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CBN Governor, Olayemi Cardoso had, in the apex bank’s 2026 Macroeconomic Outlook for Nigeria, projected that Nigeria’s external reserve would rise to $51.04 billion in 2026, supported by stronger oil earnings, foreign exchange (FX) market reforms, and improved external inflows.

The apex bank said the outlook reflects higher oil revenues, increased bond issuance, sustained diaspora remittances, FX market reforms, and expanded domestic refining capacity.

The CBN stated, “The external reserves is projected at US$51.04 billion in 2026, compared with US$45.01 billion in 2025. The external reserves is expected to be boosted by reduced pressure in the FX market based on the anticipated rise in oil earnings, sovereign bond issuance, and diaspora remittance inflow.’’

Naira soars across markets

The domestic currency had a positive trading performance in recent the week as the Naira strengthened against the dollar at the parallel and official windows to exchange at N1,380.00/$1.00 and N1,347.32/$1.00 respectively.

In emailed note to investors, Managing Director, Afrinvest West Africa Limited, Ike Chioke, said naira will trade in similar band next week, as the currency fundamentals remain bullish in the short-medium term, underpinned by CBN’s continued liquidity boost and improved activities with strategic domestic oil refining.

The benchmark Brent Crude Oil price advanced week-on-week to settle at $72/bbl, driven by renewed war between Washington and Tehran.

The war in the Middle East lifted oil prices as market feared a potential supply disruption via the Strait of Hormuz (a key route for global oil flows).

President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said the naira has remained stable across market for several months, ending years of volatility in the market.

Additionally, Managing Director of Financial Derivatives Company (FDC), Bismarck Rewane, estimated the fair value of the naira at about N1,257 to the US dollar.

Rewane posits that the local currency is undervalued by approximately 11 per cent when assessed using the purchasing power parity (PPP) model.

Rewane made the submission during his keynote address at the 2026 Economic Outlook organised by the Association of Corporate Treasurers of Nigeria (ACTN), where he anchored the session and offered a detailed analysis of the structural and cyclical factors influencing Nigeria’s exchange-rate movements.

He noted that currencies typically converge towards their PPP-implied values over a five-year horizon.

According to him, the appropriate exchange rate based on current PPP estimates stands at N1,256.79 to the dollar, reinforcing the view that the naira remains below its fair valuation level.

The founder/Chief Executive Officer of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, hinted at a positive outlook for Nigeria’s external reserves as he does not see anything derailing the forex and fiscal reforms that have brought about stability and improvement in external reserves.

Yusuf said, “Well, the outlook for me is positive because I don’t see anything derailing these reforms [forex reform, fuel subsidy etc]. It is these reforms that have brought about stability. And it’s this stability that has inspired confidence. It is the confidence that has allowed the improvement in the reserves. The reserves are not so much coming from oil, though. I don’t have the full breakdown. But my sense is that the reserves are coming from largely outside the oil – FDI, portfolio, diaspora flows, non-oil exports etc. Quite a lot is happening outside traditional sources of forex.

‘’So, those things are anchored on reforms. For as long as that is happening and I don’t see that changing, even with the so-called election year or whatever, I don’t see anything changing that in any drastic way.’’

Other analysts said the growth in the external reserves can only be sustained in 2026 if the Central Bank of Nigeria (CBN) avoids excessive FX intervention, fiscal authorities are restrained from spending pressures and the FX reforms are not reversed.

They said, ‘’Historically, election cycles in Nigeria tend to introduce policy uncertainty, FX demand pressure, and capital flow reversals. So, while reserves can be sustained in the short term, maintaining this momentum throughout an election year will depend on discipline.

Other analysts have also acknowledged the remarkable performance of Nigeria’s external sector supported by higher export earnings and increased remittance inflows.

Nigeria’s external sector, evidenced by the robust accretion to foreign exchange reserves, is supported by higher export earnings and increased remittance inflows. This has contributed to greater stability in the foreign exchange market and bolstered investor confidence.

Nigeria has been recording a significant increase in the external reserve, with the current position seen as the highest level in like 13 years.

Basically, the Cardoso mentioned that it was now above $50 billion. It is also important to note that higher remittance inflow from diaspora transfer through IMTOs, families sending money from overseas, has boosted the availability or supply of foreign exchange and strengthened the balance of payment surplus. Workers’ remittance according to CBN data for nine-month 2025 is $15.466 billion.

External remittance also boosted the external reserve from crude oil export receipts, agricultural and manufactured goods exports.

Exchange rate reforms

The CBN had embarked on a series of bold reforms to attract more foreign capital to the economy, achieve price and exchange rate stability.

In 2023, the new administration and the CBN liberalised the foreign exchange market, stopped central bank financing of the fiscal deficit, and reformed fuel subsidies. The government also strengthened revenue collection and took strategic steps to reduce surging inflation rate.

Since these reforms were implemented, international reserves have increased, and people can now access foreign exchange in the official market.

Besides, Nigeria successfully returned to international capital markets last December and was recently upgraded by rating agencies. A new domestic, private refinery is positioning Nigeria up the value chain in a fully deregulated market.

CBN’s policies, including the currency reforms, led to investment inflows from abroad, and reduced interventions in the domestic forex market.

The unification of exchange rates and the clearing of over $7 billion FX backlog raised the country’s investment outlook, with multilateral organizations, like the World Bank describing it as bold intervention to improve the economy’s sustainability in the long run.

Also, Nigeria’s sovereign risk spread has fallen to the lowest level since January 2020, erasing the premium accumulated during the pandemic and subsequent strain on its economy. All these are deliberate efforts to woo investors and sustain capital inflows to the economy.

In its efforts to tame inflation, the CBN recently hosted the Monetary Policy Forum, featuring fiscal authorities, legislative, private sector, development partners, subject-matter experts, and scholars with the theme: “Managing the Disinflation Process.” The forum is a major push to improve monetary policy communication, foster dialogue, and collaborate on critical issues shaping monetary policy.

During the event, Cardoso explained that the apex bank’s focus is to sustain price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship. He said the apex bank is continuing its disciplined approach to monetary policy, aimed at curbing inflation and stabilising the economy. Cardoso reiterated that the goal of the CBN is to ensure that monetary policy remains forward-looking, adaptive, and resilient.

In addressing our economic challenges, collaboration is key: “Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence. Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” Cardoso said.

The CBN also focused on strengthening the banking sector, introducing new minimum capital requirements for banks (effective March 2026) to ensure resilience and position Nigeria’s banking industry for a $1 trillion economy. These reforms and developments reflect the Bank’s commitment to creating an enabling environment for inclusive economic development.

However, achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance. “As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability,” Cardoso stated.

Continuing, he said monetary policy easing became necessary following a review of macroeconomic developments.

According to him, the decision by the MPC to ease the policy stance was made in the light of improving inflation trends. “The committee’s decision to lower the monetary policy rate was predicated on the sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025 and the need to support economic recovery efforts,” Cardoso said.

Nigeria’s assets gain ground

Global investors are scrambling for Nigerian assets as the impact of the reforms in the financial sector spreads to key segments of the economy.

Nigeria is getting favourable nod from investors, as seen in the successful issuance of $2.25 billion in a dual-tranche Eurobond.

The Eurobonds maturing in 2036 and 2046, marks the largest-ever orderbook achieved by the country and underscoring strong investor confidence in its macroeconomic policies and fiscal management.

The 10-year, $1.25 billion bond, maturing in 2036, was priced at a coupon of 8.6308 percent, while the 20-year, $1.10 billion note due in 2046, carried a coupon of 9.1297 percent.

The transaction, concluded last week, attracted orders exceeding $13 billion, reflecting broad-based demand from investors across multiple jurisdictions, including the United Kingdom, North America, Europe, Asia, and the Middle East, the Debt Management Office (DMO) said in a statement.

Director General, Debt Management Office (DMO), Patience Oniha, said the issuance attracted demand from a combination of fund managers, insurance and pension funds, hedge funds, banks and other financial institutions, underlining the country’s strong support base across geography and investor class.

She said: “Nigeria’s ability to access the Eurobond Market to raise long term funding needed to support the growth agenda of President Tinubu is a major achievement for Nigeria and is consistent with the DMO’s objectives of supporting development and diversifying funding sources”.

Before the issuance, Nigeria’s investment image gad soared, prompting positive feedback from global analysts.

“Nigeria appears to be back in business as long-awaited economic reforms take shape,” said Emre Akcakmak, portfolio manager at East Capital. Key measures include improved currency liquidity, leeway for investors to repatriate their profit, and the stable naira. “We feel the Central Bank of Nigeria will continue to stem any sharp appreciation of the naira to limit profit taking from the fast money community,” Akcakmak said.

Nwadike, a financial analyst, writes from Abuja