•• APEX Bank hails “significant strengthening” of external buffers
Nigeria’s net foreign-exchange reserves leapt to $34.8 billion at the end of 2025, a 772 percent jump from the $3.99 billion recorded at the end of 2023, the Central Bank of Nigeria (CBN) said this week, describing the rebound as a “fundamental improvement in reserve quality.”
In a statement and during the Monetary Policy Committee (MPC) briefing, Governor Olayemi Cardoso said the build-up came from “stronger external sector fundamentals and sustained policy reforms,” such as the unification of exchange rates, clearer reporting and tighter reserve management. Gross external reserves, he added, reached about $50.45 billion on 16 February 2026—matching a 13-year high—and the CBN’s 2026 projection is roughly $51 billion.
“The expansion highlights Nigeria’s enhanced capacity to meet external obligations, support exchange-rate stability and reinforce overall macroeconomic resilience,” Cardoso said. The 2025 net figure alone tops the $33.22 billion gross reserves held at the end of 2023.
Drivers of the build-up
– Market reforms, especially the merger of multiple FX windows
– Higher oil export earnings and a smaller trade deficit
– Record diaspora remittances
– Sovereign Eurobond and other hard-currency issues
– Rising non-oil exports
– Increased domestic refining that trims fuel imports
“Net reserves rose more than 700 percent; that scale of growth follows directly from the rate unification,” said Dr. Paul Alaje, senior partner at SPM Professionals. He said the MPC’s refusal to rush rate cuts, which could spook investors, helps safeguard the gains.
What the gains mean
A thicker reserve cushion lets the CBN:
– Pay external debt on time
– Intervene in the FX market without draining liquidity
– Keep the naira’s swings within a tolerable band
It also signals lower sovereign risk, which portfolio managers like; more foreign inflows could follow, easing pressure on the naira and creating room for gradual monetary easing—if inflation and the fiscal side cooperate.
Caveats and risks
Economists warn the headline figure is only a first glance.
Composition: over a third of the gross figure sits in borrowed funds, currency swaps and bank dollar deposits at the CBN, so the portion the Bank can deploy at will is smaller than the top line suggests.
Oil still rules: export receipts hinge on production, sabotage repairs and global prices—none of which policymakers control.
Capital flows: in the event of a US rate spike or domestic shock, portfolio money can exit quickly.
Valuation effect: the naira’s own slide inflates the dollar value of CBN’s euro and yuan assets, overstating the “real” rise.
Policy fatigue: further reforms—clearing FX backlogs, loosening import bans, and letting the Importers & Exporters window price clear—must keep pace or risk reversing the inflow tide.
“In short, the buffers look sturdier than two years ago, but they remain fragile,” said one Lagos-based analyst. “Hold the champagne until the oil market, fiscal discipline and continuing reforms show they can keep those numbers climbing in 2026.”
