Nigeria’s Net Foreign Exchange Reserves Soar to $23.1 Billion, Highest in Three Years

Nigeria’s Net Foreign Exchange Reserve (NFER) has reached a significant milestone, surging to $23.1 billion, the highest level in over three years. This surge represents a sharp recovery from a low of $3.99 billion at the end of 2023. The NFER, which reflects reserves after deducting short-term liabilities, signals an improvement in the country’s external liquidity, reduced short-term obligations, and growing investor confidence. Gross external reserves also rose to $40.19 billion, up from $33.22 billion at the end of 2023.

The Central Bank of Nigeria (CBN) attributed the growth in reserves to a series of strategic policy measures, including the reduction of short-term FX liabilities and efforts to restore confidence in the foreign exchange market. Additionally, increased foreign exchange inflows, particularly from non-oil sources, have played a key role in the improvement. CBN Governor Olayemi Cardoso emphasized that the surge in reserves was the result of deliberate policy actions aimed at ensuring long-term stability and rebuilding confidence.

Despite challenges such as interest payments on foreign-denominated debt, the CBN remains optimistic about further growth in reserves. The bank expects to see additional increases in the second quarter of 2025, driven by better oil production and a favorable export environment. Cardoso underscored that maintaining transparency, discipline, and market-driven reforms would be central to sustaining the progress.

This reserve buildup represents a stark contrast to Nigeria’s recent struggles with foreign exchange shortages and heavy reliance on oil revenues. The country faced significant liquidity issues, with a sharp depreciation of the naira in 2023 following the clearing of a backlog of FX forwards. However, the current growth in reserves signals a more stable external position, improving Nigeria’s economic resilience and outlook.