Nigeria’s External Reserves Surge to $42.2 Billion — Highest in Six Years Amid Oil Output Gains and FX Reforms
Nigeria’s foreign exchange buffer has reached its strongest level in more than six years, crossing the $42 billion mark despite persistent oil price volatility. Central Bank of Nigeria (CBN) data show external reserves rose to $42.225 billion as at September 25, 2025, up by about $692 million in just 18 days. The last time Nigeria recorded a similar level was September 2019, when reserves stood at $41.99 billion.
This surge is happening even though crude oil trades below the government’s 2025 budget benchmark of $75 per barrel, averaging under $70. Analysts say a combination of stronger oil output, reduced fuel imports, and improved confidence in CBN’s forex reforms have buoyed dollar inflows. “We’re seeing higher oil receipts and a much better managed NNPC, alongside increased diaspora remittances and non-oil exports,” said Dr. Muda Yusuf, former DG of the Lagos Chamber of Commerce and Industry.
According to Yusuf, the steady inflow of autonomous funds — from international money transfer operators, export proceeds and portfolio investors — reflects a more liberalised FX market and improved investor sentiment. “External loans that come in foreign currency also strengthen reserves because expenditures are in naira,” he explained, adding that a drastic drop in fuel importation has eased pressure on the forex market.
Other market watchers echo this view. Afrinvest’s research head Damilare Asimiyu noted that reserves now provide over nine months of import cover, far above the six-month threshold seen as strong in emerging markets. He attributed the build-up to resilient portfolio inflows into high-yield OMO bills, tighter speculative controls by the CBN and local supply of refined products by Dangote’s plant, which is cutting import bills. Bureau De Change operator Abubakar Ardo added that stronger diaspora remittances — encouraged by a weaker naira — are also boosting dollar supply.
CBN Governor Olayemi Cardoso recently confirmed the trend, saying gross external reserves had climbed to $43.05 billion compared with $40.51 billion at the end of July. He linked the rise to a 20.46% quarter-on-quarter expansion in oil sector GDP and reaffirmed that reforms have “stabilised the economy, restored investor confidence, and built a platform for sustainable growth.” Economists, however, caution that sustaining these gains hinges on continued oil-sector stability and prudent debt management as foreign-currency debt service obligations grow.
source: nairametrics