Nigeria’s External Reserves Fall by $2.67bn on Debt Repayments, Dollar Sales
Samuel Mobolaji
Nigeria’s external reserves have dropped by $2.67 billion in the first five months of 2025, declining by 6.5 per cent year-to-date, as the Central Bank of Nigeria (CBN) intensifies dollar sales and meets rising external debt service obligations.
Latest data from the apex bank revealed that gross reserves fell from $40.88 billion on January 2 to $38.22 billion as of May 12, 2025. The lowest point was recorded on April 25, when the reserves stood at $37.80 billion, reflecting sustained pressure from reduced foreign inflows and external liabilities.
FBNQuest analysts attributed the drawdown to “a combination of external debt service payments and increased forex sales by the CBN,” especially as foreign portfolio investor (FPI) participation remains weak. Turnover data from FMDQ Exchange confirmed a steep drop in FPI inflows—from N2.3 billion in January to just N0.5 billion in April.
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In April alone, the CBN injected $200 million into the official forex market to cushion naira volatility, following subdued oil prices and limited global demand for naira assets.
Although the reserves rose slightly by $163 million in early May to reach $38.10 billion on May 6, analysts warned that the gains are fragile. FBNQuest cautioned that global inflation, uncertain OPEC+ output, and weak oil price projections continue to weigh on the outlook.
The naira closed at N1,630 per dollar at the parallel market on Tuesday, while the Nigerian Foreign Exchange Market (NEFM) window recorded a closing rate of N1,600. According to Cordros Research, persistent global pressures could further strain exchange rate stability, unless reserve buffers improve significantly.
Despite the pressures, CBN Governor Olayemi Cardoso said Nigeria’s external position remains relatively resilient. Speaking during the World Bank’s Nigeria Development Update, Cardoso highlighted efforts to rebuild market confidence and improve transparency.
As of end-April, Nigeria’s external reserves were sufficient to cover 9.5 months of merchandise imports, or 7.9 months of total imports including services, based on Balance of Payments data through Q3 2024.
While modest signs of recovery are emerging, economists stress the need for stronger capital inflows and export growth to stabilise the external sector and preserve reserve adequacy.
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