Dele Oye Faults Chike-Obi, Says Nigeria Not Losing $10bn on Foreign Reserves
Insists foreign reserves not ordinary savings, but protection against disruptionsAdmits Nigeria needs more rigorous assessment of cost of maintaining reservesCalls for transparent reserve adequacy benchmarks, quarterly disclosures Emmanuel Addeh in AbujaThe
Dele Oye, Chairman of the Alliance for Economic Research and Ethics (AERE), has challenged claims that Nigeria is losing more than $10 billion annually due to the holding of foreign reserves. Oye argues that the calculation of this loss does not adequately account for various factors such as different currencies, financing arrangements, and associated risks.
He asserts that while the cost of maintaining these reserves should be subject to rigorous economic scrutiny, subtracting an estimated 3 percent return on foreign assets from an assumed 20 percent naira funding cost does not establish the Central Bank of Nigeria’s (CBN) actual cost. Oye calls for a more rigorous assessment of the cost of maintaining reserves, the risks they protect against, and the optimal amount Nigeria should hold to withstand external shocks.
He emphasizes that the actual cost of reserve accumulation should be measured against the protection these assets provide in various scenarios, rather than being treated as a simple loss of $10 billion.
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