Nigeria must reduce its dependence on oil revenues and attract more long-term investments to safeguard its growing external reserves, global brokerage firm EBC Financial Group has said.

The firm made the recommendation as Nigeria’s external reserves climbed to about $51 billion, attributing the increase to improved investor confidence following the Central Bank of Nigeria’s foreign exchange reforms.

According to EBC, the reserve growth has been driven largely by stronger oil earnings and short-term foreign portfolio investments, commonly known as “hot money.” While these inflows have strengthened the country’s reserve position, the firm warned that they can leave the economy quickly if global market conditions or investor sentiment change.

EBC noted that Nigeria’s external reserves have risen from about $32 billion in April 2024 to approximately $51 billion, bringing the Central Bank of Nigeria closer to its reserve target.

The brokerage firm cautioned that a decline in global oil prices, rising international interest rates, or weakening confidence in the naira could trigger capital outflows and put pressure on the reserves.

EBC stressed that sustaining the gains will require policies that encourage long-term foreign direct investment, diversify the economy beyond oil, maintain strong export earnings, and preserve confidence in Nigeria’s ongoing economic reforms. Visit www.jocomms.com for more news.