EXPLAINER: Nigeria Has $53bn In External Reserves

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Nigeria’s external reserves have become a major talking point as it continues to rise under President Bola Tinubu’s administration, from about $33 billion in May 2023 to $53.31 billion as of August 25, 2026.

The increase has triggered a fresh debate over whether part of the reserves should be used to finance urgent national needs.

On August 28, the minority caucus of the house of representatives called on Tinubu to withdraw $5 billion from the country’s external reserves to tackle worsening insecurity in northern Nigeria.

The lawmakers said the scale and frequency of attacks across the region had become intolerable.

“If funding is an issue, the government should draw $5 billion from the nation’s external reserves for an extraordinary national security intervention,” the caucus said.

But what exactly are external reserves, who controls them, and what do they mean for Nigerians?

More importantly, if Nigeria has more than $53 billion in reserves, can the government simply take part of the money and spend it on security, infrastructure or other urgent needs?

WHAT ARE EXTERNAL RESERVES?

External reserves are foreign assets held and managed by a country’s central bank to meet international payment obligations and support the stability of its currency.

In Nigeria, the reserves are held mainly by the Central Bank of Nigeria (CBN) and are largely denominated in foreign currencies, particularly US dollars.

They can also include other foreign assets such as securities, gold and special drawing rights (SDRs).

In simple terms, external reserves are Nigeria’s foreign-currency financial buffer.

It is similar to having savings set aside for emergencies, except that a country’s reserves have specific monetary and external-sector purposes and are not ordinary government revenue.

Nigeria earns…