The Business NG - August 22, 2025

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Nigeria’s FX Reserves: A Breather, Not a Breakthrough

Nigeria’s foreign exchange reserves climbing to $41.0 billion — the highest in nearly four years — is a welcome development. It strengthens the Central Bank of Nigeria’s (CBN) hand in calming the naira market, deterring speculation, and restoring some investor confidence.

But while the $1.46 billion surge in August signals renewed inflows and improved management, the bigger picture remains sobering. Year-to-date, reserves have grown by only 0.3%, highlighting the fragile nature of this rebound. Without consistent export earnings, stronger non-oil inflows, and disciplined debt management, the gains could prove fleeting.

The CBN must go beyond firefighting to structural reform — building resilience through export diversification, curbing over-reliance on oil receipts, and ensuring transparency in FX operations. Reserves are a buffer, not a substitute for productivity.

For now, Nigeria has secured breathing space. Turning it into a breakthrough will require bold economic reforms and policies that attract long-term capital, not just short-term speculation.