Nigeria’s Foreign Reserves Surge to $23.11bn

#image_title

Nigeria’s Net Foreign Exchange Reserve (NFER) reached $23.11 billion by the end of 2024, marking the highest level in over three years. This significant rise reflects improved external liquidity, reduced short-term obligations, and renewed investor confidence.

According to a statement from the Central Bank of Nigeria (CBN), the latest figure represents a remarkable increase from $3.99 billion at the close of 2023, $8.19 billion in 2022, and $14.59 billion in 2021.

NFER provides a more accurate measure of the country’s foreign exchange buffers by adjusting gross reserves to account for near-term liabilities such as FX swaps and forward contracts. Alongside this, Nigeria’s gross external reserves also grew to $40.19 billion from $33.22 billion at the end of 2023.

The CBN attributed this reserve expansion to strategic measures aimed at reducing short-term foreign exchange liabilities, notably swaps and forward obligations. The central bank also credited the improvement to policy actions designed to rebuild confidence in the FX market and enhance reserve buffers, bolstered by increased foreign exchange inflows from non-oil sources.

“This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability,” stated CBN Governor Olayemi Cardoso. “We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms.”

Despite seasonal and transitional adjustments in the first quarter of 2025, including significant interest payments on foreign-denominated debt, the CBN noted that the underlying fundamentals remain strong. The bank expects reserves to continue strengthening over the second quarter of the year.

Looking ahead, the CBN anticipates a steady increase in reserves, supported by improved oil production levels and a more favourable export environment. These factors are expected to enhance non-oil FX earnings and diversify external inflows.

“The CBN remains committed to prudent reserve management, transparent reporting, and macroeconomic policies that support a stable exchange rate, attract investment, and build long-term resilience,” the statement concluded.