By Iroyin Yoruba Television
The Central Bank of Nigeria has attributed the continued strengthening of the country's external reserves to improved remittance inflows, increased investment and a broader shift towards formal financial channels, as the apex bank said its reforms were beginning to strengthen Nigeria's external financial position.
The CBN disclosed the development on Tuesday, October 6, 2026, during its special engagement at the ongoing 21st Abuja International Trade Fair.
According to the central bank, Nigeria's foreign reserves had reached $55.25 billion as of September 18, representing the highest level recorded in 18 years.
The development is significant for businesses because the level of foreign reserves is closely watched by investors, importers, manufacturers and other companies that depend on access to foreign exchange.
Higher reserves can provide greater confidence that a country has the capacity to meet external obligations and support foreign-exchange market operations.
The CBN's Director of Stakeholder Engagement and Institutional Relations Department, Hakama Sidi-Ali, attributed the improvement to measures aimed at increasing foreign exchange inflows and encouraging transactions to move through formal financial channels.
She said stronger remittance flows and investment inflows were among the factors contributing to the growth in reserves.
The development comes after a period in which Nigerian businesses faced significant foreign-exchange pressures, particularly companies that depend on imported machinery, raw materials, spare parts and other inputs.
Foreign-exchange availability has therefore remained a major business concern.
When companies struggle to obtain foreign currency, import costs can increase and production planning can become more difficult.
Manufacturers may have to adjust prices when the cost of imported inputs rises, while businesses that depend on international suppliers can experience delays when they cannot secure foreign exchange quickly.
The strengthening of external reserves could therefore have implications for business confidence if it contributes to greater stability in the foreign-exchange market.
The CBN has continued to emphasise price stability and the strengthening of the financial system as central objectives of its monetary policy.
The apex bank recently reduced its Monetary Policy Rate from 26.5 per cent to 23 per cent, while also adjusting the Standing Facilities Corridor around the new policy rate.
The reduction represented a major shift in the monetary policy environment and was closely watched by businesses and financial-market participants.
Lower policy rates can potentially reduce the cost of borrowing, although the effect on the actual cost and availability of credit depends on how quickly monetary-policy changes are transmitted through the banking system.
For small and medium-sized businesses in particular, access to affordable credit remains a major concern.
Many smaller companies depend on bank loans and other forms of financing to purchase equipment, maintain inventories, pay workers and expand their operations.
When borrowing costs are high, businesses may postpone investments or reduce the scale of expansion plans.
The CBN has therefore faced pressure to ensure that monetary-policy reforms translate into more accessible financing for productive businesses.
The Abuja Chamber of Commerce and Industry also used the trade-fair engagement to highlight concerns about the operating environment facing businesses.
Its president, Emeka Obegolu, called for monetary and economic policies that reduce the financing and operating burden on companies, particularly small and medium-sized enterprises.
He identified access to affordable finance, infrastructure deficits, multiple taxation, high operating costs and cumbersome trade procedures as continuing constraints.
The concerns reflect a broader challenge facing Nigerian businesses.
Improving macroeconomic indicators can strengthen confidence, but businesses ultimately need improvements in their day-to-day operating environment.
A company may benefit from a more stable foreign-exchange market, for example, but still face difficulties if electricity costs are high, transportation is unreliable or multiple government charges increase operating expenses.
The CBN's latest assessment therefore needs to be viewed alongside other reforms affecting the private sector.
The increase in foreign reserves is nevertheless important because it provides a stronger external buffer for the economy.
Foreign reserves represent assets held by the central bank that can be used to support international payments and help manage external shocks.
They can also influence investor perceptions of a country's ability to meet foreign-currency obligations.
For international investors considering Nigeria, stronger reserves may be interpreted as evidence of improved external resilience.
For domestic companies, the benefits could emerge through greater stability in the foreign-exchange market.
Importers require foreign currency to pay overseas suppliers, while manufacturers may need dollars and other currencies to purchase machinery and production inputs.
Airlines, technology companies, pharmaceutical businesses and other sectors can also have substantial foreign-exchange requirements.
Improved foreign-exchange liquidity could therefore have broad effects across the economy.
Remittances have become another important component of Nigeria's external financial position.
Millions of Nigerians living and working abroad send money to relatives and households in the country.
These inflows support household consumption, education, healthcare, housing and other expenses.
They can also contribute to foreign-exchange liquidity when they enter through formal channels.
The CBN has therefore sought to encourage remittance flows through regulated financial institutions.
A greater proportion of remittances passing through formal channels can improve visibility over foreign-exchange flows and increase the amount of foreign currency entering the regulated financial system.
The same principle applies to investment inflows.
Foreign investors bring capital into Nigeria for businesses, infrastructure, financial assets and other opportunities.
When investor confidence improves, capital inflows can strengthen the country's external position.
The CBN's attribution of stronger reserves partly to investment inflows therefore reflects the importance of maintaining a policy environment capable of attracting and retaining capital.
For businesses, investor confidence can also have indirect benefits.
Companies operating in an environment where investors are willing to provide capital may find it easier to raise funds, expand production and undertake long-term projects.
However, investors typically consider multiple factors before committing capital.
These include exchange-rate stability, inflation, interest rates, taxation, regulation, infrastructure, security and the predictability of government policies.
The CBN's monetary reforms address only part of that broader investment environment.
The Abuja trade fair engagement provides a platform for businesses to communicate their concerns directly to policymakers.
Trade fairs bring together manufacturers, traders, investors, service providers and government institutions.
Such events can therefore provide policymakers with direct information about the challenges businesses face.
The CBN's participation also demonstrates the connection between monetary policy and the wider business environment.
While the central bank does not control issues such as infrastructure or multiple taxation, its policies influence borrowing costs, liquidity, exchange rates and financial-sector stability.
Businesses therefore closely monitor its decisions.
The recent reduction in the Monetary Policy Rate has already affected expectations in financial markets.
Treasury-bill yields have begun to adjust following the policy shift, while market participants are assessing how much liquidity could enter the financial system through maturing securities and other payments.
That liquidity could influence the cost of short-term government borrowing and the broader pricing of financial assets.
Banks will also be watching the policy environment as they determine how to price loans and deposits.
If lower monetary-policy rates eventually translate into lower lending costs, businesses could gain greater access to financing.
However, banks must also consider credit risks, operating costs and the quality of borrowers when determining lending rates.
For small businesses, the challenge is particularly significant because many lack substantial collateral or long credit histories.
Improving access to finance may therefore require more than lower interest rates.
Financial institutions may need to develop products designed specifically for small businesses and use alternative methods of assessing creditworthiness.
Digital financial services could also help expand access to credit and other financial products.
The CBN's emphasis on formal financial channels is relevant to this process.
When businesses and individuals conduct more transactions through regulated financial institutions, banks can develop better information about economic activity and potentially offer more appropriate financial products.
Formalisation can also strengthen transparency and reduce some of the risks associated with informal financial transactions.
The growth in reserves comes at an important period for Nigeria as the government continues to implement economic reforms.
The country has been attempting to strengthen its fiscal position, improve foreign-exchange market functioning and encourage private-sector investment.
These reforms have created both opportunities and challenges for businesses.
Companies have had to adjust to changes in exchange rates, taxation, interest rates and operating costs.
Some businesses have benefited from improved access to foreign currency, while others continue to face significant cost pressures.
The CBN's latest assessment suggests that the external position is becoming stronger even as the economy continues to adjust.
The central bank also reiterated its commitment to bringing inflation lower.
Inflation remains an important concern for businesses because rising prices increase the cost of raw materials, transportation, labour and other inputs.
When inflation is high, businesses may struggle to determine appropriate prices and investment levels.
Consumers may also reduce spending when household purchasing power falls.
Lower inflation would therefore benefit both businesses and consumers.
However, bringing inflation down while maintaining economic growth requires careful monetary-policy management.
If interest rates remain excessively high for too long, businesses may face difficulties obtaining credit.
If policy becomes too loose too quickly, inflationary pressures could return.
The CBN is therefore attempting to balance price stability with the need to support productive economic activity.
The recent rate cut indicates a greater willingness to support growth as inflation conditions improve.
For businesses, the effectiveness of the approach will ultimately depend on whether credit becomes more accessible and whether economic stability continues.
The CBN's stronger reserve position provides some additional protection against external shocks.
Nigeria remains exposed to changes in global commodity prices, international interest rates and other external developments.
A stronger reserve buffer can provide greater capacity to respond to these pressures.
For companies, greater external resilience can help reduce uncertainty when making long-term business decisions.
The latest reserve figure may also strengthen Nigeria's position when dealing with international investors and financial institutions.
However, reserves alone cannot solve all of the country's economic challenges.
Businesses still require reliable infrastructure, efficient ports and roads, predictable taxes, adequate electricity and a regulatory environment that encourages investment.
The call from the Abuja Chamber of Commerce for better coordination of taxes, rates, fees and levies reflects the private sector's desire for a more predictable operating environment.
Multiple charges can increase the cost of doing business and reduce the resources available for expansion.
For smaller companies, these costs can be especially difficult to absorb.
The government and financial authorities will therefore face continuing pressure to ensure that macroeconomic improvements are reflected in the real economy.
The increase in foreign reserves is an encouraging development, but businesses will ultimately judge economic reforms by their impact on production, investment, employment and profitability.
If improved reserves contribute to greater foreign-exchange stability, lower inflation and improved investor confidence, businesses could benefit significantly.
If those improvements fail to translate into easier access to credit and lower operating costs, many companies may continue to face pressure despite the stronger external position.
The coming months will therefore be important for determining whether the latest economic gains can be sustained.
The CBN will need to continue monitoring inflation, liquidity, exchange-rate conditions and banking-sector stability.
Businesses, meanwhile, will continue to assess whether the changing monetary environment provides opportunities to expand investment and production.
The $55.25 billion reserve level represents a significant milestone for Nigeria's external finances.
The central bank's explanation that remittances, investment inflows and increased participation in formal financial channels are contributing to the improvement provides an indication of the direction in which the country's external financial system is evolving.
For the business community, the hope is that stronger reserves will support greater foreign-exchange stability, improve investor confidence and eventually reduce some of the financial pressures that have constrained companies.
The broader objective will be to ensure that macroeconomic stability becomes more visible in the real economy.
That means businesses should be able to access finance at more sustainable rates, import essential inputs more predictably, plan investments with greater confidence and operate in an environment where policy changes are transparent and coordinated.
For now, the CBN's latest assessment provides a positive signal about Nigeria's external financial position while also highlighting the work still required to ensure that stronger reserves translate into stronger conditions for businesses across the country.