MARKET NEWS

BY Hope Moses-Ashike 

When Olayemi Cardoso delivered his first major address as Governor of the Central Bank of Nigeria (CBN) on November 25, 2023, he struck a determined tone, assuring investors and the business community that the country’s economy would soon witness significant stability in the short to medium term.

“We will tackle institutional deficiencies, restore corporate governance, strengthen regulations, and implement prudent policies. We assure investors and the business community that the economy will experience significant stability in the short-to-medium term as we recalibrate our policy toolkits and implement far-reaching measures,” Cardoso declared during his keynote speech at the Chartered Institute of Bankers of Nigeria (CIBN) 58th annual Bankers’ Dinner in 2023.

A key pillar of that vision, he stressed, was stabilising the exchange rate, a critical foundation for broader economic health. Cardoso emphasised the imperative of transparency, pledging to create a market-driven environment where exchange rates are fairly determined, ensuring predictability for businesses and households alike.

Through targeted policies, transparent market operations, and stronger coordination between monetary and fiscal authorities, Cardoso outlined a pathway to a more stable exchange rate regime, lower inflation, and an overall more enabling environment for economic growth.

Fifteen months into his tenure, Cardoso’s reform strategy, anchored on monetary tightening, foreign exchange market transparency, and improved financial governance, is taking shape. These efforts, he maintains, are laying the groundwork for lasting macroeconomic stability and ushering in a new era of transparency and investor confidence.

In a major show of that new direction, the CBN recently collaborated with J.P. Morgan, the Nigerian Exchange Group (NGX), and the Africa Private Capital Association (AVCA) to host a global investment forum at Nasdaq’s MarketSite in New York on Thursday, April 17, 2025.

Titled “The Nigeria Investment Agenda: Pathways for Growth & Global Partnerships,” the forum brought together global investors, diaspora leaders, and senior financial stakeholders to assess Nigeria’s economic prospects and the trajectory of ongoing reforms.

Addressing the high-profile audience, Cardoso reaffirmed the CBN’s unwavering commitment to rebuilding its credibility through orthodox monetary policy, transparency, and policy consistency. “We inherited a crisis of confidence but chose a different path. We’re not turning back,” he said, striking a defiant note.

In a compelling fireside chat with Nobel Prize-winning economist James Robinson, the Reverend Richard L. Pearson Professor at the University of Chicago, Cardoso expanded on his vision to reposition the CBN as a credible, trusted institution, one rooted in domestic excellence yet respected globally.

Muhammad Sani Abdullahi, deputy governor for Economic Policy, delivered a macroeconomic update, highlighting sharp increases in foreign exchange turnover, emerging signs of disinflation, and strengthening external reserves. “With a market-determined exchange rate and a transparent, rules-based policy framework, confidence is gradually being restored in Nigeria’s economy,” Abdullahi observed.

Opening the forum, Nkiru Balonwu, adviser to the CBN Governor on Stakeholder Engagement and Strategic Communication, framed the event as a milestone in the Bank’s broader public engagement efforts. “Today is more than a conversation,” she noted. “It’s about opening the books on the CBN’s transformation story under Cardoso, sharing the facts, interrogating the progress, and looking ahead together at what more can be done to build sustainable partnerships and unlock long-term capital.”

Another major highlight was the panel discussion titled “Repricing Nigeria: Assessing the Scope for Sustained Change.” Moderated by Gavin Serkin, founder of New Markets Media & Intelligence, the panel featured some of the financial world’s heavyweights: Joyce Chang, Chair of Global Research at JPMorgan Chase; Jason Rekate, Global co-head of Corporate Banking at Citi; Razia Khan, Chief Economist for Africa & Middle East at Standard Chartered; and Ahmad Zuaiter, Co-Founder and CIO of Jadara Capital Partners.

Panelists offered optimistic yet cautious perspectives on Nigeria’s investment landscape, pointing to renewed international interest fueled by stronger economic fundamentals, better governance, and a clearer policy direction.

Representing the CBN Board and the Monetary Policy Committee were US-based diaspora members Robert Agbede, Melvin Ayogu, and Aloysius Ordu, an indication of the apex bank’s growing global outlook and commitment to leveraging Nigerian talent abroad. Temi Popoola, Group CEO of NGX, moderated the question and answer session, while Olubukola Akinniyi Akinwunmi, director of Banking Supervision at CBN, delivered the closing remarks.

Throughout the forum, discussions remained substantive, focused not just on progress but also on the steps needed to forge lasting partnerships and attract long-term capital. At the heart of it all: a renewed determination to re-establish the CBN as a credible, world-class institution, rooted in excellence at home and respected internationally.

Reflecting on the economic progress made so far, Cardoso pointed to tangible signs of success. The naira, he said, has stabilised at a more sustainable level, and the once-wide gap between the official and parallel market exchange rates has largely disappeared, the result of disciplined reforms led by the apex bank.

Speaking at the conclusion of the 2025 Spring Meetings of the IMF and the World Bank Group in Washington D.C., Cardoso attributed the positive outcomes to the government’s unwavering commitment to reform and greater policy clarity.

He explained that the renewed stability of the naira has been pivotal in restoring investor confidence and encouraging autonomous foreign currency inflows through formal financial channels. These inflows, Cardoso noted, are helping to diversify Nigeria’s foreign exchange sources beyond the traditional heavy reliance on oil revenues.

“Nigeria’s external buffers have also strengthened considerably,” he added. “Our foreign reserves now exceed $38 billion, providing nearly 10 months of import cover. This robust buffer enables us to better withstand external shocks whether from declining oil prices or global financial turbulence, thereby safeguarding our economy.”

Again, Cardoso emphasised, it was thanks to disciplined reforms and consistent policies that the naira has found a more sustainable footing against the U.S. dollar. “The once-wide gap between the official and parallel market rates has all but disappeared, a first in Nigeria’s recent history, and speculative arbitrage has all but vanished,” he remarked, underscoring how the CBN’s interventions have successfully reduced market distortions.

Read also: CBN’s reforms restoring macroeconomic stability, confidence — Cardoso to investors

At the just-concluded IMF/World Bank Spring Meetings, current and former governors of central banks from emerging markets convened for an illuminating discussion on why central bank independence is vital to achieving economic and financial stability. They explored how clear communication strategies enhance policy credibility and why foreign exchange interventions should be strategic and purposeful.

Among the distinguished speakers were Governors Lesetja Kganyago of South Africa and Eli Remolona of the Philippines; Raghuram Rajan, University of Chicago professor and former head of the Reserve Bank of India; and IMF First Deputy Managing Director Gita Gopinath.

“It absolutely helps if you have a very clear monetary policy framework,” Gopinath said during the session moderated by Lisa Abramowicz of Bloomberg News. She cautioned, however, that relying too often on multiple monetary policy tools can be confusing. “If you rely on your policy rate as the main tool for doing monetary policy, that remains best practice,” she said, warning that using several tools simultaneously “can be terribly confusing.”

As Nigeria’s Central Bank continues its push for reform under Cardoso’s stewardship, one thing appears increasingly clear: transparency, credibility, and policy discipline are setting the stage for a more stable, prosperous economic future.