Analysts are projecting a continued surge in Nigeria’s external reserves, forecasting that the country could reach about $45 billion by the end of 2025.
The strengthening external reserves are expected to bolster the Central Bank of Nigeria’s (CBN) capacity to manage foreign exchange liquidity and enhance overall economic stability.
The latest figures from the CBN revealed that Nigeria’s external reserves climbed to $41.11 billion last Tuesday, marking the highest level in 44 months.
This represents a remarkable rebound from earlier depletion caused primarily by external debt repayments and global market pressures.
In August alone, the reserves grew by $1.56 billion, rising from $39.54 billion on August 1, reflecting a 3.95 percent increase in less than a month.
According to Cowry Assets Management in its weekly market report, the upward trajectory of external reserves is likely to continue, supported by steady offshore inflows and anticipated external borrowings by the government.
“The combination of these factors should sustain reserve growth in the coming months.
Our projection suggests that Nigeria’s reserves could rise to approximately $45 billion by year-end, provided global risk conditions remain broadly supportive and offshore flows are uninterrupted,” the report stated.
The analysts emphasized that a stronger external reserves position will grant the CBN greater flexibility in maintaining an interventionist stance in the foreign exchange market.
This is expected to support the stability of the naira in both official and parallel markets, which has been a priority amid lingering pressures from rising imports and fluctuating oil revenues.
However, experts also cautioned that the outlook is not without risks. Shifts in global financial markets, sudden reversals in portfolio inflows, or geopolitical disruptions could challenge the resilience of the reserves.
“Nevertheless, the recent build-up represents a significant achievement and a positive signal for Nigeria’s external stability at a time when many emerging markets continue to struggle with vulnerabilities,” the report added.
Meristem Securities echoed the positive outlook, projecting that Nigeria’s reserves may sustain levels above $40 billion if current trends persist.
“A stronger reserve position enhances the CBN’s ability to stabilize the naira, boost investor confidence, and support external balance.
With improving oil receipts, growing portfolio inflows, and expansion in non-oil exports, the reserves momentum is likely to be sustained in the near term,” the firm stated.
Market watchers also highlighted the critical role of the CBN’s interventions in stabilizing the currency.
Analysts at AIICO Capital noted that early-week liquidity constraints were eased by CBN interventions of approximately $50 million, coupled with inflows from oil receipts.
As a result, trading narrowed within $/₦1534.50–₦1536.00, with the naira depreciating marginally by 16 basis points week-on-week to close at $/₦1535.04.
By the close of Monday trading, the naira stood at ₦1,536.42/$, about 0.09 percent weaker than the previous day’s rate.
Analysts also stressed that the ongoing strengthening of external reserves would improve Nigeria’s capacity to manage inflationary pressures, maintain price stability, and support economic growth through improved access to foreign inputs for industries.
Furthermore, it provides a buffer against external shocks such as oil price volatility and global financial market turbulence.
While the outlook remains optimistic, analysts urge continued policy vigilance.
Sustained external reserve growth requires proactive fiscal and monetary management, diversification of the economy, and encouragement of non-oil exports to reduce dependence on petroleum revenues.
“The projected $45 billion external reserve by year-end is not just a number; it reflects Nigeria’s growing resilience in the global economic landscape.
Effective management and strategic interventions can ensure that this translates into tangible benefits for businesses and households alike,” Cowry Assets noted.
As Nigeria continues to navigate external and domestic economic pressures, maintaining the upward trajectory of reserves will be critical to sustaining currency stability, investor confidence, and long-term macroeconomic growth.