Nigeria’s Foreign Reserves Are Not Piggy Bank
• Why calls on Cardoso to spend the buffer miss the point Thompson Eme When Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso addressed the BusinessDay CEO Forum in Lagos, he
When Central Bank of Nigeria Governor Olayemi Cardoso declared a surge in foreign reserves from approximately US$3 billion to nearly US$40 billion over a two-year period, many Nigerians questioned why the nation still needed to borrow and why crucial development projects remained unfunded. Some media outlets interpreted this as evidence that authorities were hoarding cash while ordinary citizens faced hardships.
However, this perspective overlooks the strategic purpose of foreign reserves. They are not a fiscal buffer nor funds to be freely distributed, but a critical resource to stabilize the economy and manage foreign exchange needs. Understanding what reserves are and what they are not is essential to appreciate their role beyond mere cash reserves.
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