Nigeria’s external buffers weakened further as liquid foreign reserves declined by $1.155 billion in under a month, falling from $49.26 billion as at March 12 to $48.11 billion by April 9. Latest figures from the Central Bank of Nigeria highlight a renewed strain on FX liquidity, despite earlier gains that had pushed reserves close to the $50 billion mark in early 2026.
The speed of the decline of over $1 billion in less than 30 days signals that underlying pressures in the FX market remain unresolved.
FX Demand Still Outpaces Supply
At the core of the reserve drawdown is a persistent structural imbalance: demand for dollars continues to exceed supply. Import dependency, external debt servicing, and profit repatriation have sustained pressure on reserves, while inflows from crude oil exports remain constrained by production volatility.
Although Nigeria saw a sharp reserve recovery from $32 billion in 2024 to nearly $50 billion by Q1 2026, maintaining that momentum is proving difficult as external obligations and FX demand intensify.
The Central Bank of Nigeria has continued to intervene in the FX market to stabilize the naira and improve liquidity, including clearing FX backlogs. However, these actions are directly impacting reserve levels.
This suggests that while reforms have improved transparency and narrowed arbitrage gaps, Nigeria’s FX market still lacks sufficient depth. The recent decline reflects both defensive interventions and structural dollar shortages.
Fitch Signals Further Decline in Foreign Reserves Ahead
Adding a forward-looking dimension, Fitch Ratings projects that Nigeria’s external reserves could decline further to about $47 billion by the end of 2026, citing rising spending pressures and external risks.
Related – Nigeria’s 2026 Forex Outlook: From Crisis To Managed Stability
While this level would still provide roughly seven months of import cover, above peer averages, it reinforces the expectation of continued pressure rather than a sustained reserve build-up.
Investor Sentiment and External Position
The drop from $49.26 billion to $48.11 billion within weeks places Nigeria’s external position under closer scrutiny. In a high-interest-rate global environment, reserve adequacy remains a key signal for foreign investors assessing currency stability and sovereign risk.
Any sustained decline could elevate risk premiums on Nigerian assets, particularly if FX liquidity conditions tighten further.
BuyerMetrics Bottom Line
Nigeria’s $1.155 billion reserve decline, now reinforced by Fitch Ratings projection of a drop to $47 billion by 2026 points to a fragile equilibrium. The FX market is stabilizing, but not yet structurally balanced. For businesses, this means continued dollar scarcity and currency volatility. For policymakers, the urgency is clear: deepen FX inflows or risk a gradual erosion of external buffers despite reform progress.
