Financial analysts have applauded the Federal Government for pushing Nigeria’s external reserves to $41 billion, the highest level in almost four years.
However, they stressed that this achievement should be matched with efforts to ease the economic burden on citizens.
The commendation came during separate interviews in Lagos on Wednesday, where the experts described the milestone as a boost to investor confidence. They cautioned, however, that stronger reserves will mean little if inflation and poverty persist, reports DMarketForces.
Prof. Sherifdeen Tella, an economist at Babcock University, noted that the increase signals an improved economic outlook for Nigeria.
“The country boosting its reserves means greater import cover and more confidence from both Foreign Direct Investors (FDIs) and portfolio investors,” Tella explained.
He warned against over-celebrating the achievement, stressing that rising food inflation, largely linked to agricultural challenges, continues to affect millions of Nigerians.
Similarly, former CBN Director, Mr. Chris Nemedia, highlighted the importance of reserves for stabilising the local currency and maintaining strong ties with global development partners.
“It is important because reserves serve as a buffer to reduce the need for excessive foreign borrowing,” Nemedia said. “However, beyond this, government must put in more effort in reducing inflation, which is steadily eroding the purchasing power of citizens.”
On his part, Mr. Boniface Okezie, President of the Progressive Shareholders Association of Nigeria, described the development as a confidence booster for foreign investors.
According to him, improved reserves assure the ease of repatriating funds and strengthen the government’s ability to meet international debt obligations.
“We cannot be celebrating rising reserves when the impact is yet to be felt by the people. A large number of Nigerians are still in abject poverty due to the cost-of-living crisis. Government must focus on welfare and improving livelihoods,” Okezie emphasised.
Recent data from the Central Bank of Nigeria (CBN) shows the reserves climbed to $41 billion as of August 19, marking the highest level since December 2021. The steady increase has been linked to improved oil revenues and stricter monetary policies designed to stabilise the Naira.
Nigeria’s reserves had previously dipped below $34 billion in 2023 amid foreign exchange shortages and heavy debt servicing. The rebound now provides the government with a stronger cushion for imports, debt repayments, and exchange rate stability.
