Nigeria’s gross external reserves have risen to $42 billion, the highest level in six years, according to the latest data released by the Central Bank of Nigeria (CBN). The reserves last stood at this level in September 2019.
The increase, attributed to stronger hydrocarbon export revenues and a steady inflow of foreign exchange, comes on the back of a surge recorded in August.
At that time, Nigeria’s reserves hit approximately $41 billion — the highest in nearly four years — crossing the $40 billion threshold earlier in the month.
The August milestone represented a 44-month high since late 2021.
According to the CBN, total inflows into the reserves amounted to $692.28 million in September alone.
The recent rise is providing the apex bank with greater liquidity to stabilise the Naira, manage economic shocks, and attract investment.
It is believed that the upward trend will continue, offering a buffer for currency stability and boosting investor confidence. However, they caution that persistent challenges such as high inflation, heavy debt obligations, and widespread poverty remain hurdles to long-term economic recovery.
Economic experts have repeatedly noted that higher reserves enhance the CBN’s ability to support the Naira by intervening in the foreign exchange market to prevent sharp fluctuations.
The liquidity also signals a more stable economy, potentially drawing in more foreign investment. In addition, the stronger reserves position gives policymakers more flexibility to implement economic reforms.
The improvement in reserves has coincided with gains in the local currency. The Naira appreciated by 0.91 per cent week-on-week in the official market, closing at N1,487.90 per U.S. dollar. This is the first time it has traded below the N1,500 mark since February 2025.
In the parallel market, the Naira strengthened by 1.05 per cent to an average of N1,521 per U.S. dollar.
Rising government hydrocarbon revenues, strengthened by higher oil production, have also supported the currency’s performance.
Experts have cautioned that the reserve build-up should be seen as a foundation for broader economic transformation, not an end in itself. The federal government recently took on additional debt, and while stronger reserves provide room for policy manoeuvres, underlying structural issues such as inflation and fiscal imbalances remain pressing concerns.
With reserves at their highest point in six years and crossing significant milestones in August and September, stakeholders are cautiously optimistic that Nigeria is entering a phase of relative foreign exchange stability, provided fiscal and structural reforms keep pace.
