The Central Bank of Nigeria (CBN) has announced a substantial increase in the nation’s net foreign exchange reserves, reaching $23.11bn by the close of 2024, representing the highest recorded level in over three years.
In a formal communication released on Tuesday, the apex financial institution highlighted that this figure signifies a notable escalation from the $3.99bn reported at the end of 2023, the $8.19bn recorded in 2022, and the $14.59bn registered in 2021.
The statement conveyed, “The Net Foreign Exchange Reserves (NFER) stood at $23.11bn, marking the peak in over three years, a significant surge from $3.99bn at the culmination of 2023, $8.19bn in 2022, and $14.59bn in 2021.”
The NFER, which adjusts gross reserves to account for immediate liabilities such as FX swaps and forward contracts, is considered a more precise metric for evaluating the country’s available foreign exchange buffers to address urgent external financial obligations.
The Central Bank also disclosed that Nigeria’s gross external reserves expanded to $40.19bn as of December 2024, in comparison to the $33.22bn recorded at the end of 2023.
This enhancement reflects deliberate actions undertaken by the Central Bank to mitigate short-term foreign exchange liabilities, particularly FX swaps and forward obligations.
According to the official statement, Central Bank Governor Olayemi Cardoso attributed the augmentation to strategic policy decisions aimed at bolstering investor confidence, minimizing vulnerabilities, and establishing a more robust reserve position.
“This improvement in our net reserves is not coincidental; it is the direct result of strategic policy choices designed to restore confidence, reduce vulnerabilities, and establish a foundation for sustained stability,” Cardoso stated.
The Central Bank noted that the enhancement in NFER was facilitated by a confluence of factors, including a substantial reduction in short-term FX liabilities such as swaps and forwards, which previously posed liquidity risks.
Furthermore, increased foreign exchange inflows from non-oil sectors contributed to fortifying the reserve position. The bank also credited policy reforms aimed at reinstating confidence in the FX market, which aided in attracting more sustainable inflows. The Central Bank expressed optimism regarding the continuation of this upward trajectory throughout 2025.
While the initial quarter exhibited certain seasonal adjustments, including significant interest payments on foreign-denominated debt, the underlying economic principles remained robust.
Reserves are anticipated to maintain their growth, propelled by enhanced oil production levels and a favourable export landscape, particularly within non-oil sectors.
The Central Bank asserted that these elements would strengthen Nigeria’s external liquidity and support a stable exchange rate.
Cardoso reiterated the apex bank’s commitment to judicious reserve management, transparent reporting, and macroeconomic policies designed to uphold stability, attract investment, and foster long-term economic resilience.
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