Sweeping policy adjustments spearheaded by Central Bank of Nigeria (CBN) Governor Olayemi Cardoso have revitalized the nation’s currency market, significantly expanded foreign exchange buffers, and enhanced the stability of financial institutions, according to Ayobami Oyalowo, Executive Director of Finance and Administration at the Ogun-Oshun River Basin Authority.
Reviewing Cardoso’s initial three years at the helm, Oyalowo observed that the central bank successfully transitioned back to conventional monetary fundamentals, anchoring its strategy on price stability, regulatory rigor, and stricter oversight of the banking industry.
Cardoso took the reins in September 2023 during a period of acute economic headwinds marked by depleted external buffers, fragmented foreign exchange windows, currency deficits, and an inflation rate that hit 25.80 percent in August 2023. These distortions, compounded by substantial unsettled currency claims, had severely dampened investor sentiment.
A core element of the turnaround involved stepping back from widespread developmental interventions. Oyalowo recalled Cardoso’s disclosure at the November 2023 Annual Bankers’ Dinner that past schemes had funneled over ₦10 trillion into segments such as aviation, power, and farming. Such broad disbursements had triggered worries about excessive market liquidity and distracted the apex bank from its primary statutory duties, which are more suitably managed by dedicated development finance bodies and fiscal ministries.
Addressing chronic currency bottlenecks, the CBN introduced structural mechanisms to enhance transparency and liquidity. Notable actions included launching the Electronic Foreign Exchange Matching System in December 2024 and establishing the Nigerian Foreign Exchange Code in January 2025. The apex bank also resolved an inherited backlog of legitimate foreign exchange obligations totaling roughly $7 billion, restoring credibility among multinational corporations, international carriers, and global investors.
Nonetheless, Oyalowo recognized that transitioning to unified market pricing came with noticeable short-term strain, including steep domestic currency depreciation, elevated import bills, higher operating costs for domestic producers, and squeezed consumer budgets.
Despite these frictions, the nation’s external balances expanded considerably. Headline gross reserves climbed from around $33 billion at the start of Cardoso’s administration to roughly $55 billion by October 2026. More remarkably, net foreign reserves recovered to approximately $46 billion, up sharply from $34.80 billion at year-end 2025 and an anemic $3.99 billion recorded at the close of 2023.
Data from the apex bank’s 2025 Annual Report showed that aggregate foreign currency receipts expanded by 13.81 percent to hit $109.86 billion, compared with $96.53 billion in 2024. Autonomous inflows—comprising private capital, remittances, and commercial exports—generated nearly 64 percent of the total, establishing a more organic and durable foreign exchange supply framework.
This renewed macroeconomic posture positively influenced sovereign assessments. S&P Global elevated Nigeria’s long-term rating from ‘B−’ to ‘B’ with a Stable Outlook in May 2026, while Fitch Ratings maintained its ‘B’ evaluation in October 2026 while revising the country’s trajectory to Positive. Furthermore, the market regained its standing on the FTSE Russell Frontier Market index in September 2026. Total imported capital also rebounded to $23.22 billion in 2025 from $12.32 billion the previous year, although portfolio funds made up $19.74 billion (85 percent) and foreign direct investment accounted for $923 million, pointing to the ongoing need for longer-term commitments in heavy industry, technology, and energy.
On price pressures, Cardoso’s hawkish monetary stance guided headline inflation down to 15.39 percent by August 2026, down from 15.43 percent in July and the 25.80 percent recorded three years prior. Oyalowo highlighted that while the 2025 reweighting of the Consumer Price Index requires nuanced historical comparison, everyday consumers still navigate the compounded burden of earlier price shocks, while high borrowing rates continue to challenge business expansion.
The financial system was further insulated through the recapitalisation directive initiated in March 2024, which mandated minimum capital thresholds of ₦500 billion for international commercial lenders, ₦200 billion for national banks, and ₦50 billion for regional institutions. By March 2026, 33 lenders had successfully met the benchmarks, pooling ₦4.65 trillion in fresh capital—72.55 percent sourced locally and 27.45 percent from foreign investors.
Oyalowo added that institutional alignment reached an important milestone on September 18, 2026, when the central bank and the Federal Ministry of Finance executed a formal Memorandum of Understanding. This pact harmonizes liquidity projections, cash administration, macroeconomic modeling, and public debt issuance, minimizing policy friction between monetary strategies and state spending.
