Nigeria Economic Update, Issue 33

The Movement in Foreign Reserves data from the Central Bank of Nigeria (CBN) revealed that the country’s foreign reserves rose to $41 billion on August 19, 2025, the highest level in 44 months. This is the highest amount recorded since December 3, 2021, marking a significant increase from the $37 billion to $39 billion range within which reserves fluctuated during the second and third quarters of the year. In its 301st Monetary Policy Committee (MPC) communique, the CBN noted continued stability in the foreign exchange market, citing factors such as higher capital inflows, improved oil production, rising non-oil exports, and reduced imports. The recent surge in reserves can also be attributed to these factors. The recent boost in reserves strengthened the country’s economic buffer, relieving pressure on the Naira and helping to restore market confidence. Despite these gains, significant risks remain that could slow the growth of the foreign reserve, such as declining inflows and high debt servicing costs. To sustain this upward trend, it is essential to maintain manageable debt levels and further enhance oil production through infrastructural investment. Futhermore, boosting non oil exports is critical and can be achieved by improving business access to credit, affordable electricity, transportation networks, and ensuring the availability of raw materials for production. 

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