Nigeria’s external reserves which have maintained a downward trend since last year fell to a two-year low of $39.725 billion last the week.

The current position of the reserves represents a significant decline by $3.78 billion or 8.7 per cent, as against the $43.505 billion it stood at the beginning of this year.

The last time the reserves were around its current value was in September 2012.

The Central Bank of Nigeria (CBN) has been using the reserves to support the nation’s currency which has been under intense pressure in recent times.

The BGL Securities in a recent economic report also identified oil theft, pipeline vandalism and technical hitches as the albatross to Nigeria’s foreign reserve build up as well as the Excess Crude Account (ECA)/Sovereign Wealth Funds (SWF) savings. This, it pointed out may affect fiscal sustainability.

It argued that: “The country is currently experiencing the worst oil production disruptions in four years with output falling to pre-amnesty programme levels.”

Meanwhile, the latest CBN economic report for the fourth quarter of 2013 showed that total federally-collected revenue fell to N2.202 trillion. This represents a decline of 22.3 and 19.8 per cent below the quarterly budget estimate and the level in the preceding quarter, respectively.

Relative to the level in the corresponding quarter of 2012, total federally-collected revenue fell by 10.5 per cent.

The decline relative to the level in the preceding quarter was attributed to the fall in both oil and non-oil revenue.

In addition, at N1.538 trillion, gross oil receipts, which constituted 69.9 per cent of the total, fell below the proportionate budget estimate and the level in the preceding quarter by 20.4 and 5.2 per cent, respectively.

The development relative to the preceding quarter was attributed to the decline in crude oil and gas exports during the review quarter.

Non-oil receipts (gross), at N663.53 billion (30.1 per cent of the total), was below both the proportionate budget estimate and the level in the preceding quarter by 26.4 and 41.0 per cent, respectively.

The decline in non-oil revenue relative to the preceding quarter was due to the fall in receipts from components of the non-oil revenue, except customs and excise duties as well as VAT.

As a percentage of projected fourth quarter 2013 nominal GDP, oil and non-oil revenue were 13.0 and 5.6 per cent, respectively.

Of the gross federally-collected revenue during the review quarter, the sum of N1.490 trillion (after accounting for all deductions and transfers) was transferred to the Federation Account for distribution among the three tiers of government and the 13 per cent Derivation Fund. The Federal Government received N702.22 billion, while the state and local governments received N356.17 billion and N274.60 billion, respectively.

The CBN also disclosed that in the fourth quarter of 2013, the Federal Government received N31.97billion from the VAT pool account, while the state and local governments received N106.57billion and N74.60billion, respectively.

Giving an insight into the revenue sharing, the report said, “The sum of N106.65billion was also distributed as the Subsidy Re-Investment and Empowerment Programme (SURE-P) among the three tiers of government and the 13% Derivation Fund as follows: Federal Government (N48.88billion), state governments(N24.79billion), local governments (N19.11billion) and 13% Derivation Fund (N13.86billion).

“In addition, the sum of N22.85 billion from NNPC Refund was shared by the sub-national governments and 13% Derivation Fund as follows: State Governments (N11.23 billion), Local Governments (N8.65 billion) and 13% Derivation Fund (N2.97 billion).

“Thus, the total allocation to the three tiers of government in the fourth quarter of 2013 amounted to N1, 832.78billion. This was below the 2013 quarterly budget estimate by 11.6per cent.”

Giving an insight into the banking operation in the last quarter of 2013, the report said the total assets and liabilities of the DMBs stood at N24, 334.7billion at the end of the fourth quarter of 2013, representing an increase of 4.4per cent over the level at the end of the preceding quarter. The report explained that the funds, which were sourced, largely, from increased mobilisation of demand deposit and Federal Government deposit, were used for accretion to reserves and purchase of government securities.

“At N12, 224.8 billion, banks  credit to the domestic economy rose by 8.6 per cent above the level in the preceding quarter.

“The development was attributed, largely, to the 346.9 per cent increase in claims on the Federal Government.”

Central Bank’s credit to the banks however recorded a decline as it fell by 1.6 per cent to N229.8billion at the end of the review quarter, reflecting the decline in overdrafts to banks, while total specified liquid assets of the DMBs stood at N6, 614.79 billion, representing 39.5 per cent of their total current liabilities. At that level, the liquidity ratio, rose by 1.8 percentage points above the level in the preceding quarter, and was 9.5 percentage points above the stipulated minimum ratio of 30.0 per cent. The loans –to –deposit ratio, at 3,6.3 per cent, was 2.9 percentage points above the level at the end of the preceding quarter, but was 43.7 percentage points below the prescribed maximum ratio of 80.0 per cent

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