One of Nigeria’s dollar sources, Foreign Direct Investment, is expected to shrink further than it did in 2019, a United Nations report predicts.
The UN trade development body, UNCTARD, said in a publication released on Tuesday that the funds sent by foreign entities to subsidiaries in other countries, would reduce by 40 per cent and drop below $1tn for the first time in a long while.
The National Bureau of Statistics (NBS) said before the Coronavirus, Nigeria’s FDI plummeted from $1.19bn in 2018 to $934.34m in 2019, a fall of 21.8 per cent.
UNCTARD said that both developing and developed economies had been hit by the pandemic likewise.
“COVID-19 has severely hit markets in developing and developed countries alike, continuing the bad run observed in the first quarter,” the report said.
The trade body noted that export orders had dropped in China, the USA and the EU bloc.
The UN agency said global commerce would fall by 27 per cent at the end of the year. This is higher than the historic low of an estimated 25 per cent endured during the 2008-2009 global economic crises.
The team at UNCTARD reckons trade fell by just five per cent in the first quarter of 2019. Most countries started locking their economies in March, before gradually lifting off restrictions in May.
As at May 12, Nigeria’s foreign reserve housed $34.78bn, $0.22bn less than the $35bn threshold that forced the CBN to push up the official forex rate to N360 to a dollar. At the end of April, the reserves had $33.44bn.