MARKET NEWS

By Geoff Iyatse (Lagos) and Collins Olayinka (Abuja)

•Apex bank insists it is at 3-year high

Nigeria’s net foreign exchange reserves (NFER) was $23.11 billion at the end of last year, the Central Bank of Nigeria (CBN) has said. The value is $15.6 billion short of the current gross reserves, which are currently at $38.7 billion, a slight slip from the $40.2 billion it closed last year.

There may be a material difference between the real-term value and what it was three months ago. Yet, the peg has laid to rest the speculation that Nigeria might have carried on with negative NFER in the face of the protracted FX crisis. Still, the CBN said the net value is at its highest in over three years.

The apex bank, yesterday, said the feat achieved as of the end of 2024 reflects a substantial improvement in the country’s external liquidity, reduced short-term obligations and renewed investor confidence.

According to the CBN, the figure was a remarkable increase from $3.99 billion at 2023 ending, $8.19 billion in 2022 and $14.59 billion in 2021. NFER adjusts gross reserves to account for near-term liabilities such as FX swaps and forward contracts.

It is widely regarded as a more accurate indicator of the foreign exchange buffers available to meet immediate external obligations. A few years ago, there was apprehension that Nigeria’s net FX reserve would have slipped into negative territory. The CBN, then, kept mute over the actual figure.

Last year at the World Bank/International Monetary Fund (IMF) general meeting in Washington DC, the apex bank’s boss, Yemi Cardoso, promised that his team would, beginning from last quarter, start disclosing the NFER as part of its commitment to full disclosure and transparency.

Gross external reserves also increased to $40.19 billion, compared to $33.22 billion at the close of 2023, the bank argued. The bank noted that the increase in reserves reflects a combination of its strategic measures, including a deliberate and substantial reduction in short-term foreign exchange liabilities – notably swaps and forward obligations.

It added that the strengthening was also spurred by policy actions to rebuild confidence in the FX market and increase reserve buffers, along with recently improved foreign exchange inflows – particularly from non-oil sources.

It further disclosed that the result is a stronger and more transparent reserves position that better equips Nigeria to withstand external shocks. The expansion occurred even as the CBN continued to reduce short-term liabilities, thereby improving the overall quality of the reserve position.

In his comment on the achievement, the governor of the CBN, Yemi Cardoso, said: “This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities and laying the foundation for long-term stability. We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms.”

The CBN hinted that reserves would continue to strengthen in 2025.

While the first quarter figures reflected some seasonal and transitional adjustments, including significant interest payments on foreign-denominated debt, underlying fundamentals remain intact, and reserves are expected to continue improving over the second quarter of this year.

Going forward, the CBN said it anticipates a steady uptick in reserves, underpinned by improved oil production levels, and a more supporting export growth environment expected to boost non-oil FX earnings and diversify external inflows.

“The CBN remains committed to prudent reserve management, transparent reporting and macroeconomic policies that support a stable exchange rate, attract investment and build long-term resilience,” it stated