External Reserves Management and Economic Development in Nigeria (1980-2008)

Abstract

External reserves which are variously called International Reserves, Foreign Reserve or Foreign Exchange Reserves. In recent years, issues related to the management of external reserves have gained prominence, and reserves management practices have evolved rapidly. Effective management of foreign exchange reserves is one of the major macroeconomic objectives of countries like Nigeria. This is against the background of rapid rise and accumulated challenges currently facing many emerging economics, especially oil producing countries (CBN 2007). This paper examined the management of external reserves and economic development in Nigeria between1980-2008.The empirical result of the data analysis revealed that there is statistical significant relationship in the management of Nigerian external reserves. Hence, the need for an effective and efficient management of Nigeria's external reserves is imperative and recommended that reserve management should seek to ensure that adequate reserves are available such that risks are controlled in a prudent manner and reasonable earnings are generated over the medium to long term on the funds invested.

Keywords: External Reserves, Management, relationship, CBN, Macroeconomic variables