By Joshua Tosin Ogunsakin 
The Central Bank of Nigeria (CBN) has finally disclosed Nigeria’s Net Foreign Exchange Reserves (NFER), following repeated calls by experts.
According to the CBN, the NFER rose significantly to $23.11 billion at the end of 2024, marking the highest level in over three years.
In a press statement on Tuesday, the bank noted that this is a significant jump from the $3.99 billion recorded at the end of 2023, $8.19 billion in 2022, and $14.59 billion in 2021.
The statement read, “NFER stood at $23.11 billion, the highest level in over three years, a marked increase from $3.99 billion at year-end 2023, $8.19 billion in 2022, and $14.59 billion in 2021.”
The NFER, which adjusts gross reserves to account for near-term liabilities such as FX swaps and forward contracts, is considered a more accurate measure of the country’s foreign exchange buffers available to meet immediate external obligations.
Gross reserves are also up
In addition to the NFER boost, Nigeria’s gross external reserves increased to $40.19 billion as of December 2024, up from $33.22 billion at the close of the previous year. This improvement reflects the CBN’s deliberate measures to reduce short-term foreign exchange liabilities, particularly FX swaps and forward obligations.
According to the statement, CBN Governor Olayemi Cardoso attributed the increase to strategic policy decisions aimed at enhancing investor confidence, reducing vulnerabilities, and building a more robust reserve position.
He stated, “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.”
Key drivers of reserve growth
The CBN highlighted several factors that contributed to the improved NFER position:
- Reduction in short-term FX liabilities: The bank significantly reduced its exposure to short-term foreign exchange obligations, such as swaps and forwards, which previously posed risks to liquidity.
- Increased FX inflows from non-oil sources: A boost in foreign exchange inflows from non-oil sectors also strengthened the reserve position.
- Reforms to rebuild confidence: The CBN implemented policy measures aimed at restoring trust in the FX market, which helped attract more sustainable and stable inflows.
The result is a more transparent and resilient reserve profile that better equips Nigeria to withstand external shocks, even as the CBN continues to reduce short-term obligations.
Positive Outlook for 2025
- The CBN remains optimistic about sustaining the upward trend in 2025. While the first quarter saw some seasonal adjustments, including significant interest payments on foreign-denominated debt, the underlying economic fundamentals remain strong.
- According to the CBN, reserves are expected to maintain an upward trajectory, driven by improved oil production and a more favourable export environment, particularly in non-oil sectors. These factors are likely to enhance Nigeria’s external liquidity and support a stable exchange rate.
- Governor Cardoso reiterated the CBN’s commitment to prudent reserve management, transparent reporting, and macroeconomic policies aimed at maintaining stability, attracting investment, and building long-term economic resilience.
Nairametrics