CBN warns oil prices, pre-election spending could threaten stability

The Central Bank of Nigeria (CBN) has stated that the recent surge in the country’s gross external reserves may be at risk from oil price shocks and increased pre-election spending.

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The CBN governor, Olayemi Cardoso, issued the warning while addressing the media on the outcome of the Monetary Policy Committee (MPC) 304th meeting held on Tuesday in Abuja.

He stated that Nigeria’s gross external reserves rose to a 13-year high of $50.45 billion in February, strengthening confidence in the country’s foreign exchange position.

According to him, the current reserve level is sufficient to cover approximately 9.68 months of imports, highlighting the improvement in the nation’s external buffers.

He expressed optimism that if the trend is sustained, the reserves could reach their highest level in 15 years in the near future.

“Gross external reserves rose significantly to $50.45 billion as of February 16, 2026, the highest in 13 years. This provides an import cover of 9.68 months for goods and services,” Mr Cardoso said.

While addressing questions on the sustainability of the gross external reserves increase, the CBN boss raised concerns that oil prices, the fiscal deficit, and the 2027 pre-election spending are liable to threaten the country’s rising external reserves.

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He added that the committee will continue in its policy formation and avoid policy somersault to maintain the rise in the country’s gross external reserves.

“We cannot underestimate the global shocks that could come our way. Nobody has a crystal ball; we can only project into the future. But who knows what tensions could arise globally that might affect us in ways we never anticipated.

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“Oil prices, how they play out, we can only project. Importantly, of course, there is pre-election spending, and that also, if not properly contained, can destabilise the stability we’ve accomplished. And, of course, fiscal deficits as we enter a new year, I know that is something being looked at very, very carefully.

“And from our side, of course, we’ve got to make sure that we are consistent with our policy formulation and that there are no policy somersaults. The trajectory we are on is one where every effort is being made to diversify our base,” he said.

Mr Cardoso further explained that the CBN will provide a breakdown of the country’s net external reserves in the coming days.