NIGERIA’S FOREIGN RESERVES REACH EIGHT-YEAR HIGH AS NAIRA GAINS STRENGTH

NIGERIA’S FOREIGN RESERVES REACH EIGHT-YEAR HIGH AS NAIRA GAINS STRENGTH

By PRESSCODE NEWS
ABUJA, NIGERIA. 3RD FEBRUARY 2026

Nigeria’s gross external reserves have climbed to $46.11 billion as of 28 January 2026, marking the country’s strongest financial position in eight years and providing crucial stability for the national currency.

The remarkable 18.6 per cent increase from $38.88 billion recorded a year earlier represents a significant milestone for Africa’s largest economy, offering sufficient cover for 14 months of imports.

According to Bismark Rewane, Managing Director of Financial Derivatives Company Limited, the reserve accumulation has primarily been driven by increased oil exports, substantial diaspora remittances, and renewed foreign portfolio investment.

These inflows have contributed to the naira’s appreciation to N1,385 against the dollar, representing a 0.65 per cent gain and the currency’s strongest performance since May 2024.

The enhanced reserve position signals reduced exchange rate pressure on inflation, whilst simultaneously lowering input cost volatility for small and medium-sized enterprises. Households are expected to benefit through improved purchasing power and greater consumer confidence as the nation approaches a pre-election year.

The Central Bank of Nigeria’s reforms under Governor Olayemi Cardoso have rekindled investor interest, with analysts noting that official remittance channels and improved oil revenues have strengthened the country’s financial buffer. The last time Nigeria’s external reserves reached comparable levels was 27 August 2018, when they stood at $45.9 billion.

Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria, confirmed that the naira has enjoyed relative stability across markets, ending years of turbulence. Rewane estimates the currency’s fair value at approximately N1,257 to the dollar, suggesting an 11 per cent undervaluation based on purchasing power parity models.

Dr Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Public Enterprise, expressed optimism about the reserves’ trajectory, emphasising that ongoing foreign exchange and fiscal reforms should maintain stability. He noted the increasingly diverse sources supporting the reserves, including foreign direct investment and non-oil exports, rather than petroleum alone.

The Central Bank has projected reserves could reach $51.04 billion in 2026, supported by enhanced oil revenues and the anticipated impact of the Dangote Refinery reaching full capacity, which could substantially reduce petroleum import dependence.

PRESSCODE NEWS INSIGHT

Whilst Nigeria’s reserve accumulation represents genuine progress, sustaining this momentum through an election year presents considerable challenges. Historical patterns suggest political cycles often trigger increased government spending and capital flight, potentially eroding recent gains. The critical test will be whether authorities maintain fiscal discipline and avoid excessive foreign exchange interventions that could deplete reserves. Success in navigating these pressures whilst preserving reform momentum will determine whether this milestone marks a temporary peak or the foundation for lasting economic stability.

PRESSCODE NEWS
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