Nigeria’s FX Reserves Rise by $4.39bn in One Year on CBN Reforms, Investor Confidence
Nigeria’s external reserves rose by $4.39bn over one year, reflecting a notable turnaround in the country’s foreign exchange position amid ongoing economic reforms. Data from the Central Bank of Nigeria (CBN) show that reserves climbed from $40.85bn on December 23, 2024, to $45.24bn on December 23, 2025, representing a growth of about 10.75 per cent. Despite periods of volatility, the reserves have sustained an overall upward trend in recent months.
The year began on a challenging note as Nigeria grappled with heavy foreign debt-servicing obligations. External reserves closed 2024 at $40.87bn before slipping to $39.72bn in January 2025 and falling further to $37.93bn by April. According to the CBN, these declines were largely due to seasonal adjustments and significant interest payments on foreign-denominated debt, with $816m spent on debt servicing in January and February alone.
Pressure persisted through the first half of the year, with reserves dipping to $37.21bn in June, reflecting the impact of debt payments and CBN interventions in the foreign exchange market. However, a steady recovery followed in the second half as reserves rebounded to $39.35bn in July, crossed the $40bn mark in August, and continued climbing through September and October. By November, reserves had reached $44.66bn, before closing at $45.24bn in December after minor pullbacks.
CBN Governor Olayemi Cardoso attributed the recovery to deliberate policy actions, including clearing the FX backlog and strengthening transparency in the foreign exchange market. Speaking at the inaugural CBN Governor Annual Lecture Series in Lagos, Cardoso emphasized that credibility and consistency were key to restoring investor trust. “People invest when they see credibility and transparency,” he said, noting that policy discipline played a major role in boosting reserves.
Analysts say the stronger reserve position is positive but caution against complacency. Financial Derivatives Managing Director Bismarck Rewane noted that part of the accretion came from Eurobond issuances, while Afrinvest Research highlighted that reserves reached a multi-year high of about $45.4bn in December, offering nearly 11 months of import cover. Still, analysts warn that pre-election uncertainties and global risks could influence investor sentiment going forward, underscoring the need for sustained reforms to keep Nigeria’s FX buffers strong.
Source: Punch