The International Monetary Fund has said Nigeria’s foreign reserves may fall to $24bn in 2024.
The fund revealed this in its latest country report for Nigeria, indicating a significant drop and potential forex challenges for Africa’s largest economy.
The country’s external reserves stood at $33.12bn as of February 8.
The IMF anticipated a challenging period through 2024–25 for the country’s financial account, exacerbated by an absence of new Eurobond issuances, significant repayments of existing funds and Eurobonds totalling $3.5 billion, and continued portfolio outflows.
Despite projecting a current account surplus, the reported reserves were expected to diminish to $24bn in 2024, with a hopeful recovery to $38bn by 2028 as portfolio inflows were forecasted to pick up once again.
The report read, “Through 2024–25, the financial account is likely to deteriorate, with no projected issuance of Eurobonds, large Fund and Eurobond repayments of $3.5bn, and portfolio outflows.
“Hence, despite a current account surplus, officially reported reserves are projected to decline to $24bn in 2024 before increasing again to $38 billion in 2028 as portfolio inflows resume.”
The IMF noted that the first half of 2023 witnessed a surplus in the current account, yet there was a notable decline in reserves.
