Over the last two years, Nigeria’s foreign exchange reserves have grown significantly, with net holdings increasing more than seven times following a major revamp of the nation’s currency management system.
Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), revealed that the country’s net foreign exchange reserves surged from $3.99 billion at the end of 2023 to $34.80 billion by the close of 2025, marking an increase of approximately 772 percent.
For a nation long grappling with persistent dollar shortages, fluctuations in exchange rates, and investor doubts, this rebound signifies a notable improvement in its external financial position.
Net reserves surpass 2023 gross total
CBN data indicate that the end-2025 net reserves now exceed Nigeria’s total gross external reserves of $33.22 billion recorded at the end of 2023.
Net international reserves, which deduct short-term obligations such as foreign exchange swaps and forward contracts from total reserve assets, offer a more precise measure of a country’s ability to meet immediate external liabilities. Analysts often consider this metric a reliable gauge of external financial strength.
Cardoso described the increase as “a substantial reinforcement of both the scale and quality of Nigeria’s external buffers over the past three years.”
He further noted, “The improvements in both gross and net foreign reserves by the end of 2025 reflect stronger fundamentals in the external sector and the positive impact of ongoing policy reforms.”
Year-on-year gains accelerate
The central bank highlighted a consistent build-up in reserves over the past year. Net reserves climbed from $23.11 billion at the end of 2024 to $34.80 billion by the end of 2025, representing an increase of $11.69 billion, or 50.58 percent.
Gross reserves also experienced growth, rising from $40.19 billion in 2024 to $45.71 billion by the end of 2025, a one-year gain of $5.52 billion.
In February 2026, the CBN reported that gross external reserves had reached $50.45 billion as of February 16, highlighting continued momentum into the new year. Central bank records show reserves increased by around 8.56 percent between January 1 and February 25.
Foreign reserves, typically held in major currencies such as the US dollar, are used to finance imports, service external debt, and support the domestic currency during periods of external strain.
For countries reliant on commodity exports like Nigeria, where oil represents the primary source of foreign exchange, the adequacy of reserves remains a key factor for investors and credit rating agencies.
Transparency drive and FX reforms
Cardoso credited the reserve growth to reforms designed to restore credibility in the foreign exchange market, including measures to enhance transparency and reduce distortions in currency pricing.
He said, “These numbers underscore the advantages of greater transparency and trust in foreign exchange management, fostering investor confidence, attracting stronger inflows, and improving reserve management practices aimed at preserving capital, maintaining liquidity, and supporting long-term sustainability.”
In recent years, Nigeria has dismantled multiple exchange rate windows and worked to unify its currency market, part of a wider reform strategy intended to draw capital inflows and relieve pressure on the naira.
Cardoso added that the stronger reserve position strengthens Nigeria’s capacity to meet international obligations, stabilise the foreign exchange market, and absorb external shocks.
“The progress reflects healthier fundamentals in the external sector, improved transparency in currency management, and ongoing policy reforms that aim to rebuild credibility and bolster investor confidence,” he said.
He further emphasized that the central bank would continue prioritizing sufficient reserve buffers and orderly market operations in line with its mandate.
For one of Africa’s rapidly growing economies, the durability of this reserve expansion and its influence on exchange rate stability will be closely observed, especially as other central banks across the continent implement similar reform-driven measures to strengthen external balances amid global financial tightening.