Nigeria’s Foreign Reserves Cost Over $10 Billion Annually According to Former Fidelity Bank Chairman

He explains that the reserves earn only 3 percent annually from liquid assets held abroad, while the naira used to fund them costs 20 percent.

Chike-Obi emphasizes that the $52-$53 billion reserves currently cost Nigeria an average of 17 percent annually. He argues that the cost of maintaining reserves must be weighed against their benefits, noting that a larger stock does not automatically improve Nigeria’s economic position.

He clarifies that the statement suggesting bigger reserves mean Nigerians feel better off is inaccurate. The dollars must be invested in liquid instruments held abroad to maintain their value, which First Bank London and Zenit Bank London hold.