Short-Term External Liabilities: Nigeria’s Usable FX Reserves Grow
Nigeria’s usable external reserves increased as the nation’s gross balance climbed to $43.535 billion, as per the Central Bank (CBN)’s latest update. The amount is the highest on record in six years, supported by accretion from foreign inflows, remittances and FX receipts from hydrocarbon sales.
In its latest rating note, S&P data highlighted that Nigeria’s usable external reserves surged, and it now covers the country’s current account payment (CAP) for about five months, up from 3.4 months in 2024.
This suggests the nation can sufficiently cover its short-term external liabilities without recourse to borrowing should the need arise.
Details from the CBN showed that out of the gross external reserves, $42.950 billion was liquid, while $585.110 million was blocked funds. Blocked funds peaked at $1.002 billion in the first quarter of 2025. Since then, the amount has been on the decline as a result of CBN FX reforms.
The external reserves pattern showed that blocked funds, that is, part of the FX that is not available due to existing commitments, have continued to decline—reflecting the absence of FX control measures.
Multinational companies and foreign portfolio investors seeking to repatriate US dollars abroad are being adequately funded by the Central Bank—reversing the trend that caused Nigeria to be removed from MSCI Index.
Gross external reserves surged by $338 million since the beginning of the year to $43.535 billion as of Thursday, according to data from the Central Bank, from $43.197 billion at the end of October.
The balance was boosted by crude oil earnings, improved non-oil inflows and a sustained trade surplus. In a rating note, S&P data showed Nigeria’s usable external reserves increased to $36.042 billion from $29.358 billion in 2024.
Reflecting improved macroeconomic performance, Nigeria’s usable external reserves can now cover its current account payments by 4.9 months without an additional inflow, up from 3.4 months in 2024, according to S&P data.
Experts told MarketForces Africa the current positions suggest the nation’s reserves are sufficient to cover its short-term external liabilities and maintain financial stability.
S&P explained that it calculates usable reserves by deducting about $8 billion from gross FX reserves to account for those borrowed from domestic banks and other resident counterparties via the forwards markets.
The ratings agency said FX that the monetary authority borrowed from non-residents via offshore markets (just under $17 billion as of 2024, according to Nigeria’s international investment position data) was not deducted in determining usable FX.
“The amounts the authority has borrowed from abroad are classified as short-term other public sector external debt, and this is reflected in our estimate of Nigeria’s gross annual external financing needs”.
The global ratings agency project usable reserves – gross reserves minus reserves held for forwards- to average about $40 billion over 2025-2028, compared with previous estimate of $33 billion.
Some analysts expect Nigeria’s external reserves to cross $44 billion in 2025 due to successive inflows from oil and non-oil sources as economic conditions and oil output strengthen.
In the global commodities space, oil prices surged as renewed Ukrainian drone strikes targeted Russia’s critical Novorossiysk export hub, heightening fears of potential supply disruptions.
US WTI crude gained 2.71% to $60.28/bbl, while Brent crude rose to $64.54/bbl. The escalation forms part of Ukraine’s intensified campaign on Russian refinery infrastructure.
Analysts expect further upside risks as upcoming U.S. sanctions on Rosneft and Lukoil, effective November 21, threaten to constrain Russian supply even more. # Short-Term External Liabilities: Nigeria’s Usable FX Reserves Grow Champion Breweries Rises by 11.5% Amidst Free Float Concern
