Abuja – October 16, 2025 – In a resounding vote of confidence for Nigeria's economic trajectory, the Central Bank of Nigeria (CBN) has unveiled that the nation's foreign exchange (FX) reserves have surged to a remarkable five-year high of $43.4 billion. This milestone comes even as the bank has aggressively tackled longstanding FX backlogs and worked tirelessly to steady the volatile currency market. The announcement, delivered at a high-profile gathering of global investors, underscores a pivotal shift in Africa's largest economy, signaling brighter prospects for trade, investment, and overall macroeconomic health.
The revelation was made by Mohammed Abdullahi, the CBN's Deputy Governor for Economic Policy, during the Nigeria Investors Forum. Held on the fringes of the prestigious IMF–World Bank Annual Meetings here in the U.S. capital, the forum drew top-tier financiers, policymakers, and business leaders eager to dissect Nigeria's reform agenda. Abdullahi, steering the discussions on the country's economic outlook and reform milestones, painted an optimistic picture backed by hard data.
"Our gross reserves are at a five-year high of $43.4 billion as of October 10," Abdullahi declared to an attentive audience. "This robust figure is more than sufficient to cover 11 months of imports – a critical buffer in these uncertain global times." He attributed this ascent directly to the CBN's decisive actions: the systematic clearance of FX backlogs that had plagued the system for years, coupled with enhanced liquidity injections across the forex market. These measures, he explained, have not only replenished the nation's coffers but also restored faith among international partners.
To fully appreciate this achievement, it's essential to rewind to the turbulent recent past. Just three years ago, in 2022, Nigeria's FX reserves hovered perilously low, dipping below $20 billion amid a perfect storm of global shocks – from the Russia-Ukraine war disrupting oil supplies to domestic policy missteps that fueled rampant speculation. Backlogs in FX allocations to importers ballooned to over $7 billion, strangling businesses and eroding investor trust. The naira, once a symbol of stability, plummeted, with exchange rate premiums between the official Investors and Exporters (I&E) window and the parallel black market soaring beyond 50 percent. Inflation raged unchecked, peaking at 24.7 percent, while capital flight drained the economy.
Fast-forward to today, and the transformation is nothing short of dramatic. Abdullahi highlighted the Naira's newfound stability as a cornerstone of this revival. "The exchange rate premium has narrowed dramatically to less than 3 percent," he noted, a stark contrast to the chaotic disparities of yesteryear. This convergence means the official rate – now around ₦1,600 to the dollar – closely mirrors parallel market realities, curbing arbitrage opportunities and fostering a unified, transparent forex ecosystem. For everyday Nigerians, this translates to predictable pricing for imported essentials like fuel, food, and machinery, easing the cost-of-living pressures that had gripped households.
Inflation, too, has tamed its fury. At 18.02 percent as of September 2025, it's the lowest in three years, down from double-digit spikes that eroded purchasing power. Abdullahi credited this downturn to a potent mix of factors: tighter monetary policy, improved supply chains, and a surge in capital inflows. Remittances from the Nigerian diaspora, a lifeline worth over $20 billion annually, have hit record highs, bolstered by digital platforms and favorable exchange policies. Foreign direct investment (FDI) is rebounding, with sectors like oil & gas, agriculture, and tech attracting $4.2 billion in the first nine months of 2025 alone – up 35 percent year-on-year. These inflows have supercharged the balance of payments, turning chronic deficits into surpluses and fortifying the external sector.
At the heart of this success story lies the CBN's unwavering commitment to orthodox monetary principles. Abdullahi stressed that the bank is ditching unorthodox experiments of the past – think multiple exchange rate windows and covert interventions – in favor of transparency and rule-based FX management. "We're coordinating closely with fiscal authorities to lock in macroeconomic stability," he affirmed. This includes the Monetary Policy Committee's (MPC) recent hike of the benchmark interest rate to 27.5 percent, aimed at reining in money supply while making naira assets attractive to yield-hungry investors.
Echoing these sentiments was Olayemi Cardoso, the CBN Governor, who took the podium to amplify the narrative. Cardoso, appointed in 2023 amid a reform mandate, has been the architect of this turnaround. "The rise in external reserves is a clear testament to renewed investor confidence and the tangible fruits of our ongoing economic reforms," he stated emphatically. He elaborated that this $43.4 billion war chest – up from $33 billion at the start of the year – reflects "the cumulative effect of fiscal and monetary coordination, smoother FX flows, and a rebuilt trust in Nigeria's policy compass."
Cardoso delved deeper into the collaborative machinery at play. "The CBN and the Ministry of Finance have been working hand in glove," he revealed, referencing joint initiatives like the Electronic Foreign Exchange Matching System (EFEMS). Launched earlier this year, EFEMS automates trades, slashes delays, and boosts visibility, processing over $15 billion in transactions with zero backlog. This tech-driven transparency has slashed corruption risks and drawn praise from the IMF, which in its latest Article IV consultation commended Nigeria's "bold steps toward market-determined rates."
"Nigeria's focus remains laser-sharp: strengthening our fundamentals, accelerating reforms, and unlocking avenues for sustainable investment and growth," Cardoso continued. He spotlighted key reforms, including the unification of exchange rates in June 2023, which dismantled the artificial premium; the removal of fuel subsidies that saved $10 billion annually; and tax reforms under the new Finance Act to broaden the revenue base without stifling businesses. These moves have not only padded reserves but also catalyzed non-oil exports, with agricultural shipments to Europe jumping 28 percent.
In a nod to the bigger picture, Cardoso underscored the interplay between policy discipline and outcomes. "There's a strong correlation between disciplined economic management, growth, and disinflation," he asserted. Indeed, GDP growth accelerated to 3.5 percent in Q3 2025, outpacing sub-Saharan Africa's average, driven by services and manufacturing. Unemployment eased to 4.1 percent, the lowest in a decade, as reforms spurred job creation in agro-processing and renewables.
Yet, challenges linger. Global headwinds – volatile oil prices, geopolitical tensions – test Nigeria's resilience. Domestically, food inflation at 22 percent remains sticky, demanding agricultural investments. Cardoso acknowledged these, vowing sustained vigilance: "We're not complacent; stability is a journey, not a destination."
The forum's ripple effects were immediate. Post-event, pledges poured in: a $2 billion green bond from U.S. investors for renewable energy; Afreximbank's $1.5 billion credit line for exports. Analysts like those at Fitch Ratings upgraded Nigeria's outlook to 'stable,' citing reserves as a "game-changer."
For Nigerians, this means hope: cheaper imports, stronger naira, tamed prices. For the world, it's an invitation – Africa's giant is roaring back. As Abdullahi wrapped up, his words resonated: "From backlog burdens to buffer strength, Nigeria is scripting a comeback story." With reserves at $43.4 billion, the chapter is just beginning.
