Nigeria’s net FX reserves surge to $23.1 billion, highest in 3 years

Nigeria’s Net Foreign Exchange Reserve (NFER) has surged to $23.11 billion, its highest level in over three years, according to a statement released by the Central Bank of Nigeria (CBN) on Tuesday.

Net Foreign Exchange Reserve (NFER) is the portion of a country’s foreign exchange reserves that remains after deducting short-term liabilities such as FX swaps and forward contracts. It represents the actual reserves available for meeting immediate external obligations.

The latest figure marked a sharp rise from $3.99 billion at the end of 2023, showing improved external liquidity, reduced short-term obligations, and renewed investor confidence.

The NFER, which accounts for near-term liabilities such as FX swaps and forward contracts, stood at $8.19 billion in 2022 and $14.59 billion in 2021. Meanwhile, gross external reserves rose to $40.19 billion, compared with $33.22 billion at the close of 2023.

The CBN attributed the reserve growth to strategic policy measures, including a deliberate reduction in short-term FX liabilities and efforts to restore confidence in the foreign exchange market. Increased FX inflows, particularly from non-oil sources, also contributed to the improvement.

CBN Governor Olayemi Cardoso emphasised that the reserves’ growth resulted from intentional policy decisions.

“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,” he said.

Despite seasonal and transitional adjustments in the first quarter of 2025—such as significant interest payments on foreign-denominated debt—the CBN noted that the underlying fundamentals remain strong. The bank expects further reserve growth in the second quarter of the year.

“We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms,” Mr Cardoso added.

The CBN projects a steady rise in reserves, driven by improved oil production and a more favourable export environment expected to boost non-oil FX earnings.

It reaffirmed its commitment to prudent reserve management, transparent reporting, and macroeconomic policies aimed at stabilising the exchange rate, attracting investment, and strengthening Nigeria’s economic resilience.

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Nigeria’s rising net reserves mark an improvement from recent liquidity challenges. The country grappled with chronic FX shortages in previous years, exacerbated by a heavy reliance on oil revenue, capital flight, and policy uncertainty.

By 2023, dwindling reserves forced the CBN to clear a backlog of FX forwards, leading to a sharp naira depreciation.

The latest reserve build-up indicates a more stable external position.