I wrote something a few days ago about the issues with the excess crude account. I promised to say something about the foreign reserves so here it goes.
Yes the foreign reserves are falling but that just means the central bank is having to back a currency (the naira) that the market wants to devalue. That in itself is not bad. A stable currency is crucial for growth. It does highlight a worrying trend however that increased government spending ( maybe from the ECA?) is not necessarily increasing productivity but just increasing our consumption of goods from the rest of the world. I guess its all about the type of spending. 50th anniversary blowouts and thousand pound bins from the UK don’t really do anything. That, I am guessing was the argument from the Atiku camp….which was of course shot down because of the messenger.