Nigeria’s external reserves record first sustained growth in 2025

Nigeria’s foreign exchange reserves have registered a notable recovery, marking their first sustained upward trend of 2025.

According to the Central Bank of Nigeria (CBN), the nation’s gross external reserves increased by $364 million between April 30 and May 14, rising from $37.934 billion to $38.298 billion, a 0.96% gain over the two-week period.

This is the first consistent two-week growth in reserves since they peaked on January 6, 2025, at $40.92 billion, a milestone that had been followed by months of decline and instability driven by foreign debt repayments, weakened oil revenues, and intense pressure on the naira.

The recent rebound marks a potential turning point for Nigeria’s external financial position, hinting at improved foreign currency liquidity and a more stable outlook for the naira.

Although the $364 million increase may appear modest in the context of Nigeria’s broader macroeconomic challenges, it is the most significant reserve buildup within a short period in 2025 and could indicate underlying improvements in FX inflows and market sentiment.

Analysts attribute the recovery to a combination of policy reforms and tactical adjustments by the CBN.

Under the leadership of Governor Olayemi Cardoso, the apex bank has moved away from aggressively defending the naira with unsustainable interventions, instead adopting a more conservative FX management strategy that allows the exchange rate to reflect true market forces.

“This improvement in our net reserves is not accidental,” Cardoso stated in a recent policy briefing. “It is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability.”

The CBN’s renewed focus on market liberalization, transparency, and digital monitoring of FX flows has also begun to yield dividends.

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By enhancing oversight of Bureau de Change operations, cracking down on FX misuse, and minimizing leakages, the bank has curbed speculative behavior and boosted investor confidence.

The rise in reserves also coincides with improved oil production and a more favorable export environment, particularly in non-oil sectors, which the CBN expects will continue to support Nigeria’s external liquidity through the second quarter of 2025.

While the first quarter was weighed down by seasonal pressures, including interest payments on foreign-denominated debt, the central bank maintains that Nigeria’s economic fundamentals remain resilient.

Governor Cardoso reiterated the CBN’s commitment to prudent reserve management, transparent financial reporting, and macroeconomic reforms aimed at attracting investment and maintaining a stable economic environment.

However, experts caution that sustaining this recovery will require continued commitment to economic discipline, policy transparency, and strategic diversification away from oil dependence.

Long-term stability, they note, hinges on Nigeria’s ability to reduce its reliance on imports, expand local production, and limit exposure to external borrowing risks.

As the second quarter progresses, all eyes will remain on the CBN and its policy implementation, with hopes that this latest trend marks the beginning of a broader economic turnaround for Africa’s largest economy.