The Central Bank of Nigeria (CBN) has revealed a significant rise in the nation’s Net Foreign Exchange Reserves (NFER), reaching $23.11 billion by the end of 2024. This marks the highest level in over three years, reflecting deliberate financial strategies aimed at strengthening the economy.
In a statement issued on Tuesday, the CBN highlighted that the latest figure represents a remarkable increase compared to previous years. The NFER stood at $3.99 billion at the close of 2023, $8.19 billion in 2022, and $14.59 billion in 2021.
According to the apex bank, net reserves are a more accurate reflection of Nigeria’s foreign exchange position, as they account for near-term financial commitments such as FX swaps and forward contracts.
Increase in Gross External Reserves
Beyond the net reserve growth, the CBN also reported an increase in gross external reserves, which reached $40.19 billion as of December 2024, up from $33.22 billion at the end of 2023. This improvement was largely attributed to a reduction in short-term foreign exchange liabilities, including FX swaps and forward obligations.
CBN Governor Olayemi Cardoso credited the positive trend to strategic policy measures focused on boosting investor confidence, minimizing risks, and strengthening economic resilience.
“This improvement in our net reserves is not coincidental; it is the outcome of carefully implemented policies aimed at restoring confidence, reducing vulnerabilities, and laying a solid foundation for long-term economic stability,” Cardoso stated.
Key Factors Behind the Growth
The CBN identified several contributors to the improved reserve position:
- Reduction in FX Liabilities: A deliberate effort to cut back on short-term foreign exchange obligations helped mitigate risks to liquidity.
- Diversification of FX Inflows: Increased foreign exchange earnings from non-oil sectors played a vital role in strengthening Nigeria’s reserve position.
- Market Reforms: The introduction of policy initiatives aimed at enhancing confidence in the FX market attracted more sustainable capital inflows.
The bank emphasized that these measures have resulted in a more transparent and resilient foreign exchange reserve system, equipping the country to withstand external economic shocks.
Optimistic Outlook for 2025
Looking ahead, the CBN remains confident in sustaining the positive trend. While the first quarter of 2025 saw seasonal financial adjustments, including significant interest payments on foreign-denominated debt, the broader economic indicators remain strong.
The bank anticipates continued reserve growth, supported by improved oil production and a favorable export climate, particularly in the non-oil sector. These factors are expected to enhance Nigeria’s external liquidity and help stabilize the exchange rate.
Governor Cardoso reaffirmed the CBN’s commitment to responsible reserve management, transparent reporting, and economic policies designed to attract investment and bolster financial stability.
With these developments, Nigeria appears to be on a steady path toward strengthening its foreign exchange position and ensuring long-term economic resilience.
