Economy
Nigeria’s external reserves hit 18-year high at $53.99b
By Oluwayanmife Lucas
Nigeria’s external reserves have reached an 18-year high of $53.99 billiion on September 2. The reserves position puts the naira on course for its best year since 2018 ahead of FTSE Russell reinclusion on September 21.
According to data from the Central Bank of Nigeria (CBN), external reserves were at $53.1 on August 24. The current reserves position is far higher that CBN’s projected $51.04 billion year-end target, and will cover over 12 months import for the economy.
Nigeria’s external reserves, which provide the CBN with the capacity to support the local currency and meet external obligations, have continued to rise steadily. Further analysis showed that the liquid portion of the external reserves stood at $52.5 billion.
Brent crude yesterday traded around $95.5 per barrel—above Nigeria’s 2026 federal budget benchmark of $64.85—the price rebound would largely bolster the country’s fiscal revenues.
As an oil exporter, Nigeria continues to earn more petrodollars and to support naira stability ans bolster external reserves.
In its economic projections for 2026, the CBN targeted stronger oil earnings, foreign exchange market reforms and improved external capital inflows to achieve year-end reserves target.
Analysts said the current reserves position reinforces the steady growth in Nigeria’s external buffers.
The founder/Chief Executive Officer of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, earlier 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 forex reforms, fuel subsidy etc. It is these reforms that have brought about stability”.
CBN data sfurther showed that Nigeria’s external reserves maintained a steady upward surge in recent months.
The reserves started June at $49.80 billion and crossed the $50 billion mark by June 5, reaching $50.12 billion.
On June 15, reserves had increased further to $50.81 billion before rising to current position. The reserves stood at $51.9 billion on July 31, and contrinued.
The sustained increase reflects stronger foreign exchange inflows and improved liquidity conditions in the country’s external sector.
The CBN Governor Olayemi Cardoso, said: “This strong buffer continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability.”
The CBN’s decision to clear over $7 billion unsettled FX backlogs raised investors’ confidence in the economy, supporting dollar inflows and foreign reserves accretion, Cardoso said.
The CBN boss had explained that although he had no idea where the fund for the backlog clearance would come from, when he assumed office, but he believed it was the right thing to do, and gave investors his word.
He said: “Credibility is at the heart of any central bank. If you don’t have credibility, people do not trust you and they do not invest in your economy. When I took office, I made a promise we would pay the backlog, the verifiable backlog of monies that were owed by Nigeria to third parties.”