Nigeria’s foreign exchange buffers have expanded sharply over the past two years, with net reserves rising more than sevenfold as the country overhauled its currency management framework.
- Nigeria’s net foreign exchange reserves rose 772% in two years to $34.8 billion at the end of 2025.
- The figure now exceeds the country’s total gross reserves recorded in 2023.
- CBN Governor Olayemi Cardoso attributed the surge to FX reforms and improved transparency.
- Gross reserves have continued rising in 2026, reaching $50.45 billion in February.
Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), said Nigeria’s net foreign exchange reserves climbed from $3.99 billion at the end of 2023 to $34.80 billion at the close of 2025, a jump of about 772 per cent.
For a country that has battled chronic dollar shortages, exchange rate volatility and investor scepticism, the rebound marks a significant shift in its external position.
Net reserves now exceed 2023 gross total
According to the CBN, the end-2025 net reserve figure is higher than Nigeria’s total gross external reserves of $33.22 billion recorded at the end of 2023.
Net international reserves, calculated as reserve assets minus reserve liabilities, adjust gross reserves for short-term obligations such as foreign exchange swaps and forward contracts. Analysts often regard the net measure as a more reliable gauge of a country’s ability to meet immediate external commitments.
“The improvement represents a substantial strengthening in both the level and quality of Nigeria’s external buffers over the past three years,” Cardoso said.
He added: “Nigeria’s gross and net foreign reserves showed significant improvement at the end of 2025, reflecting stronger external sector fundamentals and sustained policy reforms.”
Year-on-year gains accelerate
The central bank detailed a steady build-up over the past year. Net reserves rose from $23.11 billion at the end of 2024 to $34.80 billion by end-2025, an increase of $11.69 billion, or 50.58 per cent.
Gross reserves also expanded, climbing from $40.19 billion in 2024 to $45.71 billion at the end of 2025, a rise of $5.52 billion in one year.
In February 2026, the CBN said gross external reserves had reached $50.45 billion as of February 16, underscoring continued momentum into the new year. Central bank data show reserves rose by about 8.56 per cent between January 1 and February 25.
For context, foreign reserves are typically held in major currencies such as the US dollar and are used to finance imports, service foreign debt and cushion the domestic currency during periods of external stress.
For commodity exporters like Nigeria, where oil accounts for the bulk of foreign exchange earnings, reserve adequacy is closely watched by investors and ratings agencies.
Transparency drive and FX reforms
Cardoso attributed the rebound to reforms aimed at restoring credibility to the foreign exchange market, including steps to improve transparency and reduce distortions in currency pricing.
“These figures emphasise the benefits of increased transparency and credibility in foreign exchange management, boosting investor confidence, attracting stronger foreign exchange inflows and improving reserve management practices aimed at preserving capital, ensuring liquidity and supporting long-term sustainability,” he said.
Nigeria has in recent years dismantled multiple exchange rate windows and sought to unify its currency market, part of a broader reform push designed to attract capital inflows and ease pressure on the naira.
Cardoso said the stronger reserve position enhances Nigeria’s capacity to meet international financial obligations, stabilise the foreign exchange market and absorb external shocks.
“The improvement reflects stronger external sector fundamentals, enhanced transparency in foreign exchange management, and sustained policy reforms aimed at restoring credibility and investor confidence,” he said.
He added that the apex bank would continue to prioritise adequate reserve buffers and orderly market operations in line with its mandate.
For one of Africa’s booming economy, the sustainability of the reserve build-up, and its impact on exchange rate stability, will be closely monitored across the continent, where several central banks are pursuing similar reform-driven strategies to shore up external balances amid global financial tightening.
