Nigeria’s foreign reserves have suffered a significant drop, dropping by $1.19 billion in just three weeks under President Bola Tinubu’s administration.
This was disclosed in data obtained from the Central Bank of Nigeria (CBN), stating that the external reserves dropped to $39.723 billion as of January 31st 2025, from $40.877 billion at the end of December 2024.
The development comes as the Bismarck Rewane-led Financial Derivatives Company, FDC, in its 2025-2026 outlook, expects Nigeria’s gross external reserves to drop by 11.47 per cent in 2025 to $36.21 billion and 2026 at $37.65 billion from a high of $40.9 billion in 2024.
The FDC analysts also expect that the Dollar/Naira exchange rate will average N1,586 in 2025 and N1,575 in 2026, as opposed to the average exchange rate of N1,615 in 2024.
This recent drop in the country’s foreign reserves may be attributed to various factors, including international debt servicing obligations and the CBN’s foreign exchange interventions.
For instance, SaharaReporters Newspaper reported how President Bola Tinubu’s administration spent N3.5 trillion on debt servicing between July and September 2024.
This was contained in data released by the Debt Management Office, and reviewed by SaharaReporters. The data also indicated that $1.338 billion was allocated to external debt servicing during the same period.
The government, in the DMO data announcing the country’s total public debt, noted that the exchange rate as of September 2024 stood at ₦1601 per dollar. This implies that a total of ₦2.1 trillion ($1.338 billion multiplied by ₦1601) was spent on external debt servicing between July and September.
The country took loans externally from sources such as the African Development Bank, the Africa Growing Together Fund, the International Fund for Agricultural Development, Islamic Development Fund among others.
