Nigeria’s Foreign Reserves Top $50bn, Increase by $4.54bn
Nigeria’s foreign reserves topped $50 billion in the first week of June due to sustained FX receipts across key sources, data from the Central Bank of Nigeria (CBN) revealed.
According to data from the CBN, the gross external reserves reached $50.307 billion last week, the highest amount on record since March, 2026.
The surge was driven by an additional $457 million in inflows reported since the beginning of June, from $49.58 billion at the end of May 2026. In 2026, Nigeria’s gross external reserves increased by $4.535 billion, up from $45.502 billion in 2025 to $50.037 billion last week.
The surge, according to a slew of analyst reports, has been attributed to inflows from hydrocarbon FX receipts, remittances and other related sources.
Since February 2026, Nigeria has seen a significant oil windfall as the US-Iran war has triggered a global energy crisis, with Africa’s most populous country on the supply side.
Global ratings agencies predict strong fiscal performance on account of sustained increase in oil production, and higher oil prices since February.
Foreign investors continue to flood Nigeria’s capital market to optimise their global portfolio performance as hard currencies continue to offer elevated yields on naira assets.
The recent capital importation report showed that Nigeria recorded a strong resurgence in foreign capital inflows in Q1 2026, with total capital importation rising to $10.37 billion.
The amount represents an 83.83% year-on-year increase from $5.64 billion in Q1 2025 and a 60.70% quarter-on-quarter increase from $6.44 billion in Q4 2025.
This marks the highest quarterly capital importation since Q1 2019, Cowry Asset Management Limited said, reflecting improved investor sentiment driven by macroeconomic reforms, foreign exchange market adjustments, and broader financial system stability.
The investment firm noted that the increase was overwhelmingly driven by portfolio investments, which accounted for $9.86 billion or 95.1% of total inflows.
Details from the report revealed that foreign investors showed a strong preference for Nigeria’s short-term instruments, supported by elevated yields, tighter monetary policy, and improved FX liquidity.
The CBN’s sustained liquidity management measures, including Open Market Operations and Treasury bill issuances, played a key role in maintaining attractive returns for foreign portfolio investors.
Within portfolio flows, the money market segment attracted $6.50 billion, reflecting strong demand for high-yield, low-risk instruments in a tight monetary environment.
The bond market also recorded significant inflows of $3.23 billion, supported by rising yields, which averaged 15.78% in Q1 2026, up from 14.99% in the previous quarter.
Despite inflationary pressures and sovereign risk considerations, Nigeria’s fixed-income market remained highly attractive on a risk-adjusted basis.
In contrast, foreign equity inflows remained relatively weak at $131.8 million, even though the Nigerian stock market posted a strong performance during the quarter, with the NGX All-Share Index rising by 29.35% to 203,791.18 points.
Similarly, Foreign Direct Investment (FDI) remained subdued at $135.08 million, indicating continued structural and institutional challenges in attracting long-term productive capital into the economy.
Sectorally, the Banking sector dominated inflows at 72.79%, followed by the Financing sector, with a small share going to manufacturing.
The United Kingdom, the United States, and South Africa were the major sources of capital inflows, while key financial institutions such as Standard Chartered Bank, Stanbic IBTC, and Rand Merchant Bank accounted for the largest shares.
Overall, while the surge in capital importation reflects improved investor confidence and policy credibility, the heavy reliance on short-term portfolio flows highlights persistent vulnerability to sudden capital reversals and underscores the need to strengthen FDI inflows for sustainable growth.
“To sustain the momentum and attract more durable investment flows, policymakers must intensify efforts to address longstanding impediments to investment”, Cowry Asset said.
Analysts explained that key priorities include improving security, reducing bureaucratic bottlenecks, strengthening infrastructure, ensuring regulatory consistency, maintaining stability in the foreign exchange market, and promoting broader sub-national investment opportunities to reduce concentration risk.
Successfully addressing these structural constraints will be essential for converting short-term capital inflows into long-term productive investments capable of driving sustainable economic growth, employment creation, and industrial development, Cowry Asset Limited added.
