Nigeria’s foreign exchange reserves recorded a notable increase of $4.39 billion over a one-year period, reflecting gradual strengthening despite early-year pressures from debt servicing and market interventions.
Data from the Central Bank of Nigeria (CBN) show that external reserves rose from $40.85 billion on December 23, 2024, to $45.24 billion as of December 23, 2025, representing an increase of about 10.75 per cent.
The reserve position experienced fluctuations during the year. After closing 2024 at $40.87 billion, reserves declined steadily in the first quarter of 2025, falling to $39.72 billion in January, $38.41 billion in February, and $38.30 billion in March before slipping further to $37.93 billion in April. The decline was largely attributed to elevated foreign debt service obligations and foreign exchange market interventions by the apex bank.
CBN data indicate that Nigeria spent $540 million on debt servicing in January 2025 and an additional $276 million in February, bringing total foreign debt payments in the first two months of the year to $816 million. Although reserves edged up slightly in May to $38.45 billion, they fell again in June to $37.21 billion, resulting in a net decline of $3.67 billion in the first half of the year.
A sustained recovery began in the second half of 2025. Reserves climbed to $39.35 billion in July and crossed the $40 billion threshold in August, closing at $41.30 billion. The upward trend continued in September, when reserves rose to $42.35 billion, before increasing further to $43.19 billion in October and $44.66 billion in November.
While there were minor declines in mid-December, reserves remained resilient, settling at $45.24 billion by December 23 after recovering some short-term losses.
Commenting on the improvement, CBN Governor Olayemi Cardoso attributed the rise in reserves to reforms in the foreign exchange market, particularly the clearance of FX backlogs and efforts to enhance transparency. He noted that restoring credibility and trust has been critical in attracting investment inflows and strengthening reserve buffers.
In November, the apex bank disclosed that Nigeria’s reserves had reached a seven-year high of $46.7 billion, supported by improved oil receipts, stronger balance-of-payments inflows, and renewed investor confidence.
Analysts have welcomed the buildup, noting that stronger reserves improve foreign exchange liquidity and ease pressure on the naira. However, some experts cautioned that part of the accretion was linked to external borrowing, including Eurobond issuances, underscoring the need to view reserve growth alongside rising debt levels.
Afrinvest Research, in its macroeconomic outlook, said the reserve position now provides nearly 11 months of import cover, above the minimum comfort threshold for low-income economies. The firm, however, warned that political developments ahead of the election season could influence investor sentiment and capital flows in the coming months.
Overall, the $4.39 billion increase in reserves over the past year highlights improved external buffers, even as structural challenges around debt sustainability and revenue generation remain key considerations for policymakers.
