…Signals Renewed Investor Confidence, Stronger External Liquidity
By Anthony Emeka Nwosu
The Central Bank of Nigeria (CBN) has announced a significant surge in the country’s Net Foreign Exchange Reserve (NFER), marking its highest level in over three years. This development underscores renewed investor confidence, enhanced external liquidity, and a substantial reduction in Nigeria’s short-term foreign exchange obligations.
According to the apex bank, Nigeria’s NFER stood at $23.11 billion as of the end of 2024 — a remarkable leap from $3.99 billion recorded at the close of 2023. In contrast, NFER figures were $8.19 billion in 2022 and $14.59 billion in 2021. The NFER metric, which adjusts gross reserves by accounting for near-term liabilities such as FX swaps and forward contracts, is considered a more accurate measure of a country’s foreign exchange buffer available to meet immediate external demands.
In parallel, gross external reserves also improved, rising to $40.19 billion from $33.22 billion recorded at the end of 2023.
The CBN attributed the rise to strategic policy initiatives, particularly the deliberate reduction of short-term FX liabilities and a renewed push for transparency and investor confidence in Nigeria’s FX market. Additionally, the country witnessed improved foreign exchange inflows from non-oil sources, which further bolstered the reserve position.
“This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability,” said Mr. Olayemi Cardoso, Governor of the Central Bank of Nigeria.
He added, “We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms.”
The CBN noted that the positive trend has extended into 2025, despite some seasonal and transitional adjustments in the first quarter, including interest payments on foreign-denominated debts. The bank, however, maintains that the underlying fundamentals remain strong.
Looking ahead, the CBN projects a continued upward trend in reserves, supported by expected improvements in oil production and a more favorable export environment, especially for non-oil sectors.
The apex bank reiterated its commitment to prudent reserve management, transparent reporting, and macroeconomic policies that foster exchange rate stability, attract foreign investment, and strengthen Nigeria’s long-term economic resilience.
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