Cardoso: Nigeria’s Net Foreign Reserves Has Surpassed $40bn

Nigeria's net foreign reserves have dramatically increased to $40 billion, a significant rise from the roughly $3 billion recorded when Central Bank of Nigeria (CBN) Governor Olayemi Cardoso assumed office in 2023. Cardoso announced this substantial growth, noting that the country's gross external reserves have also climbed to approximately $52 billion, offering about 10 months of import cover.

Cardoso made these disclosures in Lagos, coinciding with the CBN's release of comprehensive operational guidelines for its electronic foreign exchange purchase platform for Bureau De Change (BDC) operators. These new guidelines include a real-time transaction monitoring system, stricter Know-Your-Customer (KYC) requirements, and enhanced compliance measures designed to boost transparency, regulatory oversight, and efficiency in the retail foreign exchange market.

“

Anybody that wants to argue about what the impact of these reforms have been, go and look at the results. As of yesterday, we were hovering, I believe, about $52 billion. When we started, the net reserves figure was in the region of about $3 billion plus. And if you remember, that was a figure that was published at the time by J.P. Morgan and created a lot of panic in the system. More recently, the net reserves figure is in the $40bn range. So, it’s a long and difficult journey.

Speaking at the BusinessDay CEO Forum, the CBN Governor also projected that diaspora remittances are on track to reach $1 billion per month by the end of the year. He observed that the foreign exchange market has achieved sufficient liquidity, allowing it to operate with minimal intervention from the CBN. Furthermore, Cardoso affirmed that bank recapitalization and regulatory oversight will continue as ongoing efforts to bolster the banking sector's resilience.

“

Today’s level of reserves is, I believe, about 10 months of import cover. Anybody coming to invest in Nigeria, these are the things they look at in determining whether it is worth taking a position in your currency. Doing this consistently is what is giving confidence to not just internal stakeholders, but those who also operate internationally.

According to Cardoso, the country's strengthened external position validates the reforms implemented over the past three years, particularly the unification of the foreign exchange market and the restoration of investor confidence. He recalled inheriting an FX market plagued by multiple exchange rates, opacity, and severe shortages, which has since been transformed into a more transparent, market-driven system. "Anybody that wants to argue about what the impact of these reforms have been, go and look at the results," he stated, highlighting the current reserve figures compared to the initial $3 billion that caused panic when published by J.P. Morgan.

The current reserve level significantly bolsters Nigeria's external buffers and enhances its appeal to foreign investors. Cardoso emphasized that the reserve position, providing about 10 months of import cover, is a key metric for potential investors assessing the stability of the Nigerian currency. He concluded that consistent positive economic indicators are building confidence among both domestic and international stakeholders. Another notable outcome of the reforms, he added, is the restoration of confidence in Nigeria's payment system, enabling seamless card usage for Nigerians traveling abroad.

“

When you travel t