News
CBN not happy over debt servicing as FX reserves drop $2bn
Nigeria’s gross foreign exchange reserves fell by $2.57bn from January to March 2025, marking a 6.29 per cent decrease over the three-month period.
This was revealed in external reserves data available on the website of the Central Bank of Nigeria.
Earlier this week, the CBN attributed the decline in the country’s foreign exchange reserves during the first quarter of 2025 to the burden of foreign debt servicing.
On January 2, 2025, Nigeria’s foreign exchange reserves stood at approximately $40.88bn but dropped to $39.72bn by the end of the month.
By the end of February, the reserves fell further to $38.42bn, representing a decline of $1.3bn within one month, equivalent to a 3.27 per cent decrease.
The downward trend continued into March as the reserves dropped to $38.31bn by the end of the month. This represents an additional reduction of $110m, translating to a 0.29 per cent decline compared to the previous month.
The combined month-on-month decreases led to a total quarterly drop of $2.57bn, representing a cumulative decline of 6.29 per cent over the first quarter of 2025.
Despite the strong reserves position at the end of 2024, the first quarter of 2025 witnessed a reversal, primarily driven by the need to service foreign debts.
The CBN noted that the first quarter figures reflected seasonal and transitional adjustments, including significant interest payments on foreign debt.
These obligations have been a consistent pressure point, leading to a drawdown of reserves despite the improvements observed in the preceding quarter.
In a statement, the CBN said, “Reserves have continued to strengthen in 2025. While the first quarter figures reflected some seasonal and transitional adjustments, including significant interest payments on foreign-denominated debt, underlying fundamentals remain intact, and reserves are expected to continue improving over the second quarter of this year.”
Data from the CBN revealed that Nigeria’s total debt service payments amounted to $540m in January 2025 and $276m in February 2025.
This means that a total of $816m was spent on foreign debt servicing in the first two months of the year.
The significant outflow in January was attributed to scheduled foreign debt repayments, creating substantial pressure on the reserves.
The reduction in February’s debt servicing to $276m provided some respite, but high debt obligations continued to weigh on reserve levels.
Despite the decline in the first quarter, the CBN remains optimistic about a rebound in reserve levels as oil production improves and non-oil FX earnings are expected to rise.
The apex bank expressed confidence that improved oil production levels and a more supportive export growth environment would boost non-oil FX earnings and diversify external inflows.
The bank has reiterated its commitment to prudent reserve management, transparent reporting, and macroeconomic policies that aim to stabilise the naira, attract investment, and build long-term economic resilience.
According to him, such financial mishandling not only disrupts critical public services and projects but also results in major losses to the nation’s purse—resources that could have been channelled into crucial services and developmental efforts, as laid out in Section 14(2)(b) of the Constitution.
Speaker Abbas, thereafter setup a Special Committee to be chaired by Rep. Chinedu Martins to immediately launch a probe into the “Utilisation of take-off grants, bailout funds, and interventions allocated to MDAs, government institutions, and GOEs from 2015 to present.”
The FCT Minister, Mr. Nyesom Wike, expressed satisfaction with the progress on the Abuja light rail project, reaffirming its May 29 delivery as sacrosanct.
He made these assurances after inspecting the ongoing construction of access roads to the train stations on Wednesday, from Metro Train Station in the Central Area to Nnamdi Azikiwe International Airport, Abuja.
Reassuring journalists accompanying him, the minister reiterated that President Bola Tinubu would commission the rail project on May 29 to mark his second year in office.
The visited stations were Wupa station near Idu and Bassanjiwa station near the airport.
“This is part of our routine inspection of ongoing projects to see the contractors’ progress,” Wike explained.
“We are working day and night to fulfill our promise to President Tinubu and FCT residents. By May, Mr. President will ride on the Metro line.”
Gunmen suspected to be Fulani herdsmen are currently invading some communities in the Ukum Local Government Area of Benue State.
According to sources, the herdsmen armed with AK-47 rifles stormed the community around 04:15pm on Thursday.
“Our lives are in danger this evening, armed Fulani herdsmen, about 600 in numbers have taken over our communities this evening,” a resident told SaharaReporters.
“They’re currently moving around towns in Ukum Local Government Area of Benue state. No security personnel at all, Governor Alia didn’t send security, they said operation will start soon once they (herders) have observed the place.”
The insecurity situation in Benue has been alarming in recent weeks with attacks from gunmen suspected to be herdsmen.
The media had reported that suspected herdsmen again unleashed terror in Benue State, attacking three communities in Otukpo Local Government Area (LGA) on Wednesday, just a day after 11 people were killed in a deadly raid on Otobi community.
The latest victims of the escalating violence were Emichi, Odudaje, and Okpamaju, communities that had previously suffered an attack in February, which left five people dead.
However, the renewed attack has created fear and mass displacement among residents, with women and children fleeing to safety.
Local sources say the death toll from the fresh attack remains unclear, but several casualties are feared.
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