Nigeria’s Foreign Reserves Surge to $23bn, Highest in Three Years

Nigeria’s net foreign exchange reserves have reached their highest level in over three years, according to new data released by the Central Bank of Nigeria (CBN).

As of the end of 2024, the Net Foreign Exchange Reserve (NFER) stood at $23.11 billion, a significant improvement from $3.99 billion in 2023, $8.19 billion in 2022, and $14.59 billion in 2021. This increase highlights stronger external liquidity reduced short-term obligations, and growing investor confidence.

NFER is widely considered a more precise measure of available foreign exchange reserves, as it accounts for near-term liabilities such as FX swaps and forward contracts.

The report also showed that Nigeria’s gross external reserves rose to $40.19 billion, up from $33.22 billion at the end of 2023. This growth is attributed to strategic policies implemented by the CBN, including a substantial reduction in short-term foreign exchange liabilities, particularly swaps and forward obligations.

The CBN stated that this improvement resulted from deliberate policies aimed at boosting confidence in the FX market and increasing reserve buffers. Additionally, enhanced foreign exchange inflows, especially from non-oil sources, contributed to the rise.

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CBN Governor Olayemi Cardoso emphasized that the increase in NFER was a direct result of intentional policy measures.

“This improvement in our net reserves is not by chance; it reflects deliberate efforts to rebuild confidence, mitigate vulnerabilities, and establish a foundation for long-term economic stability.

“We remain committed to sustaining this progress through transparency, disciplined policies, and market-driven reforms,” Cardoso said.

Reports previously indicated that Nigeria’s foreign reserves fell by $2.55 billion in the first quarter (Q1) of 2025. According to CBN data, reserves declined by 6.23 percent from $40.88 billion to $38.33 billion, marking the most significant first-quarter drop in the past five years.

In Q1 2024, reserves declined by $810.66 million (2.45 percent); in Q1 2023, the drop was $1.57 billion (4.24 percent); and in Q1 2022, the decrease was $827.34 million (2.32 percent).

However, with the latest increase to $40.19 billion, Nigeria’s reserve position has strengthened. The growth is largely attributed to a sharp reduction in short-term foreign exchange obligations, such as swaps and forwards, which previously posed liquidity risks.

Moreover, improved foreign exchange inflows from non-oil sectors and CBN’s strategic measures to restore trust in the FX market have played a key role in stabilizing and increasing reserves, ensuring more sustainable and stable inflows.