Nigeria experienced a significant surge in external investor confidence, with foreign capital inflows reaching $20.98 billion in the first ten months of 2025.
This figure, the highest in years, was disclosed by the Central Bank Governor, Mr. Olayemi Cardoso.
Speaking at the 2025 Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria in Lagos, Governor Cardoso stated that the inflows reflect renewed trust in Nigeria’s economic direction and the credibility of ongoing monetary reforms. The amount represents a 70 per cent rise over the total inflows for 2024 and a 428 per cent jump from the 2023 total.
Cardoso highlighted the “visible transformation” in the foreign exchange market. He noted that the CBN has sustained the unification of FX windows while fully clearing the multi-billion-dollar backlog that had previously undermined confidence.
He said that the Nigerian Foreign Exchange Code and the deployment of the Electronic Foreign Exchange Management System have introduced transparency, mandatory order submission, real-time surveillance, and enhanced price discovery.
According to Governor Cardoso, these reforms “have restored discipline to the market,” successfully reducing the premium between the official and parallel markets to under 2 per cent, a steep drop from over 60 per cent recorded a year ago.
The Governor added that the Bank will soon unveil a revised FX Manual aimed at widening market participation, tightening documentation standards, and entrenching regulatory consistency to sustain stability.
Cardoso reported a significant improvement in the country’s external buffers. Foreign reserves rose to $46.7 billion by mid-November, the highest in almost seven years, which provides “over 10 months of forward import cover.”
He noted that reserves are being rebuilt “organically—not through borrowing—but through improved market functioning, stronger non-oil exports and robust capital inflows.”
Nigeria’s current account balance also showed strength, increasing by 85 per cent to $5.28 billion in Q2 2025 from $2.85 billion in Q1. This improvement was buoyed by higher non-oil export earnings and improved remittance inflows, which grew by about 12 per cent following reforms to reporting and settlement systems.
In a clear departure from previous policy, Cardoso declared that the CBN would not resume the controversial practice of monetary financing of the Federal Government. He stressed, “This stance is unequivocal: there will be no return to the practice of financing fiscal deficits by the Central Bank.”
The Governor commended fiscal authorities for complementary reforms, including the rollout of the Revenue Optimisation framework, the establishment of the National Revenue Agency, and upgrades to the Treasury Single Account.
Outlining the CBN’s strategic agenda for 2026, the Governor listed eight priority areas: Strengthening the banking system through rigorous supervision and improved governance; Delivering durable price stability using an enhanced inflation-targeting framework; Modernising payments and deepening financial inclusion, with emphasis on contactless payments; Fostering responsible fintech innovation, with stricter licensing and clearer guardrails for digital-asset experimentation; Strengthening institutional capacity, reducing bottlenecks and enhancing staff skills; and deepening collaboration with regulators and global partners to reinforce Nigeria’s role as a trusted central bank.
Cardoso explained that Nigeria’s flexible FX regime, rising non-oil exports, and expanding services trade now offer stronger protection against external shocks, such as volatility in oil prices and movement in global credit sentiment. He said, “With oil now a smaller share of GDP and fiscal revenue, a sharp oil-price decline would be cushioned by the new FX framework.”
Cardoso reiterated that price stability remains the CBN’s “bedrock priority.” He added that the Bank will continue to provide forward guidance, safeguard market integrity, and leverage technology—including AI—to strengthen decision-making. He concluded, “By remaining disciplined, forward-looking and true to our mandate, we will ensure that Nigeria’s economy remains stable, inclusive and primed for sustainable growth.”
