$43.4bn Reserve Surge Strengthens Naira, Restores Investor Confidence

Lagos: Nigeria’s foreign reserves have surged to $43.4 billion, sending a strong signal to global markets and breathing new life into the Naira. 

Experts say the boost is helping to restore investor confidence and reinforce the country’s economic resilience amid global uncertainty.

This was disclosed to journalists on Sunday in Lagos, while commending the Federal Government and the Central Bank of Nigeria (CBN) for the steady improvement in external reserves.

The experts noted that the achievement reflects growing fiscal discipline and the positive impact of ongoing reforms.

They also stressed the need for the government to channel the gains toward boosting production, creating jobs, and easing the cost of living.

The Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the development demonstrated an increasing confidence in Nigeria’s economy from both local and foreign investors.

Yusuf stated that the increase also demonstrated fiscal discipline and effective policy implementation.

The external reserves dropped to $33.28 billion as of September 2023, from $37.1 billion recorded in December 2022.

He noted that a significant portion of the inflows originated from autonomous sources, including foreign portfolio investment (FPI), foreign direct investment (FDI), and diaspora remittances.

“This is an indication that investors’ and citizens’ confidence is improving, which is good for the general economy,” Yusuf said.

He advised that while macroeconomic fundamentals are improving, government attention should now shift toward policies that directly impact the welfare of Nigerians.

“The government should focus on addressing the cost-of-living challenge so that the increase in external reserves can translate into tangible benefits for households and businesses,” he said.

Yusuf also called for improved fiscal discipline and efficient public spending to prevent leakages and ensure better management of public debt.

Former President of the Chartered Institute of Taxation of Nigeria (CITN), Mr McAntony Dike, also commended the government for raising the nation’s reserves, describing it as a step toward long-term economic stability.

Dike said Nigeria must now focus on improving the business environment to attract more domestic and foreign investments.

“When investors see consistency and a supportive business climate, they are encouraged to inject capital, which in turn drives growth and development,” he said.

He added that enhanced security and investment in digital monitoring platforms were vital to ensuring a safe environment for businesses to thrive.

Similarly, the founder of the Independent Shareholders Association of Nigeria (ISAN), Mr Sunny Nwosu, said the increase in foreign reserves was a positive signal for the economy.

He, however, urged the government to use the opportunity to invest in key infrastructure that could boost local production, create jobs, and enhance economic resilience.

Nwosu stressed that investing in agriculture, power, and manufacturing would help ensure that the benefits of a stronger reserve position are reflected in the everyday lives of Nigerians.

The CBN recently announced that the country’s foreign exchange reserves surged to a five-year high of $43.4 billion, despite efforts to clear FX backlogs and stabilise the Naira.

The CBN Deputy Governor, Mr Mohammed Abdullahi, disclosed this during the Nigeria Investors Forum, held on the sidelines of the IMF–World Bank Annual Meetings in Washington, D.C., for Economic Policy.

Abdullahi stated that, as of October 10, the reserves were sufficient to cover 11 months of imports.

He added that the Naira had remained stable, with the gap between the official and parallel market rates narrowing to less than three per cent, compared to over 50 per cent in 2022.

He also noted that inflation had declined to 18.02 per cent, the lowest in three years, while capital inflows and remittances continued to strengthen Nigeria’s balance of payments.