Nigeria’s external reserves are projected to rise to $51.04 billion in 2026, up from an estimated $45.01 billion at end-2025, as far-reaching foreign exchange (FX) market reforms continue to restore confidence, narrow pricing distortions, and attract foreign capital, according to the latest Macroeconomic Outlook for Nigeria 2026 published by the Central Bank of Nigeria.
CBN Macroeconomic Outlook
The CBN said the sustained build-up in reserves reflects improved FX liquidity, rising oil receipts, stronger diaspora remittances, expanding non-oil exports, and increased portfolio and direct investment inflows following reforms that have made Nigeria’s FX market more transparent and market-driven.
FX reforms narrow naira premium to about 2%
A key indicator of progress highlighted in the report is the sharp convergence between official and parallel market exchange rates.
The premium between the Nigerian Foreign Exchange Market (NFEM) and Bureau de Change (BDC) rates narrowed to about 2.1% in late 2025, down from nearly 6% in 2024 and over 60% before the June 2023 FX reforms.
According to the CBN, this convergence signals improved price discovery, reduced arbitrage opportunities, and declining speculative pressure on the naira—factors that are critical to sustaining exchange-rate stability and rebuilding investor trust.
The reforms cited include the adoption of a market-determined exchange rate, the introduction of the Electronic Foreign Exchange Matching System (EFEMS), stricter FX market governance under the Nigeria FX Code, revised guidelines for International Money Transfer Operators (IMTOs), and enhanced oversight of BDC operations.
Capital inflows and reserve accumulation strengthen buffers
The Outlook notes that external reserves are expected to continue rising in 2026, supported by a projected current account surplus of $18.81 billion, higher oil and gas output, improved domestic refining capacity, and steady remittance inflows.
Stronger reserve buffers enhance Nigeria’s ability to meet external obligations, stabilise the currency during periods of global volatility, and reassure foreign investors about the country’s balance-of-payments position.
At the projected level, reserves would cover over 14 months of goods imports, providing a significant cushion against external shocks.
The CBN also expects attractive yields in domestic financial markets, combined with FX stability, to sustain portfolio investment inflows, reinforcing reserve accretion even as global financial conditions remain uncertain.
Rising external reserves and a narrowing FX premium are central to Nigeria’s macroeconomic reset.
For investors, they reduce currency risk, improve capital repatriation confidence, and lower the sovereign risk premium.
For policymakers, stronger buffers provide room to manage shocks without resorting to disruptive controls.
For businesses, FX stability improves planning, pricing, and access to foreign inputs.
The CBN said it remains committed to deepening FX reforms, strengthening market confidence, and coordinating closely with fiscal authorities to consolidate macroeconomic stability and support growth.
