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This term paper goes into the analysis of the external reserves position in Nigeria it embodies the previous problems, current problems and future recommendation. It is of a great importance to the students of financial and business studies and those in economics. It is also a very important to business consultants and investors. To say the truth it is very important to Nigerian government and to the entire Nigerian cannot be over emphasized, as a result, the effective management of Nigeria external reserves stands the chance of ascertaining the Nigerian economy and compare into to that of other countries. In addition the management of Nigerian external reserve attracts a lot of public interests. This is so because unexpected cheques in the welfare of the common man. A good example was the oil exhortation and boom period, and as a result of this Nigeria not over herself in reckless flirtation with the new sources of easy money and the nation has all but was destroyed by arrogant and it is advice to the people that depend on oil further more the measure taken by the nation; there is concept evidence that the spending pattern of our people have rationalized to an extent and agriculture, cash crop production are once more assuming their abandoned roles. Nigerian are now motivated toward the goals of self-sufficiency, and the export incentive recently released by federal government of Nigerian will do doubt encourage manufacture’s to exploit foreign markets to the benefits of our external reserves.

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