Nigerian fx reserves down 23 pct from year ago

Nigeria's foreign exchange reserves inched up to $33.4 billion by mid-December from $33.1 billion two weeks earlier, but remain 23 percent down on a year ago, the central bank said on Thursday.

President Goodluck Jonathan said in his 2011 budget presentation to parliament on Wednesday that the reserves "remain comfortable", but analysts and diplomats have voiced alarm at their depletion from around $43.4 billion a year ago.

Nigeria's public finances are under scrutiny in the run-up to presidential, parliamentary and state governorship elections next April. The country's budget deficit is expected to top 6 percent this year and it has spent billions of dollars of windfall oil savings.

Jonathan promised greater fiscal responsibility in the 4.2 trillion naira 2011 budget plan, which represents an 18 percent decrease on total approved spending for this year.

Opponents have accused his administration of profligacy.

The central bank noted in a financial review of the second quarter published this week that the number of months of imports the reserves could cover had been falling rapidly from around 18 months in early 2009 to nearer six months a year later.

"This is not a good development for the country as it is likely to induce a chronic balance of payments problem ... especially with the challenge of high cost of production not being seriously tackled by the government," the review said.

Chinelu do you know that I didnt understand all the deductions and the jargon in my pay slip while employed? I just looked at the balance and worked with it. But this is serious. Can un -jargon it for me?