Nigeria's Foreign Reserves Plummet by $1.19 Billion in Just Three Weeks.

Nigeria's foreign reserves have experienced a notable decline, decreasing by $1.19 billion within a mere three weeks under the current APC administration. This information was revealed through data from the Central Bank of Nigeria (CBN), which indicated that the external reserves fell to $39.723 billion as of January 31, 2025, down from $40.877 billion at the close of December 2024. This situation coincides with the Financial Derivatives Company (FDC), led by Bismarck Rewane, projecting a further decline in Nigeria's gross external reserves by 11.47 percent in 2025, estimating it will reach $36.21 billion, and $37.65 billion in 2026, following a peak of $40.9 billion in 2024. FDC analysts also predict that the Dollar/Naira exchange rate will average N1,586 in 2025 and N1,575 in 2026, contrasting with the average exchange rate of N1,615 recorded in 2024. The recent decrease in the nation’s foreign reserves can be linked to several factors, including obligations related to international debt servicing and the CBN's interventions in the foreign exchange market. Reports indicate that President Bola Tinubu’s administration allocated N3.5 trillion for debt servicing between July and September 2024. This information was included in data published by the Debt Management Office (DMO), which also noted that $1.338 billion was designated for external debt servicing during the same timeframe. According to the DMO's report on the country’s total public debt, the exchange rate as of September 2024 was ₦1601 per dollar. This suggests that a total of ₦2.1 trillion (calculated as $1.338 billion multiplied by ₦1601) was expended on external debt servicing from July to September. The country has secured external loans from various sources, including the African Development Bank, the Africa Growing Together Fund, the International Fund for Agricultural Development, and the Islamic Development Fund, among others.