Analysts have expressed optimism that the steady growth of Nigeria’s external reserve for several months will be sustained in 2026 despite the upcoming general election.
They said that the various reforms by the government have brought stability and confidence, thereby causing improvement in the country’s external reserves.
They, however, noted that while the reserves can be sustained in the short term, sustaining the momentum throughout the election year will depend on discipline on the part of the government.
In an exclusive chat with Naijaonpoint, the founder/Chief Executive Officer of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, hinted at a positive outlook for Nigeria’s external reserves as he does not see anything derailing the forex and fiscal reforms that have brought about stability and improvement in external reserves.
Yusuf said, ‘’Well, the outlook for me is positive because I don’t see anything derailing these reforms [forex reform, fuel subsidy etc]. It is these reforms that have brought about stability. And it’s this stability that has inspired confidence. It is the confidence that has allowed the improvement in the reserves. The reserves are not so much coming from oil, though. I don’t have the full breakdown. But my sense is that the reserves are coming from largely outside the oil – FDI, portfolio, diaspora flows, non-oil exports etc. Quite a lot is happening outside traditional sources of forex.
‘’So, those things are anchored on reforms. For as long as that is happening and I don’t see that changing, even with the so-called election year or whatever, I don’t see anything changing that in any drastic way.’’
Also, lending his voice to the conversation, a licensed forex trader, Aminu Chindo, said the growth in the external reserves can only be sustained in 2026 if the Central Bank of Nigeria (CBN) avoids excessive FX intervention, fiscal authorities are restrained from spending pressures and the FX reforms are not reversed.
Chindo said, ‘’Historically, election cycles in Nigeria tend to introduce policy uncertainty, FX demand pressure, and capital flow reversals. So, while reserves can be sustained in the short term, maintaining this momentum throughout an election year will depend on discipline.
‘’Reserves will be sustained only if the CBN avoids excessive pre-election FX intervention, fiscal authorities restrain election-related spending pressures, and FX reforms remain consistent, not reversed for political convenience.’’
Nigeria’s external reserves have crossed the $46 billion mark for the first time in about eight years, highlighting the steady growth the reserve has been recording since 2025.
According to the latest data from the Central Bank of Nigeria (CBN), the country’s external reserve has increased by about $510 million in 22 days, moving from $45.502 billion on December 31, 2025, to $46.012 billion on January 22, 2026.
Also, data tracked by Naijaonpoint shows that Nigeria’s external reserves were last at this level on August 27, 2018, when it stood at $45.9 billion.
The reserve build-up signals stronger buffers for import cover and currency stability, reflecting steady inflows and improved foreign exchange management since the forex reforms began, as the country prepares for a general election.
The CBN data also suggests a notable turnaround from the volatility experienced during the early phase of the new forex regime, with the reserves closing at about $45.5 billion in 2025, having opened the year at roughly $40.8 billion.
Nigeria’s external reserve position is a key indicator of the country’s ability to defend the naira and meet its external obligations.
Naijaonpoint estimates that at $46 billion, Nigeria’s reserves can cover about 15 months of goods imports, or roughly 10 months when services are included.
Naijaonpoint estimates that at $46 billion, Nigeria’s reserves can cover about 15 months of goods imports, or roughly 10 months when services are included.
Meanwhile, Yusuf insisted that the macro-economic stability will likely be maintained unless the country is faced with some negative external factors like a crash in crude oil prices. He revealed that the move by the federal government to incentivize more investment in the oil and gas sector will lead to more forex revenue.
‘’In any case, the government is trying to incentivise more investment in oil and gas. More revenue, particularly forex from there. I listened to the remarks of the global CEO of Shell when he visited the President. You could feel his excitement about the fact that the President is personally getting involved in supporting investment in oil and gas, and that is very critical. Because these IOCs have more muscle when it comes to investment, unlike our locals. Our locals are trying, but you can’t compare them to the IOCs,’’ he said.
Yusuf added that he sees no serious or immediate risk that will hinder the growth of the external reserve.
Chindo, who described the increase of the external reserve to over $46 billion as a positive and confidence-boosting signal, attributed this to three major factors.
He listed the factors driving this recent build-up to the external reserve to include Improved FX inflows, higher oil receipts, even if production remains below potential, increased remittances through official channels and renewed interest from foreign portfolio investors following FX market reforms.
Naijaonpoint had, in December 2025, reported that the CBN had, in its 2026 Macroeconomic Outlook for Nigeria, projected that Nigeria’s external reserve would rise to $51.04 billion in 2026, supported by stronger oil earnings, foreign exchange (FX) market reforms, and improved external inflows.
The apex bank said the outlook reflects higher oil revenues, increased bond issuance, sustained diaspora remittances, FX market reforms, and expanded domestic refining capacity.
The CBN stated, “The external reserves is projected at US$51.04 billion in 2026, compared with US$45.01 billion in 2025. The external reserves is expected to be boosted by reduced pressure in the FX market based on the anticipated rise in oil earnings, sovereign bond issuance, and diaspora remittance inflow.’’
The apex bank linked the positive external reserve outlook to expanded domestic refining, notably the Dangote Refinery’s planned capacity increase to 700,000 bpd in 2025 and a longer-term target of 1.4 million bpd.
According to the CBN, increased local refining would reduce Nigeria’s dependence on imported petroleum products, lowering demand for foreign exchange and easing pressure on external reserves.