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Nigeria’s foreign reserves have surged to $46.7 billion in a development that highlights the growing impact of the Central Bank of Nigeria’s (CBN) ongoing reforms and their direct role in strengthening the naira and stabilising the economy.

At this level, the reserves provide over 10 months of import cover and mark a significant boost to the country’s external buffers, at a time when inflation has eased to 16.05 percent in October and several macroeconomic indicators are showing renewed momentum capable of lifting businesses and positioning the economy for more sustainable expansion.

External reserves, also known as international reserves, foreign reserves, or foreign exchange reserves are defined by the International Monetary Fund (IMF) in its Balance of Payments Manual (5th edition) as external assets that are readily available to and controlled by a country’s monetary authorities. These assets can be used to directly finance balance of payments deficits, to influence the scale of such imbalances through intervention in the foreign exchange market to affect the exchange rate, and for other related policy purposes.

Nigeria has continued to experience notable improvements in key macroeconomic fundamentals, including rising external reserves, moderating inflation, narrowing exchange rate gaps, and a more stable balance of payments profile. The rise in external reserves signals strengthening investor confidence, improved policy traction, and a positive shift in foreign currency inflows.

According to the Central Bank, Nigeria’s foreign reserves at $46.7 billion now stand at their highest level since 2018, reflecting improved oil receipts, strong balance-of-payments inflows, and returning portfolio and foreign investor participation. This reserve level represents more than 10 months of import cover, providing substantial security for the country’s foreign currency needs and intervention capacity.

Olayemi Cardoso, governor of the CBN represented by Muhammad Abdullahi, deputy governor in charge of Economic Policy, made the disclosure in Abuja at the 20th Anniversary of the Monetary Policy Department (MPD). Cardoso described the reserve performance, recorded on November 14, 2025 as a milestone in the reform drive of the current leadership of the Bank. “Foreign reserves have risen to $46.7 billion, supported by sustained inflows and renewed investor participation across various asset classes,” he stated.

He linked the sharp rise to improved oil earnings, stronger portfolio inflows, and reforms that have stabilised the foreign exchange market. According to him, the naira continues to show resilience, with the spread between the official and parallel market rates narrowing to below two percent, signalling improved market efficiency and restored confidence.

The naira on Monday appreciated marginally by N2.88 as the dollar was quoted at N1,453.84 compared to N1,456.72 quoted on Friday at the Nigerian Foreign Exchange (NFEM), data from the CBN indicated.

Cardoso also noted that inflationary pressures were easing. Headline inflation slowed to 16.05 percent in October 2025 from 34.6 percent in November 2024. He described this as “seven consecutive months of disinflation and the lowest in three years,” adding that core inflation had also begun to soften.

The National Bureau of Statistics (NBS) confirmed the continued downward trend in its October Consumer Price Index report. NBS reported that inflation fell to 16.05 percent in October from 18.02 percent in September, and on a year-on-year basis was 17.82 percent lower than the 33.88 percent recorded in October 2024. However, the Bureau noted that month-on-month inflation in October was slightly higher, at 0.93 percent compared to 0.72 percent in September.

The ongoing combination of lower inflation, stronger naira performance, narrowing FX market spreads, and higher foreign reserves is reshaping Nigeria’s macroeconomic narrative. These developments, according to the International Monetary Fund (IMF), support its projection of 3.9 percent GDP growth for Nigeria in 2025 and greater foreign exchange stability.

The CBN’s sweeping reforms under Governor Cardoso, including renewed FX market transparency, policy recalibration, and measures to deepen FX supply, have been central to the changing dynamics. These are being complemented by Federal Government policies aimed at boosting local production, lowering import dependence, reducing domestic price pressures, and raising supply-side competitiveness.

Analysts note that sustaining FX reforms while expanding the country’s non-oil and oil-based FX earnings will be crucial in preserving the gains achieved so far. Cardoso emphasised that the stronger reserves position reflects a successful rebuilding of currency buffers despite ongoing market interventions, external debt servicing obligations, and previously weak oil receipts.

Looking ahead, analysts expect FX liquidity to remain robust, supported by renewed foreign and domestic interest and market confidence. Many foresee continued naira stability in the near term as reserve levels remain strong.

CBN cultivating multiple FX sources

A major pillar of the improvement in FX market confidence has been the diversification of FX inflows under the Cardoso-led CBN. The apex bank has worked to improve diaspora remittances through product development, fast-tracking licensing of new International Money Transfer Operators (IMTOs), adopting a willing-buyer, willing-seller FX model, and ensuring timely naira liquidity access for authorised operators.

These measures have dramatically simplified inflow channels, strengthened market stability, and supported the sustained build-up in gross FX reserves. With diaspora remittances estimated at $23 billion annually, the CBN expects continued growth as confidence in banking and FX reforms deepens. The institution has also stated its objective of doubling formal remittance receipts within a year.

Charlie Bird, director of Trading at Verto, explained during the Cordros Asset Management seminar titled “The Naira Playbook” that liquidity conditions have improved significantly, allowing foreign businesses, including airlines, to repatriate funds. He said Nigeria has become a more attractive destination for foreign portfolio capital as a result of policy transparency and improved dollar liquidity.

As naira rallies, import costs may fall

With the naira strengthening across FX segments, import costs are projected to ease. Nigeria’s import framework includes duties, VAT, levies, and fees calculated on CIF (Cost, Insurance, and Freight) values. As CIF-based charges often reflect prevailing exchange rates, a firmer naira can reduce effective charges.

In 2024, Nigeria imported goods valued at $40.97 billion, according to UN COMTRADE data, with China, Belgium, and India remaining major trading partners. New NBS data show that food and beverage imports reached N1.67 trillion in Q1 2025, up five percent from N1.59 trillion in Q1 2024.

Analysts at Cordros Securities note that recent naira appreciation has helped cushion the impact of rising global fuel prices triggered by Middle Eastern tensions. They added that FX liquidity will likely remain firm, supported by stable reserves, improved global sentiment, and continued inflows from foreign investors.

While Nigeria has begun advancing toward fuel import reduction, analysts caution that the country still relies significantly on imported refined products, although import costs are easing due to local refining growth and global supply adjustments.

Broader economic outlook

Stakeholders argue that the current macroeconomic gains must translate into real improvements in living standards, productivity, and job creation. Baba Musa, director-general of WAIFEM and President of the Nigerian Economic Society, said Nigeria’s 2025 outlook remains positive but requires consistency in policy implementation.

In his report, “Nigeria’s Economic Outlook at a Turning Point,” Musa observed that Nigeria is at a critical economic inflection point, optimistic but still structurally constrained. The IMF projects GDP growth of 3.9 percent in 2025 and 4.2 percent in 2026, supported by stronger oil production, reforms in the petroleum sector, and improving business conditions.

He argued that although inflation, infrastructure deficits, and unemployment remain challenges, they now represent operational policy priorities rather than limitations to growth. According to him, fiscal consolidation, monetary tightening, and reform execution have created the foundation for sustained recovery.

“The real test lies in ensuring that macroeconomic stability translates into decent jobs, rising incomes, productivity gains, and broader social welfare,” Musa said, adding that collaboration among government, private sector, civil society, and development partners will determine the durability of the recovery.

He concluded that deeper reforms, continued human capital investment, and governance consistency could help Nigeria consolidate gains and transform into a more competitive and inclusive economy.

With foreign reserves rising, inflation moderating, FX markets stabilising, and renewed capital flows returning, analysts say Nigeria now has an opportunity to entrench reforms and build a more resilient macroeconomic base provided momentum is sustained in the months ahead.