded in Q1 2013 and Q2 2012 respectively, showing a marginal depreciation of 0.7 percent and an appreciation of 0.4 percent when compared with Q12013 and Q2 2012, respectively.”
Analysis of the trade weighted average of the naira against currencies of major trading partners showed that the nominal effective exchange rate depreciated to 97.41