NIGERIA’s external reserves have surged to $50.45 billion, the highest level in 13 years, according to the Central Bank of Nigeria (CBN). The increase, announced by CBN Governor Olayemi Cardoso at the conclusion of the 304th Monetary Policy Committee (MPC) meeting in Abuja, is being seen as a boost to investor confidence and a sign of improved stability in the country’s foreign exchange (FX) position.

The governor noted that the current reserves are sufficient to cover approximately 9.68 months of imports, a substantial buffer that provides more room for Nigeria to manage trade and capital flows. “Next time we hope to say it is the highest in 15 years,” Cardoso added, underscoring the central bank’s forward-looking optimism.

The CBN had projected that external reserves would reach $51.04 billion in 2026. That forecast was based on expectations of easing pressures in the FX market, stronger crude oil receipts, and sustained inflows from remittances and foreign portfolio investments. The current reserves level indicates progress toward that target, reflecting a combination of tighter monetary policy, improved FX liquidity, and renewed investor confidence in Africa’s largest economy.

Analysts say that the rise in reserves is a positive signal for Nigeria’s economy, particularly for the stability of the naira and the availability of foreign currency for essential imports. “Higher reserves generally mean the central bank has more capacity to defend the currency and support external payments. It is indeed a positive development,” said a Lagos-based economist, Ms Michal Dariye.net reser

Gross or net reserves?

However, while the headline figure is impressive, important questions remain about the true strength of Nigeria’s external position. The CBN has not yet provided clarity on net external assets, which would take into account the bank’s liabilities, swaps, and obligations.

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Without this information, the gross reserves figure may overstate the actual resources available for intervention in the FX market. South African Reserve Bank reports both gross and net reserves. Its net foreign reserves rose to $71.14 billion at the end of December from $70.02 billion in November. Gross reserves increased to $75.90 billion in December from $72.07 billion in the prior month.

Egypt reports net reserves. The Central Bank of Egypt (CBE) reported in January that the nation’s net international reserves rose to $51.452 billion as of December 2025. Only Nigeria’s central bank fails to report net reserves, thereby preventing citizens, investors and economists from knowing the true state of the nation’s savings.

Moreover, while the increase reflects inflows from oil exports, remittances, and foreign investments, these sources are often volatile. Oil revenues can fluctuate sharply with global crude prices, while portfolio investments may be withdrawn quickly in response to global financial conditions. As such, sustaining reserves at current levels will require careful policy management and diversification of foreign inflows.

The broader economic context is also worth noting. Nigeria has been managing a challenging mix of inflationary pressures, debt obligations, and domestic demand for foreign currency. In this environment, the reserve buildup provides some breathing room for the government and the CBN to navigate these challenges without resorting to drastic FX interventions.

The announcement comes amid growing expectations that Nigeria’s macroeconomic outlook is improving. Stronger FX reserves may encourage foreign investors, stabilise import-dependent sectors, and potentially reduce volatility in exchange rates. However, experts caution that reserves alone are not a cure-all; sustainable growth will depend on continued reforms, export diversification, and effective management of domestic monetary conditions.

“Nigeria’s jump to $50.45 billion in external reserves is a milestone, reflecting significant progress in FX management and investor confidence. Yet, without full disclosure on net assets and a clear strategy to maintain inflows amid economic volatility, the headline figure may only tell part of the story,” said an economist, who was a member of the Monetary Policy Committee (MPC) of the CBN.