Nigeria’s external reserves drop by $2.46bn in two months
As the Central Bank of Nigeria (CBN) continued to defend the naira at the foreign exchange market, Nigeria’s external reserves dropped by $2.46billion between January and February 2025.
The external reserves that closed 2024 at $40.88 billion, dropped by $2.46 billion to $38.42 billion as of February 28, 2025.
According to CBN data, the external reserves had dropped by $1.15 billion January 2025 to $39.72 billion and closed February 2025 at $38.42 billion, after dropping by $1.18 billion from $39.6billion it opened in the month under review.
Beyond any form of intervention that the CBN might be doing to support the naira, manage exchange rate volatility and inject liquidity into the official foreign exchange market, the government’s continued reliance on the reserves to fund critical imports and service external debt obligations likely contributed to the decline. Nigeria remains heavily dependent on imports for industrial goods and food supplies, requiring significant foreign exchange outflows to meet these demands.
The situation is further complicated by fluctuations in oil revenue, which remains Nigeria’s primary source of foreign exchange earnings. Despite a recent rebound in crude oil prices, production challenges, pipeline vandalism, and oil theft have affected the country’s ability to maximize earnings from its oil sector. This has constrained the ability to build up external reserves.
The CBN governor, Mr. Olayemii Cardoso at the last Monetary Policy Committee (MPC) meeting stated that the external reserves remained robust at $39.4 billion as of 14 th February 2025, translating to an import cover of 9.6 months for goods and services. I
“In addition to this, the Balance of Payments has remained strong with a positive current account balance of US$6.06 billion as at the end of the third quarter of 2024,” he added.
