Nigeria’s Central Bank Governor, Godwin Emefiele, in an interview published by the Nation, gave a detail of how government “wasted” $66bn in foreign reserves.
Here are his words:
In September 2008, Nigeria’s foreign reserve stood at $62 billion. What did we do with $62 billion? At a time the crude oil price was about N120 per barrel. What did the country do?
What we could have done was to save the money. If we couldn’t save the money, invest it in infrastructure, invest it in industry that would grow productivity and the wealth of our people. But what did we do? The Central Bank of Nigeria (CBN) at thattime went about licensing class ‘A’, class ‘B’, class ‘C’ Bureaux de Change (BDCs).
To class ‘A’ BDCs, the CBN was allocating $1 million per week; to class ‘B’ BDCs, it was allocating $750, 000 per week and to class ‘C’ BDCs, it was allocating $500,000 per week to the extent that between 2005 when the apex bank started selling dollar cash and January 2016, when we stopped it, the CBN had sold dollar cash of up to $66 billion to BDCs. In 11 years, CBN allocated $66 billion, averaging $6 billion per year. If this didn’t happen, we would, comfortably, be having well over $90 billion in our reserve account today and we will not be struggling to pay our bills.
If we had thought of other ways to utilise our reserves in 2008 when it was as high as $62 billion, perhaps certainly, we would not be where we are.