Lagos, Feb. 12, 2024 – The International Monetary Fund (IMF) says Nigeria’s foreign reserve may drop to $24 billion by the end of this year.
The reserve currently stands at about $33.12 billion.
The IMF’s prediction is contained in its latest country report for Nigeria.
It reported that the first half of 2023 witnessed a surplus in the current account, but with a notable decline in the reserve.
The IMF attributed the downturn to a decrease in hydrocarbon exports, largely due to rampant theft and a lack of investment in essential upstream infrastructure.
It also said profit repatriation from the oil sector had seen a downturn, although slightly offsetting the adverse effects on the current account.
Also, Foreign Direct Investment (FDI) in the country remains low, while there has been an uptick in portfolio outflows, including equity and Eurobond repayments as well as repatriations.
The IMF said it anticipated a challenging period for Nigeria from 2024 to 2025.
“Through 2024–25, the financial account is likely to deteriorate, with no projected issuance of Eurobonds, large Fund and Eurobond repayments of $3.5 billion, and portfolio outflows.
“Hence, despite a current account surplus, officially reported reserves are projected to decline to $24 billion in 2024 before increasing again to $38 billion in 2028 as portfolio inflows resume.” (GBN)
