Nigeria’s foreign reserves have experienced a sharp decline, falling by $1.19 billion within three weeks under President Bola Tinubu’s administration.
According to data from the Central Bank of Nigeria (CBN), the country’s external reserves decreased from $40.877 billion at the end of December 2024 to $39.723 billion as of January 31, 2025.
This decline aligns with projections from the Bismarck Rewane-led Financial Derivatives Company (FDC), which, in its 2025-2026 outlook, predicted that Nigeria’s gross external reserves would drop by 11.47% to $36.21 billion in 2025 and $37.65 billion in 2026, down from $40.9 billion in 2024.
FDC analysts also forecast that the Dollar/Naira exchange rate will average ₦1,586 per dollar in 2025 and ₦1,575 in 2026, compared to ₦1,615 in 2024.
The decline in foreign reserves is likely due to multiple factors, including international debt servicing obligations and the CBN’s foreign exchange interventions.
For instance, SaharaReporters revealed that President Tinubu’s administration spent ₦3.5 trillion on debt servicing between July and September 2024.
Data from the Debt Management Office (DMO), reviewed by SaharaReporters, indicated that $1.338 billion was allocated to external debt servicing during this period.
The government also noted that the exchange rate stood at ₦1,601 per dollar in September 2024, meaning approximately ₦2.1 trillion was used for external debt servicing.
Nigeria’s external loans came from institutions such as the African Development Bank, Africa Growing Together Fund, International Fund for Agricultural Development, and the Islamic Development Fund.
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