Nigeria’s External Reserves Dip as Crude Oil Prices Fall
Written by Olakunle Oke on June 2, 2025
Nigeria’s economic stability is under fresh pressure as the country’s external reserves dropped to $37.9 billion by April 2025, a 5.91% decline from $40.88 billion in January. The decline is largely driven by falling global crude oil prices and volatile production levels.
Key Economic Indicators:
Crude oil prices fell sharply by 16.74%, from $73.29 per barrel in January to $62.78 per barrel in April.
Oil production averaged 1.49 million barrels per day (bpd) in April, recovering slightly from 1.4 million bpd in March.
Nigeria’s external reserves briefly rebounded to $38.46 billion by May 29, but ongoing global uncertainties continue to pose risks.
The drop in oil prices comes amid a decision by OPEC+ to increase daily oil production by nearly one million barrels, with a further 411,000 bpd expansion planned for July. This move is contributing to oversupply fears, which could drive Brent crude prices below $50 per barrel by year-end.
What This Means for Nigeria:
A potential 10% shortfall in government revenue.
Fiscal deficit expected to widen to 6–7% of GDP.
Rising inflation due to forex supply pressure, since oil remains Nigeria’s major source of foreign exchange.
Analysts warn that unless global oil prices stabilize or alternative revenue streams are developed, Nigeria’s economic outlook could worsen. The country remains highly dependent on oil for both revenue and foreign reserves, making diversification more urgent than ever.
