Nigeria’s External Reserves Sufficient to Cover 10 Months of Imports – CBN Data

Nigeria’s foreign reserves have reached a level that could finance up to 10 months of the nation’s import bill, according to the latest data from the Central Bank of Nigeria (CBN). The reserves, which currently stand above $37 billion, have been boosted by improved crude oil receipts, tighter monetary policies, and increased foreign portfolio inflows triggered by ongoing economic reforms.

CBN officials noted that the steady accretion in reserves over the past months is largely due to a rebound in global oil prices, enhanced production, and increased remittances from Nigerians in the diaspora. Recent figures from the Nigerian Upstream Petroleum Regulatory Commission indicate that oil production has maintained an upward trajectory, averaging around 1.57 million barrels per day, a trend that has significantly improved foreign exchange earnings for the country.

Analysts explain that import cover is a key metric used by global financial institutions to assess a country’s ability to meet its external obligations. The International Monetary Fund generally recommends at least three months of import cover for developing economies. Nigeria’s 10-month cushion, therefore, represents a significant improvement, strengthening its external position and investor confidence.

The CBN has attributed the improved reserves to stringent measures aimed at stabilising the naira and curbing speculative activities in the foreign exchange market. Policy actions such as the harmonisation of exchange rates, enhanced oversight of forex allocations, and tighter liquidity management have helped reduce pressure on the reserves while encouraging inflows. Additionally, recent Eurobond repayments and foreign portfolio inflows following the liberalisation of the FX market have played key roles in reserve accretion.

Despite these positive developments, experts caution that the sustainability of the reserves depends on Nigeria’s ability to maintain robust export earnings while diversifying away from heavy dependence on oil. The country still spends a significant portion of its foreign exchange on importing refined petroleum products, machinery, and food items. Structural reforms aimed at boosting local refining capacity, increasing non-oil exports, and curbing import dependency are therefore considered critical.

There are also concerns about rising external debt servicing obligations. Nigeria’s debt service-to-revenue ratio remains high, and any sharp increases in global interest rates or volatility in oil prices could pose risks to the reserve position. Economists have urged the government to continue its fiscal consolidation efforts while exploring innovative ways to boost forex inflows, such as expanding the digital economy and increasing agricultural exports.

Foreign investors have reacted positively to the improved reserves and policy measures. Market reports indicate renewed interest in Nigerian assets, with increased trading volumes in the equities and bond markets. Analysts say the improved import cover will help stabilise the naira further, reduce inflationary pressures caused by imported goods, and provide the CBN with more room to intervene in the FX market when necessary.

The federal government has emphasised that its broader economic reforms, including energy sector deregulation, improved tax administration, and infrastructure investments, are designed to create a conducive environment for sustainable foreign exchange earnings. Minister of Finance and Coordinating Minister of the Economy, Wale Edun, recently stated that Nigeria aims to attract more foreign direct investment through predictable policies and a business-friendly climate.

While challenges remain, the improvement in Nigeria’s external reserves and its capacity to fund up to 10 months of imports represent a positive milestone in the country’s macroeconomic management. It signals resilience amid global economic uncertainties and domestic structural hurdles.

If these trends are sustained, Nigeria may not only stabilise its currency but also enhance its credit ratings and strengthen its negotiating position in international markets. The coming months will be critical in determining whether the gains can be consolidated through continuous policy discipline and structural economic reforms.