Foreign Reserves Surge by $7.69bn in One Year, 23% YoY

Nume Ekeghe

Nigeria’s foreign reserves recorded an impressive $7.69 billion gain between January 10, 2024, and January 10, 2025, marking a 23 per cent year-on-year increase. The gross reserves, which began at $33.08 billion at the start of 2024, closed the period at $40.75 billion, underscoring the strengthening of the country’s external financial position amidst evolving global and domestic economic conditions.

The trajectory of reserve growth in 2024 reflected a steady and deliberate consolidation of external buffers. At the close of Q1 2024, reserves rose to $34.45 billion, representing a modest 4.1 per cent gain over three months. This initial growth mirrored heightened crude oil prices, which supported stronger foreign exchange inflows and improved export receipts.

By mid-year, the reserves had risen to $35.70 billion, reflecting a cautious but upward momentum as monetary policy adjustments began to take effect. The Central Bank of Nigeria’s (CBN) efforts to stabilise the naira by attracting foreign portfolio investments and enhancing diaspora remittance flows contributed significantly to this trend.

The second half of 2024 saw accelerated reserve accumulation, with the balance breaching the $36 billion mark in August. By the end of Q3, reserves climbed further to $38.35 billion, marking a 16 per cent gain compared to January levels. This growth was underpinned by sustained oil market rallies and increased foreign direct investments, particularly in energy and infrastructure sectors.

The final quarter of the year was characterized by a sharper upward trajectory. Reserves surpassed $39 billion in October, reaching the $40 billion milestone by November, a level not seen in recent years. The consistent appreciation in reserves through December, peaking at $40.88 billion, reflects the robustness of fiscal and monetary interventions aimed at bolstering external stability.

As of January 10, 2025, the reserves settled at $40.75 billion, reinforcing confidence in Nigeria’s ability to weather external shocks. The cumulative 23 per cent annual increase demonstrates improved economic resilience despite global headwinds such as fluctuating commodity prices and tighter financial conditions in advanced economies.

The steady growth in reserves aligns with Nigeria’s broader macroeconomic goals, including maintaining exchange rate stability and ensuring adequate coverage for critical imports. It also signals a healthier fiscal outlook, providing a buffer for external debt servicing and boosting investor confidence in the Nigerian economy.