Nigeria’s FX Fortunes Turn: CBN Forecasts Reserves Climbing to $51 Billion in 2026
ABUJA — Nigeria’s external buffers are set to strengthen significantly in 2026, with the Central Bank of Nigeria (CBN) projecting foreign exchange reserves to rise to approximately $51.04 billion — a marked increase from the estimated $45.01 billion expected at the end of 2025. The upward revision reflects the fruits of comprehensive market reforms, expanding export receipts and an improving external sector outlook.
In its recently published 2026 Macroeconomic Outlook, the CBN pointed to a sequence of fiscal and monetary adjustments designed to stabilise the FX market, attract foreign capital and build stronger external buffers. These include ongoing foreign exchange (FX) market reforms, expanded domestic refining capacity and enhanced transparency in rate discovery — steps that have already helped narrow the premium between official and parallel FX rates.
Reforms Deliver Early Wins
The resilience of Nigeria’s external position in 2025 followed years of volatility, during which the naira experienced bouts of pressure and FX reserves fluctuated as the central bank intervened to manage market conditions. Recent policy shifts, notably the unification and liberalisation of FX windows, have played a pivotal role in attracting portfolio inflows and bolstering foreign exchange liquidity.
CBN Governor Olayemi Cardoso has underscored that the improved reserve trajectory is built on stronger crude oil earnings, rising non-oil export flows, steadier remittances from the diaspora, and a more competitive naira. These factors, coupled with broader structural reforms, have helped position Nigeria for a stronger external performance in 2026.
Domestic refining gains — particularly from Nigeria’s expanding capacity at the Dangote Refinery — are also expected to ease FX pressures by reducing reliance on imported petroleum products, freeing up dollars for reserve accretion.
Growth, Stability and Policy Confidence
The central bank’s outlook reflects optimism that Nigeria’s economic growth will accelerate to around 4.49 percent in 2026, driven by private-sector activity, investment, and increased production in the oil and gas sector. This anticipated expansion, alongside a gradual easing of headline inflation toward the low teens, is seen as further anchoring investor confidence and strengthening macroeconomic fundamentals.
Importantly, the projected reserve build-up comes amid a broader effort to improve Nigeria’s external balance, which recorded a balance of payments surplus in 2025. This surplus reflects stronger export-led inflows and remittances that have helped cushion the economy against external shocks.
Risks and the Road Ahead
Despite the positive forecast, policymakers acknowledge downside risks linked to global financial market volatility and potential disruptions in oil production or export demand. Sustaining capital inflows will also depend on continued policy credibility and the pace of structural reforms.
Nonetheless, the CBN’s projection of a $51 billion FX reserve in 2026 represents a meaningful milestone for Africa’s largest economy, signalling a turning point after years of external vulnerabilities. Stronger reserves not only provide enhanced import cover and a buffer against shocks but also help underpin broader efforts to stabilise the naira, improve fiscal planning, and attract long-term foreign investment.
As Nigeria navigates the evolving global economic landscape, the success of its FX market reforms will be critical to sustaining investor confidence and ensuring that external stability contributes to broader economic resilience.
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