The Central Bank of Nigeria (CBN) has warned that removing fuel subsidies, higher import bills, and increased external debt payments could negatively impact the growth of external reserves by 2024/2025.
This was stated in their Monetary, Credit, Foreign Trade, and Exchange Policy guidelines for the fiscal years 2024/2025.
Despite these risks, CBN projects positive economic growth for Nigeria in 2024/2025. This optimism is based on continued support for agriculture and oil sectors, foreign exchange market reforms, and the effective implementation of the Finance Act 2023 and the 2022-2025 Medium-Term National Development Plan (MTNDP).
CBN expects favorable trade terms, higher crude oil prices, and improved domestic oil production to boost the external sector. However, lower oil earnings, subsidy removal, rising import costs, and increased debt servicing could pose challenges.
