By Omoh Gabriel, Business Editor
The Nigeria economy is facing another round of financial haemorrhage as Nigerians and corporate bodies are moving funds massively out of the country as well as from naira to dollar. In the last five weeks of January 22 2010 to 5th March, a total of $6.734 billion went out of the country. While about $1.383billion went out in the week of ending 22nd January, the amount of foreign exchange flowing out of the country rose to $1.457billion for the week ending 4th February.
Capital out flow from the country further rose to $1.740billion for the week ending 12th February and moved downward to $1.091billion for the week ending 26th and a little further down to $1.061 billion on the 5th of March. This has resulted in the crash of interest rates in the money market as customers are moving out their deposit. Bank treasurers have attributed the crash of interest rates to the ongoing CBN reforms where over N600 billion of bank deposit is in the CBN vault at 1 per cent interest rate as banks have refused to lend just as investors are holding back their investment decision. The movement of funds out of the country comes by way of Nigerian residents buying up dollars with their naira and moving it off shore.
The trend became noticeable in October 2009 where in fact in a matter of weeks several billion of dollars were purchased through the banks, bureau de change. Available figure suggest that during the five weeks period a total of $4.648 billion were purchased through the CBN Dutch auction while a total of $1.344 billion were done through direct remittance by the CBN. Of the $6.734 billion that went out of the country through official means only $100.339 million had letters of credit backing suggesting that bulk of the out flow was capital flight. The movement of funds is also in travels- business travel allowance, personal travel allowance, direct remittances etc. According to data obtained from CBN in the eight weeks the total amount of foreign exchange that went out through travels amounted to $72.067million, Debt service/payment $799.194million.
