Nigeria’s foreign exchange reserves are projected to rise to about US$51 billion in 2026, bolstering the naira and reinforcing investor confidence as market reforms begin to stabilise Africa’s largest economy, the central bank said.
In its latest macroeconomic outlook, the Central Bank of Nigeria (CBN) said reforms in the foreign exchange market are expected to sustain exchange-rate stability, with external reserves forecast to reach US$51.04 billion next year.
The reserves are estimated to close 2025 at US$45.01 billion, up from US$40.19 billion in 2024, implying an increase of more than US$6 billion within a year, according to the Abuja-based bank.
Stronger reserves would provide greater firepower to defend the naira and smooth volatility in the foreign exchange market, which has been rattled in recent years by acute dollar shortages, multiple exchange rates and policy uncertainty.
“Reforms in the foreign exchange market are expected to sustain exchange rate stability, while external reserves are projected to increase,” the CBN said, linking the outlook to ongoing efforts to liberalise the FX market and improve transparency.
Nigeria has spent years battling currency instability that eroded investor confidence, squeezed corporate balance sheets and pushed inflation sharply higher. The naira lost significant value following the removal of capital controls and the unification of exchange rates, reforms that authorities say were necessary to restore credibility but painful in the short term.
Economists say a sustained rise in reserves could mark a turning point.
“For import-dependent companies, stronger reserves and a more stable naira reduce foreign exchange losses and improve profitability,” said a Lagos-based analyst. “It also reassures portfolio investors worried about repatriation risks.”
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The improving outlook for reserves comes as Nigeria shows tentative signs of economic recovery after years of weak growth, falling oil output and dwindling dollar inflows.
The CBN projects economic growth of 4.49 percent in 2026, up from an estimated 3.89 percent in 2025 and 3.38 percent in 2024, reflecting what it described as gains from broad-based structural reforms.
“The projection is hinged on continued gains from structural reforms and a gradually easing monetary policy stance,” the bank said, adding that these measures are expected to improve the business environment, enhance investor confidence and support private-sector-led growth.
Nigeria’s economy has been constrained by high inflation, which has eaten into household incomes, and by tight monetary policy aimed at taming price pressures and stabilising the currency. While interest rates remain elevated, the central bank signalled that easing could begin gradually as inflation moderates.
The CBN also expects growth momentum to be supported by higher oil production and investment in the energy sector, a crucial source of foreign exchange for the country.
Oil earnings account for the bulk of Nigeria’s export revenues and government income, but production has been hampered in recent years by theft, pipeline vandalism and underinvestment. Authorities say improved security surveillance in the Niger Delta is helping output recover.
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The central bank further cited gains from enhanced domestic refining capacity, a reference to new and rehabilitated refineries that could reduce Nigeria’s reliance on imported fuel a major drain on foreign exchange.
Analysts say the combination of higher oil receipts, stronger reserves and FX reforms could help stabilise the macroeconomic environment if policy consistency is maintained.
However, risks remain. Global oil prices, capital flows to emerging markets and domestic inflation trends could all affect the outlook. Critics also warn that the benefits of reforms have yet to be fully felt by ordinary Nigerians, many of whom are struggling with high living costs.
Still, for policymakers, the reserve projection offers a measure of optimism after years of strain.
“A stronger reserve position would be a critical buffer against external shocks,” said one economist. “The challenge will be translating macro stability into inclusive growth.”
If the CBN’s forecast materialises, Nigeria would enter 2026 with its strongest reserve position in years a key test of whether reforms can deliver lasting stability to Africa’s most populous nation.
