The announcement by the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, that Nigeria’s foreign reserves had risen to $49 billion as of February 5, 2026, has generated widespread attention and optimism.
Speaking at the 2nd National Economic Council (NEC) Conference in Abuja, Cardoso described the figure as “a very important statistic,” highlighting a 4.93 percent increase and Nigeria’s shift from a net seller to a net buyer of foreign exchange.
He attributed the growth to improved diaspora remittances, narrowing gaps between official and parallel market exchange rates, and growing confidence in the naira.
At first glance, the numbers are encouraging. Reports indicate the premium between official and parallel market rates has fallen below 2 percent.
Nigerians increasingly use naira cards for international transactions, banks are recapitalising, equity markets are showing recovery, and macroeconomic indicators such as a 3.98 percent GDP growth, a $3.42 billion current account surplus in Q3 2025, and inflation moderating to 15.15 percent suggest tentative stabilisation.
However, economists caution that headline figures may obscure deeper structural weaknesses in Nigeria’s economy.
“Foreign reserves are a buffer, not a foundation,” said Gbenga Olawepo-Hashim. “They are an outcome of economic vitality, not a substitute for it. Reserves grow quietly and sustainably when production, exports, infrastructure, and trust in institutions improve. Celebrating them loudly without addressing underlying weaknesses is risky.”
Experts point out that Nigeria’s reserve growth has been largely driven by borrowing, including Eurobond sales and government loans, rather than organic foreign exchange generation through productive sectors.
“The economy still depends heavily on oil exports, imports most manufactured goods, and relies on volatile capital inflows. What the CBN celebrates as $49 billion may not fully reflect usable reserves,” Olawepo-Hashim added, highlighting that gross reserves include swaps, forward commitments, and external obligations, which reduce the net buffer available to defend the naira.
Analysts note that countries with truly resilient reserves, such as Saudi Arabia ($410 billion), Indonesia ($153 billion), and Singapore ($397 billion), built them through decades of industrial policy, export diversification, domestic savings, and infrastructure development—measures that strengthened the real economy rather than temporarily boosting numbers.
“The Nigerian model today resembles constructing a skyscraper on weak foundations,” said economic consultant Dr. Chidi Nwafor. “Foreign inflows into treasury bills, government bonds, and money markets stabilize liquidity, but they barely touch industrial growth, domestic capital formation, or export capacity.”
Policy experts argue that sustainable reserves require export-led industrial strategies, productive credit allocation, and infrastructure investment. They note that Nigeria’s over-reliance on short-term capital inflows, coupled with import dependency, cost-driven inflation, and limited domestic savings deployment, limits the country’s capacity to generate foreign exchange organically.
Dr. Nwafor added, “The CBN’s focus must extend beyond accumulating reserves. Policies must channel credit to manufacturing, agro-processing, and export-oriented sectors while building reliable infrastructure and mobilising domestic capital. Otherwise, the headline numbers may impress, but they won’t translate into real economic growth or stability.”
Despite CBN projections that GDP growth could reach 4.49 percent, inflation could moderate to 12.9 percent, and reserves could surpass $50 billion, experts stress that macroeconomic stability alone does not equate to sustainable development. High unemployment, stagnant wages, and low productivity remain pressing issues.
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Olawepo-Hashim concluded: “The true measure of economic performance is the living conditions of citizens. Foreign reserves are valuable, but without expanding production, diversifying exports, and deepening capital, they are constantly under threat. Nigeria must choose between endlessly managing reserves or building an economy that earns them effortlessly. The former gives headlines; the latter delivers sustainable prosperity.”
As Nigeria marks the $49 billion milestone, the consensus among analysts is clear: while reserves are stabilising, long-term growth depends on structural reforms that generate foreign exchange organically, create jobs, and strengthen the domestic economy.