Nigeria’s external reserves have declined by $850 million within three weeks, according to data from the Central Bank of Nigeria (CBN). Market participants link the dip to sustained foreign exchange (FX) pressures and increased fiscal activity tied to the election cycle.
The reserves dropped from $50.03 billion on March 11, 2026, to $49.18 billion as of April 1, 2026—halting a nine-month growth streak that began in July 2025.
Forex traders say the CBN’s continued intervention in the FX market to stabilise the naira is a key driver, as dollar injections typically draw down reserves. Capital flow volatility has also weighed on reserves, with some foreign portfolio investors exiting or reacting to global interest rate shifts.
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President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, noted that FX interventions and external debt repayments have added pressure, alongside election-related spending and policy uncertainty.
Similarly, forex trader Basir Kanjiwa said repeated interventions to defend the naira continue to erode reserves, while capital outflows and weak inflows persist despite improved oil prices.
Analysts say the trend reflects overlapping pressures—FX interventions, capital outflows, and external obligations—slowing the pace of reserve accretion.
Nigeria’s structural vulnerabilities remain evident. Heavy reliance on oil exports exposes reserves to price and production shocks, while high import dependence sustains FX demand.
Experts recommend boosting non-oil exports, improving FX transparency, and better integrating BDC operators into the market framework to ease pressure on reserves.
Despite the dip, Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, downplayed concerns, describing the decline as marginal.
“We are talking about less than a two percent drop… Nigeria is still in a fairly comfortable position,” he said, attributing the movement partly to routine external debt repayments.
The CBN, in its 2026 macroeconomic outlook, had projected reserves to rise to $51.04 billion, driven by stronger oil earnings, FX reforms, diaspora remittances, and improved inflows.
CBN Governor Olayemi Cardoso had earlier disclosed that reserves peaked at $50.45 billion in mid-February 2026—the highest level in 13 years—providing an import cover of 9.68 months.
However, recent pressures underscore the fragility of that outlook amid election-driven spending and persistent FX market demand.
