Central Bank Forecasts $51bn External Reserves In 2026

The Central Bank of Nigeria (CBN) has projected that the country’s external reserves will rise to $51.04 billion in 2026, supported by sustained foreign exchange market reforms, stronger export earnings, steady remittance inflows and improved domestic refining capacity.

The projection is contained in the Bank’s Macroeconomic Outlook for Nigeria, 2026, titled “Consolidating Macroeconomic Stability Amid Global Uncertainty,” released on Tuesday.

According to the apex bank, the expected increase in reserves builds on the positive external sector performance recorded in 2025, when the balance of payments posted an estimated surplus of $5.80 billion, while external reserves rose to $45.01 billion, compared with $40.19 billion in 2024.

The Bank noted that relative stability in the foreign exchange market during 2025 was driven by domestic economic reforms, higher capital inflows, increased export receipts and expanding local refining capacity. These factors, it said, are expected to strengthen further in 2026 and support reserve accumulation.

Looking ahead, the CBN projected that the current account surplus will rise sharply to $18.81 billion in 2026, underpinned by strong exports, steady diaspora remittances, increased oil and gas output, improved domestic refining capacity and rising global demand from key trading partners.

The outlook also showed that portfolio investment inflows and external borrowings are expected to keep the financial account in a net borrowing position of $10.15 billion, while the International Investment Position (IIP) is projected to record a net borrowing position of $69.58 billion in 2026, as attractive yields are anticipated to boost capital inflows.

The CBN stressed that ongoing reforms in the foreign exchange market would be critical to sustaining exchange rate stability, deepening investor confidence and supporting further accretion to external reserves.

However, the apex bank issued strong warnings to fiscal authorities, noting that the external and macroeconomic outlook could be undermined if fiscal operations are not carefully managed. It cautioned that inflation projections and exchange rate stability could be derailed if government expenditure rises disproportionately above established benchmarks or if fiscal deficits widen significantly.

The Bank emphasised the need for fiscal authorities to align borrowing plans with fiscal rules and debt sustainability thresholds, warning that excessive borrowing could exert pressure on the external position and weaken macroeconomic stability.

“To boost fiscal operations, there is a need to broaden the tax net and establish a more efficient and equitable tax regime through the effective implementation of the Nigeria Tax Act, 2025,” the CBN stated, adding that debt strategy must remain consistent with long-term sustainability objectives.

The outlook also warned that adverse global developments — including renewed geopolitical tensions, re-escalation of protectionist trade policies and sudden deterioration in global financial market conditions — could trigger capital flow reversals, weaken the trade balance and pose risks to exchange rate stability.
Despite the risks, the CBN reaffirmed its commitment to deploying appropriate monetary and macro-prudential policy instruments to attract foreign investment, consolidate foreign exchange market stability and strengthen Nigeria’s external buffers, while maintaining close coordination with fiscal authorities to safeguard macroeconomic stability in 2026.

Commenting on the development, Lagos-based fiscal policy analyst Dr Tope Adigun described the outlook as “aspirational but not impossible,” noting that inflation easing below 13 per cent would mark a major improvement if sustained.

He said the downward inflation trajectory is encouraging, especially the emphasis on food supply and energy prices. He, however, cautioned that inflation is not only a monetary phenomenon in Nigeria. “Security, logistics costs and fiscal discipline will determine whether the projections materialise,” he said.

He added that while foreign exchange stability has improved, confidence remains fragile, noting that any shock to oil prices or disruptions in production could quickly reverse gains.

Also, a financial economist at Ebonyi State University, Dr Nelson Atama, said the growth projections hinge heavily on oil-sector assumptions that have historically proven volatile.

“The expectation of higher crude output and stable energy prices is reasonable on paper, but Nigeria’s oil sector has disappointed repeatedly. Improved security and monitoring systems like the PMCC are positive steps, but sustained results will take time,” he noted.

Atama also cautioned against over-reliance on large projects.

“Dangote Refinery will certainly boost GDP figures, but broad-based growth requires SMEs, agriculture and manufacturing to feel the impact of lower inflation and cheaper credit,” he stressed.

On his part, a financial economist at Auchi Polytechnic, Zakari Mohammed, said the projections reflect a turning point but warned against complacency.

“We are seeing early signs of macroeconomic stabilisation: FX stability, easing inflation and improving external buffers. But growth of 4.5 per cent is not transformative for a country growing at Nigeria’s population rate,” he stated.