Nigeria’s Foreign Reserves Drop to Record Low, Fall to $24bn in 2024 – IMF

Nigeria's Foreign Reserves Drop to Record Low, Fall to $24bn in 2024 - IMF

 

In a recent report, the International Monetary Fund (IMF) has revealed that Nigeria’s foreign reserves have reached an unprecedented low of $24 billion in 2024, dropping significantly from $33 billion the previous year. This development, highlighted in the IMF’s latest country report for Nigeria, underscores potential economic challenges for the nation, which boasts the largest economy in Africa.

Despite experiencing a surplus in the current account during the first half of 2023, Nigeria saw a notable decline in its reserves, according to the IMF. Looking ahead, the IMF predicts further deterioration in the financial account throughout 2024-25. Factors contributing to this decline include the absence of anticipated issuances of Eurobonds, substantial repayments totaling $3.5 billion for both the Fund and Eurobonds, and anticipated portfolio outflows.

The IMF report projects that despite the current account surplus, officially reported reserves are expected to continue their downward trend, reaching $24 billion in 2024. However, there is a silver lining as the reserves are forecasted to rebound to $38 billion by 2028 with the resumption of portfolio inflows.

Contrary to the IMF’s findings, data from the Central Bank of Nigeria (CBN) suggests that as of February 8, 2024, Nigeria’s foreign reserves stood at $33.12 billion.

In conclusion, Nigeria’s dwindling foreign reserves present a significant economic concern, highlighting the importance of strategic measures to stabilize and bolster the nation’s financial standing.

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