Massive Boost for Naira as Nigeria’s External Reserves Rise to Highest Level in 8 Years
- Nigeria's foreign exchange reserves reached $46.012 billion, marking the highest level in eight years
- Crude oil production also increased to 1.64 mbpd in 2025, driven by petroleum reforms and investments
- Analysts project cautious optimism for 2026 amid OPEC output caps and declining oil theft
Nigeria’s foreign exchange reserves have climbed to their highest level in eight years, offering renewed optimism for the naira and strengthening the country’s external buffers amid ongoing economic reforms.
Reserves climb above $46bn
Data from the Central Bank of Nigeria (CBN) shows that gross external reserves rose to $46.012 billion as of January 22, 2026, marking an increase of about $510 million since the start of the year.
Source: Getty Images
This level was last recorded in August 2018, underscoring a notable turnaround in Nigeria’s external position.
The reserves stood at $45.5005 billion on December 31, 2025, buoyed by reforms in the oil and gas sector and improved foreign currency inflows.
About 1.18 per cent of the reserves are currently held in blocked funds, according to CBN figures.
Oil reforms begin to pay off
A major driver of the reserve build-up has been higher crude oil production following the implementation of the Petroleum Industry Act (PIA).
The reforms have improved transparency, reduced disruptions, and attracted fresh investments into upstream operations.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigeria’s crude oil production, including condensates, averaged 1.64 million barrels per day (mbpd) in 2025.
This represents a 5.81 per cent year-on-year increase from 1.55 mbpd recorded in 2024.
However, production dipped slightly on a month-on-month basis in December, falling by 3.42 per cent to 1.54 mbpd from 1.60 mbpd in November, impacting foreign exchange receipts from hydrocarbon sales during the period.
Stronger output without condensates
When condensates are excluded, crude oil output rose even more sharply. Production increased by 8.21 per cent year-on-year, from 1.34 mbpd in 2024 to 1.45 mbpd in 2025.
This improvement supported government revenues and fiscal performance, even as borrowing continued across both local and external debt markets.
Export terminals record solid gains
A closer look at 2025 production data shows strong performance across Nigeria’s major export terminals.
The Forcados terminal recorded a 12.08 per cent increase, with output rising to 8.56 million barrels from 7.64 million barrels in 2024.
Production at the Escravos terminal grew by 3.98 per cent to 4.29 million barrels, while Qua Iboe output surged by 16.69 per cent to 4.42 million barrels.
The Bonny terminal delivered the strongest growth, with production jumping by 25.19 per cent to 7.41 million barrels. Brass terminal output also climbed by 18.04 per cent, averaging 1.06 million barrels in 2025.
Source: Getty Images
Outlook remains cautiously optimistic
Analysts expect crude oil production to improve modestly in 2026, averaging around 1.71 mbpd. Most investments in 2025 focused on infrastructure rehabilitation and smaller fields, limiting the scope for a dramatic output jump.
While authorities remain hopeful of pushing production toward 2.06 mbpd, OPEC’s decision to cap Nigeria’s crude output at 1.50 mbpd (excluding condensates) in 2026 highlights the need for large-scale investments to unlock stronger growth.
Still, the sustained decline in oil theft and pipeline vandalism remains a positive signal, supporting stability in the sector and helping to shore up Nigeria’s foreign reserves and the naira.
Expert predicts new naira to dollar exchange rate
Legit.ng earlier reported that the naira is projected to trade between N1,350 and N1,450 per US dollar in 2026.
Yemi Kale, Chief Economist at the Africa Export-Import Bank (Afreximbank), made the projection while delivering the keynote address at the FirstBank Nigeria Economic Outlook 2026.
Kale outlined scenario-based forecasts for the USD/NGN exchange rate, taking into account oil prices, foreign-exchange (FX) inflows, inflation trends, and policy consistency.
Source: Legit.ng
