The Central Bank of Nigeria (CBN) has reported a substantial improvement in its Net Foreign Exchange Reserve (NFER) position as of the end of 2024, reflecting a substantial improvement in the country’s external liquidity, reduced short-term obligations, and renewed investor confidence.
NFER stood at $23.11 billion, the highest level in over three years, a marked increase from $3.99 billion at year-end 2023, $8.19 billion in 2022, and $14.59 billion in 2021.
NFER, which adjusts gross reserves to account for near-term liabilities such as FX swaps and forward contracts, is a more accurate indicator of the foreign exchange buffers available to meet immediate external obligations.
Gross external reserves also increased to $40.19 billion at year end 2024, compared to $33.22 billion at the close of 2023.
The increase in reserves reflects a combination of strategic measures undertaken by the CBN, including a deliberate and substantial reduction in short-term foreign exchange liabilities – notably swaps and forward obligations.
The strengthening was also spurred by policy actions to rebuild confidence in the FX market and increase reserve buffers, along with recent improved foreign exchange inflows – particularly from non-oil sources.
The result is a stronger and more transparent reserves position that better equips Nigeria to withstand external shocks. The expansion occurred even as the CBN continued to reduce short-term liabilities, thereby improving the overall quality of the reserve position.
“This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability” CBN Governor Olayemi Cardoso, said.
“Gov. Cardoso says, “We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms.”
Reserves have continued to strengthen in 2025. While the first quarter figures reflected some seasonal and transitional adjustments, including significant interest payments on foreign-denominated debt, underlying fundamentals remain intact, and reserves are expected to continue improving over the second quarter of this year.
“We anticipate a steady uptick in reserves, underpinned by improved oil production levels, and a more supporting export growth environment that is expected to boost non-oil FX earnings and diversify external inflows,” Cardoso said.
CBN Swap exposure
The Central Bank of Nigeria (CBN) continues to have billions of dollars’ worth of swap positions on its books with counterparties largely Nigerian banks, and government owned institutions such as the NSIA and Bank of Industry (BOI).
The BOI in its audited 2023 financial statements disclosed N2.08 trillion foreign currency (Euro) swap exposure to the Central Bank of Nigeria (CBN).
The CBN also collaterised $480m worth of NSIA swap exposure in 2024, MoneyCentral reported.
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