Nigeria’s Reserves Hit $52.5bn Driven By Oil Tax Windfall, FX Inflows -CBN

…MPC Bets on Executive Order 9 to Anchor Economy Nigeria’s economic buffers have received a significant boost as gross external reserves climbed to $52.52 billion as of July 17, 2026, a substantial increase from the $50.47 billion recorded at the end of May. This surge, primarily driven by receipts from…...

…MPC Bets on Executive Order 9 to Anchor Economy

Nigeria’s economic buffers have received a significant boost as gross external reserves climbed to $52.52 billion as of July 17, 2026, a substantial increase from the $50.47 billion recorded at the end of May. This surge, primarily driven by receipts from crude oil-related taxes and third-party inflows, has pushed the nation’s import cover to approximately 11 months.

This achievement far surpasses the international benchmark of three months of import cover, providing the Central Bank of Nigeria (CBN) with a formidable shield against external shocks and exchange rate volatility.

The development comes as the Monetary Policy Committee (MPC) concluded its 306th meeting on Tuesday, opting to hold the Monetary Policy Rate (MPR) steady at 26.5 per cent to maintain a cautious stance amidst global uncertainties.

Speaking after the meeting, the CBN Governor, Olayemi Cardoso, said, “Gross external reserves rose to US$52.52 billion as of July 17, 2026, from US$50.47 billion as at end-May 2026, mainly as a result of receipts from crude oil-related taxes and third-party inflows. This is sufficient to finance approximately 11 months of imports of goods and services, surpassing the international benchmark of three months cover.

Beyond the rising reserves, the MPC highlighted Executive Order 9 as a pivotal new tool for strengthening Nigeria’s macroeconomic fundamentals. The Committee underscored the potential benefits of this executive action in fostering greater alignment between fiscal and monetary authorities.

“To further strengthen macroeconomic fundamentals, the Committee underscored the potential benefits of Executive Order 9. Members further commended Government’s renewed efforts in improving crude oil production and encouraged relevant agencies to strengthen the implementation of reforms to maximise the potential in other sectors, such as solid minerals, to complement Government earnings,” he said.

TVC News Online reports that President Bola Tinubu signed Executive Order 9 in February to restructure the petroleum industry by mandating that all oil and gas revenues be paid directly into the Federation Account. It also stopped NNPC Limited from collecting the 30% management fee and the 30% frontier exploration fund deductions from profit oil and profit gas under Production Sharing Contracts (PSCs). Additionally, all remittances of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund (MDGIF) were suspended with immediate effect, in line with the Executive Order.

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In its official communiqué, the MPC emphasised the importance of this synergy, saying, “The MPC acknowledged the Federal Government’s renewed commitment to strengthening policy coordination, with particular emphasis on the ongoing collaboration with the monetary authority which has helped to moderate the impact of the Middle East crisis on the domestic economy. Members thus noted that greater alignment between fiscal and monetary policies would enhance policy effectiveness and support the achievement of overall macroeconomic objectives.”

The meeting also addressed the complex inflation landscape. While headline inflation eased marginally to 15.91 per cent in June 2026, ending a three-month uptick, the Committee expressed concern over food inflation, which climbed to 17.52 per cent due to supply constraints. Conversely, core inflation moderated to 15.92 per cent, a victory credited largely to the relative stability of the exchange rate.

On the growth front, the Nigerian economy remains resilient, expanding by 3.89 per cent in the first quarter of 2026. This growth was spearheaded by a robust non-oil sector, growing at 3.94 per cent, with telecommunications, financial services, and trade acting as the primary engines. However, the oil sector saw a decline in growth to 2.57 per cent, down from 6.79 per cent in the previous quarter, a dip attributed to essential maintenance of oil facilities and installations.

The MPC’s decision to retain the current policy stance was heavily influenced by a darkening global outlook as renewed hostilities in the Middle East have triggered concerns over volatile energy prices and supply chain disruptions, which could spill over into domestic inflation. Global growth is now anticipated to slow to 3.0 per cent in 2026, down from 3.5 per cent in 2025.

Explaining the rationale for the “hold” decision, Cardoso stated, “The Committee’s decision to maintain the current policy stance followed a thorough assessment of the balance of risks. Although headline inflation moderated marginally in June 2026, global uncertainties have heightened due mainly to the renewed hostilities in the Middle East. In view of the evolving developments, maintaining a cautious monetary policy stance remains appropriate.”

The Committee also welcomed the positive results of the banking sector recapitalisation exercise, noting that the system has shown improved resilience through key financial soundness indicators. To complement these gains, the MPC encouraged the government to maximise potential in the solid minerals sector to further diversify earnings.

Looking ahead, the CBN remains optimistic that inflation will continue to moderate as the harvest season approaches and foreign exchange stability persists. The Committee reaffirmed its commitment to taking “appropriate policy measures” as macroeconomic conditions evolve, with the next meeting scheduled for September 2026.