Nigeria’s external reserves have surged to US$46.7 billion, the highest level in nearly seven years.
However, unlike previous episodes of reserve accumulation, the Central Bank of Nigeria (CBN) states that the increase was not driven by external borrowing.
Instead, the growth reflects stronger market fundamentals, improved policy credibility, and sustained economic reforms.
The CBN Governor, Olayemi Cardoso, made this known on Friday at the Chartered Institute of Bankers of Nigeria (CIBN) Annual Bankers’ Dinner, where he delivered an address on the state of the economy and progress made in monetary and financial market reforms.
Cardoso revealed that Nigeria’s current account balance rose by more than 85 per cent to US$5.28 billion in the second quarter of 2025, compared to US$2.85 billion in the first quarter, strengthening the external sector and boosting investor confidence.
He explained that foreign reserves reached US$46.7 billion by mid-November, providing over 10 months of import cover, which he described as a clear sign of economic resilience.
He stressed that the reserves were rebuilt organically through improved market functioning, stronger non-oil exports, and robust capital inflows rather than through borrowing.
According to the CBN governor, although oil production improved modestly to between 1.45 and 1.52 million barrels per day in 2025, the most significant gains have come from the non-oil sector.
Non-oil exports expanded by more than 18 per cent year-on-year, supported by reforms and a more flexible, market-driven foreign exchange system that enhanced competitiveness.
Diaspora remittances also recorded an improvement, rising by about 12 per cent in 2025 as confidence returned to official channels.
Cardoso noted that the Non-Resident Bank Verification Number (BVN) framework introduced earlier in the year is expected to further strengthen inflows in 2026 by easing participation for Nigerians abroad.
He described reforms in the foreign exchange market as one of the clearest indicators of renewed confidence in the economy.
According to him, the CBN has sustained the unification of multiple FX windows, cleared the once crippling multi-billion-dollar FX backlog, and tightened transparency rules.
He highlighted the Nigerian Foreign Exchange Code, which sets governance, ethics and transparency standards for authorised dealers, as well as the rollout of the Electronic Foreign Exchange Management System (EFEMS), powered by Bloomberg’s BMatch, noting that these initiatives have reduced opacity and manipulation, restored discipline and enabled real-time regulatory oversight.
As a result of these reforms, the naira now trades within a stable and narrow band, while the spread between official and parallel market rates has narrowed to less than 2 per cent, compared with more than 60 per cent previously.
Foreign capital inflows have risen sharply, reaching US$20.98 billion in the first 10 months of 2025.
This represents a 70 per cent increase over total inflows recorded in 2024 and a 428 per cent jump from the US$3.9 billion recorded in 2023.
Cardoso also outlined reforms in the fixed-income market undertaken in collaboration with the Securities and Exchange Commission (SEC) and the National Pension Commission (PENCOM), aimed at deepening liquidity, strengthening transparency and improving monetary policy transmission.
He reaffirmed the commitment of the CBN to maintaining a flexible exchange-rate framework and announced that a revised FX Manual would soon be unveiled to expand market participation and strengthen documentation and surveillance.
Cardoso concluded by assuring stakeholders that the Central Bank of Nigeria remains determined to protect financial stability, which is driving improved international investor confidence.
