Our Foreign Exchange Bazaar of the Nigerian Naira

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MONDAY QUARTER-BACKING:  OUR FOREIGN EXCHANGE BAZAAR OF THE NIGERIAN NAIRA

By

Mobolaji E. Aluko, PhD

alukome@aol.com

Burtonsville, MD, USA

March 1, 2004

SUCCESS STORIES OF THE DUTCH AUCTION SYSTEM (DAS)

On Wednesday, February 25, 2004, the one-hundred-and-fifty-fifth (155th) session of the Nigerian Naira bazaar since its latest inception on July 22, 2002 – and the 15th session of 2004 –  was held in Abuja  under the auspices of the Central Bank of Nigeria (CBN).  Otherwise respectably known as the Dutch Auction System (DAS), that bazaar’s outcome was that the Naira appreciated by 15 kobo, from was the 45th one N135.15 (at the 154th session) to the US dollar to N135.00.  This particular appreciation over a 19-month period in the midst of 78 depreciations and 31 stable sessions since July 22, 2002, leading to an overall depreciation of  900 kobo (7.14%) since the initial exchange rate of N126 to the dollar on the starting DAS date.

QUOTE

http://www.thisdayonline.com/archive/2002/08/17/20020817bup01.html

The Dutch Auction System is popularly used as a bidding method on those internet auction sites that claim to sell everything from a new heart to diamonds. In this format the seller places one or more identical items on sale at the same time listing a minimum required price. Bids are ranked in order of price, then quantity, and lastly time. These auctions are timed events usually lasting either hours or days. Bidders submit the number of items they want and how much their bid per item is. The final selling price in this type of Dutch auction is determined by the lowest of the winning bids.

Another name for it is the descending-price auction, commonly known in academic literature as the Dutch auction. It is the technique used in Netherlands to auction produce and flowers (hence, a “Dutch” auction). It uses an open format rather than a sealed-bid method.

In Nigeria, the DAS bidding takes place on Mondays and Wednesdays. The minimum bid amount by an authorised dealer is $100, 000.00 and the currencies of transaction are the naira and the United States dollar. The CBN announces every Tuesday and Thursday the result of each auction and the official exchange rate. Nigeria is not alone in using the Dutch Auction System.

Dutch auctions have been used to finance credit in Romania and for foreign exchange in Bolivia, Jamaica and Zambia. In America the national treasury sometimes uses it to sell its new treasury notes or treasury bonds. The Treasury opens up all bids and determines the lowest acceptable bid price. All successful bidders pay this stop-out price.

An example could make it clearer. Let’s say the Central Bank has 20 million US dollars on sale and the minimum selling price for a dollar is N20. Buyers can ask for as much as they want as long as it is not lower than $100, 000. Five companies bid N30 for one dollar each and ten others bid N50 for one dollar. These fifteen companies will want different quantities of dollars. Some would be bidding for $6 million, while others would be bidding for $20 million. Because the ten companies bid higher than the other five, they will definitely be guaranteed foreign exchange. But all fifteen companies will pay N30, the lowest successful bid. It is this minimum price that becomes the Central Bank’s exchange rate. Anyone who wants to buy a dollar from the central bank will pay N30.

UNQUOTE

Table 1 shows the entire history of those foreign exchange mechanisms in Nigeria since 1958, while Table 2 gives figures of foreign exchange market movements since 1995 which I have put together from various sources –  with a few gaps in information.

When one recognizes that in the 19 months preceding the commencement of the DAS auction, the Naira had depreciated from N106.19 (from end of December 2000) to N125.65 to the US dollar on July 19, 2002 (an 18.3% depreciation), a claim of relative success can be made that the latest DAS has cut by more than half  the haemorrhaging of the Naira.

There is another issue that we need to look at with respect to DAS:  the premium of the parallel market over the official rate.  In December 2000, the parallel rate (N121.83) was 14.7% higher than that of the official one (N106.19).  In the latest DAS auction of February 24, the official marginal rate was N136 while the  parallel market rate was N141,  just 3.67% higher,  and amounting to more than a one-third cut relative to the pre-DAS period.

BUT AT WHAT PRICE STABILITY AND CONVERGENCE ?

At what price are this relative stability of the Naira and convergence of the official and parallel exchange rates?  This is evident from Table 2:

(1)    the increase in total foreign exchange dollars used in this mechanism:  $4.88 billion in 1999, $7.256 billion in 2000 and $9.659 billion in 2001 (the IFEM years)  then  $9.19 billion in 2002 and $9.846 billion in 2003 (the DAS years.)

Actually, the TOTAL official forex inflow in 2001 was $15.7 billion and official outflow was $14.7 billion (net inflow was $1 billion); in 2002, the forex inflow      was $9.8 billion and outflow was $13.0 billion (net outflow of  $3.2 billion),       while in 2003, the inflow was $15.14 billion and the outflow was $16.34 billion (net outflow of $1.20 billion)  See Figures 1 and 2.

(2)    The reduction in external reserves during the same period: $5.45 billion in 1999, $9.263 billion in 2000, $10.439 in 2001  (the IFEM years) and then $7.70 billion in 2002 and $7.48 billion in 2003 (the DAS years.)  In mid-February of 2004, this has declined to $7.26 billion.

The effect of both of these two observations is a significant reduction in our balance of payments (BOP).  In fact, in Naira terms, according to the CBN,

QUOTE

http://www.cenbank.org/Out/annual/2002/Areport-02-1.pdf

“The external sector was under severe pressure in 2002 as the balance of payments swung into an overall deficit of N525.7 billion, or 8.9 per cent of GDP, from a surplus of N24.7 billion or 0.4 per cent of GDP in 2001.  Consequently, there was a substantial draw-down of the external reserves and deferred payments of scheduled debt service obligations. The current account recorded a surplus of N232.9 billion, which was more than offset by the deterioration in the capital and financial account position. The deficit in the capital and financial account widened from N211.2 billion in 2001 to N749.4 billion in 2002. In addition, the naira exchange rate depreciated from an average of N111.90 per US$1.00 in 2001 to N120.47 in 2002. The level of external reserves declined by 23.3 per cent from end-December 2001 level of US$10.42 billion to US$7.99 billion while the deferred scheduled debt service totalled US$1.93 billion. The level of external reserves could support 6.4 months of current foreign exchange disbursements, compared with 8.0 months in 2001. In terms of visible imports, the external reserves could finance 10.1 months of current imports.”

UNQUOTE

The advantage of stability (only relative; there was still Naira depreciation) and convergence in the face of serious balance of payment deficits without concomitant development gain is therefore very dubious.

POSSIBLE REASON:  MIS-ALLOCATION OF FOREX FUNDS ? – AND WHAT TO DO

Table 3 showing the sectoral allocation of foreign exchange usage indicates what might be STRUCTURALLY wrong, no matter the foreign exchange control regime employed.  The agricultural sector where most Nigerians reside has a foreign exchange allocation of only 3.6 – 8.3% over the period 1999 – 2003.  In this same period, an average of about 33% of foreign exchange allocation was spent on finished goods while the “invisibles” (expended on embassies, etc.) had 12% to as high as 30%, meaning that these two latter non-productive sectors made up as much as 50% of the foreign allocation.  The industrial sector was practically level at about 40% despite what might be increases in world materials/machinery prices.

It would therefore appear that even if the TOTAL forex used is at the same levels as currently expended, then a DELIBERATE re-allocation of our scarce foreign exchange in order to stimulate DOMESTIC PRODUCTION  particularly in the agricultural sector; to discourage IMPORTS OF FINISHED GOODS;  and to be more frugal about/critical in verifying INVISIBLE TRADE foreign exchange outflow would be advantageous to our foreign exchange and balance of payments situation.

I rest my case.

BIBLIOGRAPHY

Some DAS Write-Ups

https://www.nigerianmuse.com/essays/DASwriteups.htm

TABLE 1:  History of Foreign Exchange Controls in Nigeria

Year Forex Used Forex Control Regime President/Head of Government
1958 CBN Established  by Act of Parliament Balewa (PM)
1959 Nigerian notes /coins issued July 1; CBN

becomes fully operational

Balewa (PM)
1962 Forex Control Act Estab’d under CBN Balewa (PM)
1966 General Ironsi > Jan. 15
1966 General Gowon > July29
1969 Banking Decree General Gowon
1973 Naira notes introduced January 1 (decimal;kobo) General Gowon
1975 Gen. Mohammed > Aug. 15
1976 Gen. Obasanjo > Feb. 13
1979 Alhaji Shagari > Oct. 1
1982 Comprehensive Forex Control Shagari
1983 General Buhari > December 31
1985 General Babangida > Aug 27
1986 $1 > N1 for first time ever in March

SFEM Introduced  > Sept 26

Babangida
1987 DAS > April 2

UOM > July 2

Babangida
1989 Bureau de Change established Babangida
1990 DAS discontinued December 14, 1990 Babangida
1991 Major CBN Decree No. 24 Babangida
1992 Complete floating of Naira > March 5 Babangida
1993 June 12 presidential elections aborted Babaginda

Sonekan > August 27

Abacha > November 17

1994 Naira pegged to the US$ Abacha
1995 $1.712 billion AFEM Abacha
1996 $1.861 billion AFEM Abacha
1997 $2.911 billion AFEM Abacha
1998 $4.248 billion AFEM Abubakar > June 8
1999 $4.88 billion AFEM

IFEM > Oct 25

Obasanjo > May 29
2000 $7.256 billion IFEM Obasanjo
2001 $9.659 billion IFEM Obasanjo
2002 $ 9.190 billion IFEM

DAS > July 22

Obasanjo
2003 $9.475 billion DAS Obasanjo
2004 DAS Obasanjo

Second-tier Foreign Exchange Market (SFEM); Unified Official Market (UOM); Autonomous Foreign Exchange Market (AFEM); Inter-bank Foreign Exchange Market (IFEM); Dutch Auction System (DAS)

Source:  http://www.cenbank.org/welcome.htm


TABLE 2:  RECORD OF DAS TRANSACTIONS

Sources:  http://www.cenbank.org; http://www.citibank.com/nigeria/gcib/citinews/mktfc02.htm http://www.cenbank.org/Dutch_Search.asp, http://www.ibtclagos.com

http://www.thisdayonline.com/archive/index.html Archives of ThisDay Online

Avg. Bureau Parallel External Reserves Total Forex Used
AFEM De Change Market End of Year End of Year
End Year N/$1 N/$1 N/$1 $ billion $ billion
1995 82.33 1.44300 1.712
1996 81.48 4.08600 1.861
1997 81.98 7.58020 2.911
1998 84.84 7.10000 4.248
1999 91.83 5.45000 4.88
Month of 2000 (avg) IFEM Bureau De Change Parallel Market External Reserves Forex Used
January 98.73 103.50 103.75
February 99.89 106.07 106.5 6.49000
March 100.65 105.83 106.3 6.62000
April 100.40 106.30 106.1
May 101.17 106.13 105.75
June 101.83 105.79 106.13 6.70000
July 104.90 111.00 110.9
August 103.36 113.87 114.87
September 102.36 119.00 118
October 102.52 119.14 119
November 102.52 120.28 119
December 106.19 122.00 121.83 9.26300 7.25600
Month of 2001 (avg) IFEM Bureau De Change Parallel Market External Reserves Forex Used Forex Inflow Forex Outflow Net Inflow
January 109.00 120.00 122.00 9.89800
February 110.00 123.50 122.50
March 110.20 125.00 127.50
April 127.50 130.50 132.00
May 113.10 137.00 140.00
June 112.20 133.00 139.00
July 111.30 134.00 137.00 10.86000
August 111.20 133.00 135.80 10.40000
September 111.10 133.00 135.00
October 111.10 132.00 133.00
November 112.10 134.00 135.00
December 112.45 134.50 134.00 10.43900 9.65900 15.70000 14.70000 1.00
Month of 2002 (avg) IFEM Bureau De Change Parallel Market External Reserves Forex Used Forex Inflow Forex Outflow Net Inflow
January 113.95 134.50 135.00 10.10000 0.8433 1.0948 -0.2515
February 114.70 134.00 136.00 9.70000 0.8528 1.1851 -0.3323
March 115.10 134.50 135.50 0.7140 0.8912 -0.1772
April 116.10 134.50 135.50 9.40340 0.6583 0.8910 -0.2327
May 116.30 134.00 135.00 9.22630 0.7281 1.3110 -0.5829
June 118.50 134.00 135.00 8.67400 0.7439 0.9203 -0.1764
*July 121.50 136.50 135.50 7.76500 0.6147 1.3132 -0.6985
August 127.00 137.00 136.00 7.69700 0.5857 1.0200 -0.4343
September 126.00 135.00 136.00 7.42400 0.8094 1.3877 -0.5783
October 126.50 137.00 137.50 7.74190 1.0537 1.0674 -0.0137
November 126.80 137.00 138.00 0.7751 0.9765 -0.2014
December 126.80 136.50 137.00 7.70000 9.19000 0.8639 1.1701 -0.3062
TOTAL 9.2429 13.2283 -3.9854
Month of 2003 (avg) DAS Bureau De Change Parallel Market External Reserves Forex Used Forex Inflow Forex Outflow Net Inflow
January 127.27 1.1257 1.41709 -0.2914
February 127.02 1.3228 1.16406 0.1587
March 127.37 1.4028 1.00529 0.3976
April 127.60 1.2193 1.09925 0.1200
May 127.82 1.2886 1.37332 -0.0848
June 127.92 1.0137 1.68686 -0.6732
July 127.73 1.0904 1.29620 -0.2058
August 128.30 1.1340 1.52550 -0.3915
September 128.36 1.1731 1.76940 -0.5963
October 132.52 1.3930 1.11170 0.2813
November 138.20 1.0415 1.56770 -0.5262
December 137.00 9.19000 1.9341 1.32442 0.6097
TOTAL 15.1390 16.3408 -1.2018

From July 22, 2002, CBN replaced the 33-month old Inter-Bank Foreign

Exchange Market (IFEM)  with the Dutch Auction System(DAS)
Date CBN CBN Amount S Bureau Parallel
Bid Rate Offer Rate Sold de Change Mkt
IFEM N/$1 N/$1 ($m) N/$1 N/$1
2-Jan-02 112.45 113.45 39.43
3-Jan-02 112.45 113.45 34.06
30-Jan-02 113.20 114.20 34.32
31-Jan-02 113.20 114.20 29.31
1-Jul-02 119.10 120.10 39.56
2-Jul-02 119.10 120.10 47.78 136.40 136.02
3-Jul-02 119.10 120.10 22.44
4-Jul-02 119.10 120.10 33.32
5-Jul-02 119.65 120.65 28.82
8-Jul-02 119.65 120.65 32.22
9-Jul-02 119.65 120.65 41.07
10-Jul-02 119.65 120.65 24.01
11-Jul-02 120.15 121.15 28.97
12-Jul-02 120.15 121.15 28.72
15-Jul-02 122.15 123.15 32.67
16-Jul-02 122.15 123.15 39.78
17-Jul-02 123.15 124.15 46.52
18-Jul-02 123.15 124.15 47.05
19-Jul-02 124.65 125.65 52.76
Auction No. by Year DATE MARGINAL RATE UPPER LIMIT AUCTION AMOUNT ON OFFER TOTAL BID AMOUNT SOLD LOWEST BID RATE PARALLEL MKT RATE External  Reserves
(N/$1) (N/$1) NUMBER ($m) ($m) ($m) (N/$1) (N/$1) (End of Month)
(running) ($b)
2002
IFEM ==> 19-Jul-02 125.65
DAS  from here on
1 22-Jul-02 126.00 135.99 1 40.00 62.64 41.05
2 24-Jul-02 128.55 132.50 2 60.00 184.15 70.42
3 29-Jul-02 138.01 135.90 3 75.00 203.49 77.50
4 31-Jul-02 126.00 135.05 4 150.00 150.05 143.70 7.77
5 5-Aug-02 127.66 135.50 5 85.00 113.85 85.02 120.00
6 7-Aug-02 125.00 133.00 6 115.00 89.36 83.61 135.50
7 12-Aug-02 126.00 134.50 7 85.00 107.02 88.15 135.00
8 14-Aug-02 125.00 131.00 8 100.00 93.92 89.49 136.00
9 19-Aug-02 125.00 130.00 9 85.00 79.80 67.25 136.00
10 21-Aug-02 125.00 131.50 10 75.00 73.08 68.27 136.00
11 26-Aug-02 125.51 131.00 11 75.00 110.98 74.10
12 28-Aug-02 126.00 130.00 12 70.00 102.00 72.21 136.00
13 2-Sep-02 126.01 131.00 13 70.00 98.03 69.56 136.50
14 4-Sep-02 126.25 130.00 14 70.00 103.99 70.55 136.50
15 9-Sep-02 126.51 130.00 15 70.00 103.66 86.09 136.50
16 11-Sep-02 126.85 129.00 16 70.00 120.54 64.04
17 16-Sep-02 127.20 130.00 17 80.00 133.43 79.66 138.00
18 18-Sep-02 126.76 130.00 18 100.00 130.67 114.82 138.00
19 23-Sep-02 126.00 130.00 19 80.00 69.76 52.33 138.00
20 25-Sep-02 126.25 130.00 20 80.00 102.44 82.94 124.00 138.00
21 30-Sep-02 126.00 129.00 21 80.00 77.49 70.66 7.42
22 2-Oct-02 126.00 131.00 22 80.00 64.58 61.08
23 7-Oct-02 23 80.00 68.14 67.20
24 9-Oct-02 126.25 24 70.00 114.17 70.50
25 14-Oct-02 126.50 128.00 25 80.00 117.53 80.55
26 16-Oct-02 126.55 128.00 26 80.00 101.23 80.32
27 21-Oct-2002 126.70 27 80.00 107.73 81.96
28 23-Oct-02 126.81 129.00 28 90.00 117.21 84.94
29 28-Oct-2002 126.91 29 85.00 98.96 81.00
30 30-Oct-2002 126.75 30 85.00 83.50 76.85
31 4-Nov-2002 126.80 128.00 31 80.00 93.55 75.38
32 6-Nov-2002 126.65 128.00 32 80.00 81.73 68.63
33 11-Nov-02 126.80 129.00 33 78.00 94.38 70.38 125.00 138.00
34 13-Nov-2002 126.90 128.50 34 80.00 115.43 70.74
35 18-Nov-2002 126.85 128.50 35 80.00 121.29 78.02
36 20-Nov-2002 126.85 129.00 36 80.00 106.50 70.30
37 25-Nov-2002 126.85 129.50 37 80.00 111.33 73.93
38 27-Nov-2002 126.91 128.00 38 75.00 97.33 74.90
39 2-Dec-2002 126.91 128.90 39 80.00 124.74 88.10
40 9-Dec-2002 126.91 129.10 40 100.00 145.22 127.90 126.00 138.00
41 11-Dec-2002 126.80 129.11 41 80.00 108.87 76.54 125.50 138.00
42 16-Dec-2002 126.92 129.76 42 80.00 138.51 112.67 126.50 137.50
43 18-Dec-2002 126.90 128.50 43 75.00 128.84 112.54 126.50 137.50
44 23-Dec-2002 126.90 131.00 44 100.00 140.03 113.37
Total 2002 3593.00 4791.15 3549.22
Averages 126.74 130.41 81.66 108.89 80.66
2003 127.69
1 6-Jan-2003 126.97 128.65 45 100.00 140.87 104.77 126.00 137.00
2 8-Jan-2003 127.01 131.50 46 80.00 128.03 85.12 126.07 138.00
3 13-Jan-2003 127.11 129.00 47 80.00 133.56 86.36 125.15 138.00
4 15-Jan-2003 127.02 130.00 48 100.00 131.39 115.53 126.80 138.00
5 20-Jan-2003 127.13 128.50 49 80.00 151.56 84.71 126.85 138.00
6 22-Jan-2003 127.12 128.50 50 90.00 139.26 117.84 126.85 138.00
7 27-Jan-2003 127.21 129.00 51 80.00 113.05 71.80 127.26 138.00
8 29-Jan-2003 127.27 128.00 52 85.00 142.69 83.64 126.00 138.00 7.13
9 3-Feb-2003 127.36 129.50 53 95.00 160.43 79.76
10 5-Feb-2003 127.50 128.50 54 100.00 170.16 100.43
11 10-Feb-2003 127.45 130.00 55 125.00 162.65 135.74
12 17-Feb-2003 127.61 128.50 56 100.00 178.76 96.26
13 19-Feb-2003 127.76 128.50 57 100.00 175.05 106.70
14 24-Feb-2003 127.96 129.00 58 100.00 185.45 107.59
15 26-Feb-2003 127.02 130.00 59 100.00 139.69 126.21 7.65
16 3-Mar-2003 127.20 129.00 60 90.00 103.58 90.14
17 5-Mar-2003 127.20 128.80 61 85.00 113.39 79.97
18 10-Mar-2003 127.38 129.50 62 90.00 122.55 89.28
19 12-Mar-2003 127.52 129.50 63 90.00 140.86 87.18
20 17-Mar-2003 127.70 128.61 64 100.00 135.42 103.99
21 19-Mar-2003 127.30 128.70 65 100.00 108.63 104.20
22 24-Mar-2003 127.52 129.50 66 80.00 104.92 74.49
23 26-Mar-2003 127.22 128.68 67 90.00 101.17 96.54
24 31-Mar-03 127.37 129.21 68 80.00 96.52 82.30 125.50 138.00 8.19
25 2-Apr-2003 127.51 128.30 69 90.00 99.33 78.21
26 7-Apr-2003 127.10 130.10 70 95.00 108.22 94.34
27 9-Apr-2003 127.27 128.50 71 80.00 102.38 79.70
28 14-Apr-2003 127.51 129.50 72 80.00 153.80 87.02
29 16-Apr-2003 127.51 128.71 73 100.00 139.10 116.15
30 23-Apr-2003 127.66 128.50 74 120.00 143.36 118.21
31 28-Apr-2003 127.81 128.68 75 80.00 101.17 96.54
32 30-Apr-2003 127.60 129.00 76 90.00 112.36 88.70 9.43
33 5-May-2003 127.53 129.00 77 80.00 94.08 75.67
34 7-May-2003 127.62 130.00 78 80.00 105.31 91.90
35 12-May-2003 127.50 129.00 79 75.00 118.69 96.54
36 19-May-2003 127.72 129.00 80 100.00 213.91 124.51
37 21-May-2003 127.82 128.88 81 100.00 183.40 129.52
38 26-May-2003 127.82 130.00 82 100.00 163.60 124.24
39 28-May-2003 127.82 129.00 83 90.00 116.87 97.30 8.27
40 2-Jun-2003 127.72 129.00 84 90.00 101.68 85.83
41 4-Jun-2003 127.86 129.01 85 80.00 104.50 78.99
42 9-Jun-2003 127.97 128.85 86 80.00 126.70 70.53
43 11-Jun-2003 127.92 129.00 87 100.00 137.74 116.35
44 16-Jun-2003 127.92 129.00 88 100.00 186.00 125.05
45 18-Jun-2003 127.98 129.00 89 100.00 177.41 119.76
46 23-Jun-03 127.98 131.50 90 100.00 178.63 168.34
47 25-Jun-03 127.98 129.00 91 80.00 143.66 115.25
48 30-Jun-03 127.92 129.20 92 80.00 122.32 83.66 7.69
49 2-Jul-03 127.78 128.91 93 85.00 74.57 72.16
50 7-Jul-03 127.60 128.50 94 80.00 43.42 42.46
51 9-Jul-03 127.65 129.00 95 80.00 101.97 84.95
52 14-Jul-03 127.82 130.00 96 90.00 146.11 92.53
53 16-Jul-03 127.97 130.00 97 100.00 149.64 99.31
54 21-Jul-03 127.97 129.00 98 100.00 176.77 154.51
55 23-Jul-03 127.90 129.00 99 80.00 121.69 111.70
56 28-Jul-03 127.93 129.00 100 80.00 117.48 99.95
57 30-Jul-03 127.73 129.50 101 80.00 86.60 75.63 7.64
58 4-Aug-03 127.92 129.00 102 80.00 130.10 82.96
59 6-Aug-03 128.01 129.00 103 100.00 150.30 74.68
60 11-Aug-03 128.01 129.00 104 100.00 182.58 133.85
61 13-Aug-03 128.10 130.00 105 85.00 128.34 84.20
62 18-Aug-03 128.20 129.50 106 90.00 161.65 99.64
63 20-Aug-03 128.33 129.06 107 100.00 201.47 100.90
64 25-Aug-03 128.00 129.50 108 100.00 249.04 153.35
65 27-Aug-03 128.30 130.00 109 90.00 183.25 112.47
66 1-Sep-03 128.50 129.01 110 80.00 152.98 95.15
67 3-Sep-03 128.65 129.06 111 90.00 144.56 100.36
68 8-Sep-03 128.82 130.00 112 80.00 136.89 75.91
69 10-Sep-03 128.82 130.00 113 100.00 184.05 129.33
70 15-Sep-03 128.98 130.00 114 100.00 153.26 100.48
71 17-Sep-03 128.98 130.00 115 100.00 147.52 115.88
72 22-Sep-03 129.03 130.00 116 100.00 138.05 100.60
73 24-Sep-03 128.02 130.50 117 100.00 100.56 93.61
74 29-Sep-03 128.36 131.70 118 90.00 127.58 82.07
75 6-Oct-03 128.36 130.00 119 100.00 203.87 147.95
76 8-Oct-03 128.73 130.00 120 90.00 194.74 83.38
77 13-Oct-03 129.02 130.00 121 100.00 211.50 90.84
78 15-Oct-03 129.35 130.50 122 100.00 202.31 98.06
79 20-Oct-03 129.71 130.90 123 100.00 207.59 97.07
80 22-Oct-03 130.20 131.50 124 80.00 236.30 78.25
81 27-Oct-03 131.01 135.75 125 80.00 244.14 70.55
82 29-Oct-03 132.52 135.00 126 75.00 290.32 73.51 7.36
83 3-Nov-03 135.22 138.00 127 75.00 351.24 102.90
84 5-Nov-03 135.22 145.11 128 100.00 402.82 330.77
85 10-Nov-03 135.52 142.00 129 100.00 216.55 182.97
86 12-Nov-03 136.12 142.00 130 80.00 159.56 80.61
87 17-Nov-03 137.11 140.75 131 80.00 209.64 79.97
88 19-Nov-03 138.20 141.50 132 80.00 223.21 152.15
89 26-Nov-03 138.20 142.00 133 100.00 201.24 166.74 132.50 7.45
90 1-Dec-03 138.00 141.00 134 100.00 166.85 143.02 133.50 153.00
91 3-Dec-03 137.50 140.50 135 100.00 97.78 85.26 133.00 151.00
92 8-Dec-03 137.30 140.20 136 80.00 129.24 95.05 136.20 152.00
93 10-Dec-03 137.13 140.00 137 80.00 105.34 92.88 134.00 148.50
94 15-Dec-03 137.10 140.00 138 80.00 109.08 87.97 130.00 148.50
95 17-Dec-03 137.00 140.00 139 80.00 107.91 86.17 130.50 148.50
96 22-Dec-03 137.00 140.00 140 80.00 89.45 78.73 127.21 148.00 7.48
Total 2003 8690.00 14564.97 9846.30
Averages 129.27 131.18 90.52 151.72 102.57
2004
1 5-Jan-04 136.83 139.90 141 100.00 100.33 72.92 127.50 148.00
2 7-Jan-04 136.55 139.50 142 85.00 99.35 88.67 134.00 146.50
3 12-Jan-04 136.55 140.00 143 85.00 122.80 111.43 134.30 147.00
4 16-Jan-04 136.00 139.00 144 90.00 93.51 86.53 133.00 147.00
5 19-Jan-04 136.00 139.00 145 85.00 162.11 153.64 134.50 147.50
6 21-Jan-04 135.50 138.88 146 80.00 90.02 86.71 135.50
7 26-Jan-04 135.50 139.00 147 80.00 116.74 102.91 130.00
8 28-Jan-04 135.30 139.50 148 80.00 104.73 88.30 134.00 147.00
9 4-Feb-04 135.20 140.00 149 120.00 184.61 150.12 129.20 143.50
10 9-Feb-04 135.20 138.00 150 85.00 136.95 124.35 129.20 143.50
11 11-Feb-04 135.20 137.00 151 80.00 107.02 91.49 132.00
12 16-Feb-04 135.15 138.50 152 90.00 135.06 116.35 131.50 142.00
13 18-Feb-04 135.15 137.60 153 90.00 123.59 115.67 135.05 141.50 7.26
14 23-Feb-04 135.15 136.50 154 100.00 120.34 109.49 135.10 141.00
15 25-Feb-04 135.00 137.00 155 90.00 84.71 73.26 133.55 141.00
89.33 1781.87 1571.84
16 1-Mar-04 156


Figure 1A: Foreign Exchange Flows Through the CBN in the Year 2002

Figure 1B: Foreign Exchange Flows through CBN in the Year 2003

Source:  Central Bank of Nigeria


Table 3:  Sectoral Allocations of Foreign Exchange (1999 – 2004)

ITEM % Share % Share %Share %Share %Share % Share
1999 2000 2001 2002 Nov 2003 Dec 2003
A: IMPORTS 87.93 77.49 69.92 79.38 85.8 83.5
Industrial Sector 47.03 39.29 38.85 41.35 43.7 39.0
Raw Materials 29.36 26.01 23.72 24.13
Machinery 17.68 13.28 15.13 17.21
Agricultural Sector 1.51 2.48 1.59 1.87 0.8 1.1
Finished Goods 36.04 31.17 24.81 31.70 34.4 35.3
Transport 3.35 4.55 4.63 4.46 6.9 8.1
B: INVISIBLES 12.07 22.51 30.08 20.62 14.2 16.5
TOTAL 5,601.20 7,836.20 11,403.00

10,178.00

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