The Central Bank of Nigeria has announced a significant milestone in the country’s economic recovery, with foreign reserves climbing to $46.7 billion, marking the highest level since 2018. The development signals growing investor confidence and improved stability in Africa’s largest economy.
Olayemi Cardoso, governor of the Central Bank of Nigeria, disclosed the figures while briefing the senate committee on banking, insurance and other financial institutions on Thursday. The CBN governor explained that the current reserves level provides approximately 10.3 months of import cover, offering substantial buffer for the economy against external shocks.
The steady accumulation of foreign reserves represents a remarkable turnaround from the challenges that confronted Nigeria’s economy in recent years. Between 2016 and 2023, the country’s reserves fluctuated significantly, often dropping below $35 billion during periods of economic pressure. The current level of $46.7 billion exceeds the reserves recorded in early 2019, when the figure stood at approximately $45 billion.
Cardoso attributed the improvement to several factors, including enhanced foreign exchange market stability and renewed confidence in Nigeria’s economic policies. The gap between the official and parallel market exchange rates has narrowed dramatically to under two percent, down from over 60 percent recorded a year ago. This convergence addresses one of the most persistent challenges in Nigeria’s foreign exchange management, where wide disparities between official and black market rates previously fueled speculation and capital flight.
The Nigerian foreign exchange market has also shown signs of strengthening. The average exchange rate improved to N1,442.92 per dollar as of November 26, compared to N1,551.08 recorded in the first half of 2025. This appreciation of the naira reflects improved liquidity in the foreign exchange market and more efficient price discovery mechanisms.
Diaspora remittances have emerged as a critical driver of the reserves growth. Monthly inflows surged by 66.7 percent, rising from $200 million to approximately $600 million in recent months. This increase follows policy reforms aimed at simplifying remittance processes and providing better exchange rates for diaspora Nigerians sending money home. The World Bank estimates that Nigeria receives one of the highest volumes of remittances in Africa, and the recent surge indicates that formal channels are capturing a larger share of these flows.
The CBN’s resolution of the $7 billion foreign exchange backlog has also played a crucial role in restoring credibility. The backlog, which accumulated over several years, involved outstanding obligations to foreign investors and businesses seeking to repatriate funds or settle import bills. The clearance of these obligations has removed a major source of uncertainty that previously deterred foreign investment and complicated business planning for multinational companies operating in Nigeria.
Beyond foreign reserves, other macroeconomic indicators show positive momentum. Inflation has declined for seven consecutive months, reaching 16.05 percent in October 2025, the lowest rate in three years. Food inflation, which particularly affects ordinary Nigerians, dropped to 13.12 percent during the same period. These figures represent significant relief from the inflation spike that pushed the headline rate above 30 percent in 2024.
Nigeria’s real gross domestic product grew by 3.98 percent in the third quarter of 2025, driven by strong performance in crop production, information and communications technology, real estate, and financial services. The GDP growth rate surpasses the population growth rate, suggesting modest improvements in per capita income.
The country’s digital payments ecosystem continues to thrive, with Nigeria ranking among Africa’s most advanced markets in this sector. The vibrant fintech industry has produced eight of the continent’s nine unicorn companies—privately held startups valued at over $1 billion. This technological advancement has improved financial inclusion and created new opportunities for economic participation.
International credit rating agencies have taken notice of Nigeria’s economic improvements. Both Fitch Ratings and S&P Global Ratings have issued favorable assessments, reflecting improved investor sentiment, enhanced policy credibility, and greater macroeconomic stability. These ratings influence the cost at which Nigeria can borrow from international markets and affect foreign direct investment decisions.
Tokunbo Abiru, chairman of the senate committee on banking, insurance and other financial institutions, commended the monetary policy framework implemented by the CBN. Abiru noted that lawmakers have observed “remarkable macroeconomic improvements” since their last engagement with the bank in July 2025. The senator praised the CBN’s leadership for earning favorable international ratings that enhance Nigeria’s standing in global financial markets.
The reserves accumulation occurs against the backdrop of global economic challenges, including tightening monetary conditions in advanced economies and volatile commodity prices. Nigeria’s ability to build reserves during this period demonstrates resilience and improved economic management.
However, sustaining the reserves growth will require continued policy discipline and structural reforms. Nigeria’s economy remains heavily dependent on oil exports, which account for the bulk of foreign exchange earnings. Diversifying export revenues through non-oil sectors, particularly agriculture and manufacturing, remains essential for long-term stability.
The increased import cover of 10.3 months provides Nigeria with greater capacity to meet its external obligations and defend the naira against speculative attacks. International financial institutions typically recommend maintaining reserves sufficient for at least three months of imports, making Nigeria’s current position relatively comfortable by this standard.
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