The CEO of Economic Associates, Dr. Ayo Teriba, has called for greater transparency from the federal government regarding the country’s external reserves position, emphasising the importance of focusing on net reserves rather than gross reserves to provide a clearer picture of Nigeria’s economic health.
In an interview with LEADERSHIP, Dr. Teriba highlighted the crucial distinction between gross and net reserves. He pointed out that the government had predominantly reported gross reserves figures for the past two years, which he considered misleading.
Last week, LEADERSHIP reported that Nigeria’s external reserves surged to $41 billion, marking the highest level in four years.
According to the latest data from the Central Bank of Nigeria, the exchange reserves hit $41.046 billion as of August 20, 2025, the highest since December 2, 2021.
The reserves had since the ending of 2021 been on the decline as the apex bank dipped into it to support the naira, depleting it to nearly $31 billion last year, before it began a steady accretion on the various reforms of the CBN.
Commenting on the development, Dr. Teriba said, “We have moved beyond reporting gross external reserves because for 2 years, since 2023, the government was reporting gross reserves, which they met at $33 billion,” he said. “By August last year, they were celebrating the fact that it was $42 billion.”
However, according to Dr. Teriba, the celebrated figures of gross reserves do not tell the whole story. “But JP Morgan reminded them that saying the gross reserves $33 billion in 2024 was misleading because $33 billion was gross reserves; net reserves were less than $4 billion because many of the items that were in the reserves were securitised. But the effective reserves were less than $4 billion.”
He explained that net reserves—the actual liquid assets available—are the key indicator affecting Nigeria’s exchange rate stability. “Then, the federal government was challenged to stop telling us what was happening to gross reserves and tell us what the situation was with net reserves. They kept postponing throughout last year, even though they were challenged at the IMF/World Bank meetings in Washington.”
Dr. Teriba noted the government’s eventual response, stating, “By February this year, they said that net reserves had improved from less than $4 billion to above $23 billion.” He also highlighted the confusion around earlier public statements: “By the end of last year, the president was talking about $42 billion reserves. But about half a year ago, he spoke about $23 billion.”
Highlighting the government’s continued focus on gross figures, Dr. Teriba said, “So, telling us that gross reserves have moved from $39 billion to $41 billion means nothing. What this means something is the net reserves; and the reason the exchange rate is stable is the improvement in the net reserves from less than $4 billion to over $24 billion.”
He concluded with a direct appeal for updated and transparent data on net reserves, especially as the country is already in the third quarter of 2025. “So, the update we need to hear is what has happened to net reserves since that report they gave us that it’s above $23 billion, which was in the 1st quarter of this year. We are in the 3rd Quarter now, where are the net reserves now, because that is the one that matters for the outlook of the exchange rate, not the gross reserves,” he said.
