Nigeria’s foreign exchange reserves are projected to maintain an upward trajectory into 2026, providing renewed support for the naira and reinforcing investor confidence, as the Central Bank of Nigeria (CBN) forecasts external reserves to rise to $51.04 billion, driven largely by ongoing foreign exchange market reforms.
In its Macroeconomic Outlook released on Tuesday, the apex bank said sustained reforms in the FX market are expected to underpin exchange rate stability while strengthening the country’s external buffers.
“Reforms in the foreign exchange market are expected to sustain exchange rate stability, while external reserves is projected to increase to US$51.04 billion,” the CBN stated.
According to the report, Nigeria’s external reserves are estimated to close 2025 at $45.01 billion, up from $40.19 billion in 2024, implying a projected increase of $6.03 billion over the next 12 months.
Stronger Reserves, Firmer Naira
Economists note that rising external reserves typically translate into greater capacity for currency defence, improved market confidence, and reduced volatility in the FX market. For Nigeria, a firmer naira would ease pressure on import-dependent businesses, reduce foreign exchange losses, and improve corporate balance sheets—particularly in manufacturing, energy, and consumer goods sectors.
After years marked by currency instability, dwindling reserves, and subdued growth, Africa’s largest economy appears to be staging a gradual turnaround, supported by policy recalibration and structural reforms.
Growth Outlook Improves
The CBN projects Nigeria’s economy to grow by 4.49 percent in 2026, up from an estimated 3.89 percent in 2025 and 3.38 percent in 2024, signalling strengthening momentum.
“The projection is hinged on continued gains from broad-based structural reforms and a gradually easing monetary policy stance,” the bank noted.
It added that the improving outlook is expected to enhance the business environment, deepen investor confidence, and support private-sector-led growth.
The apex bank also highlighted the oil and gas sector as a key growth driver, citing improved security surveillance, rising investments, and gains from expanded domestic refining capacity as critical tailwinds.
Inflation Targeting Framework Takes Shape
On inflation, the CBN disclosed plans to formally adopt an inflation targeting framework, aiming to bring headline inflation down to 13 percent by 2027 as part of efforts to tame persistent price pressures and restore purchasing power.
Under the phased approach, inflation targets are expected to ease from 18.5 percent in 2025 to 13 percent within two years, a move the bank says will enhance policy credibility and better anchor expectations across markets and households.
“Inflation is expected to continue its downward trend in 2026,” the CBN said, citing FX stability, easing energy prices, the lagged impact of earlier interest rate hikes, and improved policy coordination.
The moderation in inflation is expected to be driven largely by declining food prices and softer Premium Motor Spirit (PMS) costs, supported by increased competition in the downstream oil sector.
Nigeria’s inflation rate stood at 14.45 percent in November, marking the eighth consecutive monthly decline and the lowest level recorded since 2020, prior to the rebasing of the Consumer Price Index.
Cautious Optimism
While analysts urge caution given global economic uncertainties and oil price volatility, the CBN’s outlook suggests cautious optimism, anchored on reform continuity, reserve accretion, and macroeconomic stabilisation.
If sustained, the combination of rising reserves, easing inflation, and stronger growth could mark a decisive shift from crisis management to medium-term economic consolidation.
Naija247news Staff ✔
Godwin Okafor is the Publisher & CEO of Naija247news Media Group LLC, an independent investigative news platform delivering accurate, data-driven reporting on Nigerian and global politics, economy, finance, and business. Founded in October 2010, Naija247news specializes in developmental journalism, providing timely insights and analysis to readers across Nigeria and the diaspora.
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