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Nigeria’s external reserves have increased by 11.1% so far in 2017, according to the latest data released by the Central Bank of Nigeria (CBN). From the beginning of the year to Thursday, February 9, 2017 – the latest date for which data is available – $2.9 billion was added to the reserves to reach $28.7 billion.

The forex reserves depleted by 11.1% or $3.2 billion in 2016, dropping from $29.07 billion recorded on December 31, 2015 to $25.84 billion as of December 30, 2016.

Although the price of Brent Crude increased from an average of $30 per barrel (pb) in January 2016 to $54 pb in December 2016, Nigeria suffered significant decline in output last year due to the destruction of oil infrastructure by militants in the Niger Delta. The CBN also continued its programme of defending the naira amid forex scarcity and increasing pressure on the local currency.

The government has been negotiating a ceasefire with the militants even as oil prices have mostly remained above $50 pb since January following the deal by members of the Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC members like Russia to cut production.   

Some analysts have questioned the sustainability of the continuous accretion of Nigeria’s external reserves amid severe dollar shortages, and a fragile peace deal with the Niger Delta militants and uncertainties in the international market.