Experts propose measures to increase external reserves

Some financial experts have urged the Federal Government to export more gas and agricultural produce as measures to enhance the country’s external reserves.

They spoke in separate interviews with the News Agency of Nigeria (NAN) on Sunday in Lagos.

Prof. Sherifdeen Tella, Head, Economic Department, Olabisi Onabanjo University (OOU), Ago-Iwoye, Ogun, said the new administration should consider exporting more gas to earn foreign exchange.

“The authorities need to initiate macroeconomic policies that will support the deepening of gas production in the country.

“Our gas reserves are enormous and have yet to be harnessed adequately for the growth of our economy,” Tella said.

He noted that revenue-generating agencies must be frugal with public funds and curb revenue leakages.

“Automating the operation of revenue-generating agencies is sacrosanct to blocking all their financial leakages.

“This will boost our country’s external reserves and reduce our fiscal deficit,” Tella said.

Also, Dr. Uju Ogubunka, former Executive Secretary, Chartered Institute of Bankers of Nigeria (CIBN), said the federal government could strengthen its external reserves by exporting more agricultural produce.

“Agricultural produce such as cash crops should be given more priority because of its revenue potential in the global market.

“Our country has enormous comparative advantages to grow our domestic economy,” Ogubunka said.

He said the federal government would earn more foreign exchange if it exported beyond mere primary agricultural produce.

“More emphasis should be placed on the processing of such produce because of its value addition, which will automatically earn a premium.

"Then, the government can earn more and reinvest in the various value chains of the sector,” Ogubunka said.

Also, Mr. Boniface Okesie, President, Progressive Shareholders Association of Nigeria (PSAN), said the federal government should ensure that the nation’s domestic petrochemical plants become operational to boost our external reserves.

He said the authorities should continue to support the completion of all privately owned petroleum refinery plants to scale up our domestic capacity.

“This will enable our country to achieve self-sufficiency and conserve scarce resources that ought to have been expended on its importation.

“Then, the government could begin exporting to many of our West African neighbors and making money in the process,” Okesie said.

Supreme reports that as of May 9, the nation’s external reserves declined to $35.23 billion, according to data from the Central Bank of Nigeria (CBN).

In the last year, the external reserves lost 10.52 percent ($4.15 billion) following declining foreign exchange inflows through oil sales and other sources.

In the first quarter of the year, external reserves lost about $1.82 billion, further weakening the CBN’s firepower to defend the naira.