Market News

BY  Wasiu Alli 

The Nigerian economy is beginning to turn the corner with an increased investor confidence, growing reserves and macroeconomic stability, according to Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN).

According to excerpts released upon the closure of the 2025 IMF/World Bank Spring Meetings in Washington D.C., Cardoso emphasised the Bank’s commitment to reforms and ensuring stability and transparency in the FX market.

“Thanks to the steps taken over the past 18 months, we have strengthened our monetary buffers and positioned Nigeria to better withstand external shocks,” Cardoso said.

He noted that the country’s delegation to Washington used the meetings “as a platform to spotlight Nigeria’s bold economic reforms and explore further measures to enhance macroeconomic stability, strengthen our financial system, and drive inclusive growth for all Nigerians”.

The CBN governor admitted that though the reforms were painful, they have bolstered investor confidence, lured in inflows to a record and enhanced the net position of the country.

“To all Nigerians: these reforms are not easy, but they are delivering results. We have moved from a position of vulnerability toward one of growing strength, and our economic trajectory is beginning to turn positive”.

Nigeria embarked on some far-reaching reforms nearly two years ago to rescue the country from an imminent collapse. The policies which were shortfall of concrete social protections have plunged many into poverty and sparked a worst cost-of-living crisis in a generation.

These reforms, including scrapping costly petrol subsidies and liberalising the foreign exchange market, have seen Africa’s most populous nation won the applause of multilateral lenders and international investors.

Coupled with the radical reforms, the Cardoso-led CBN equally rolled out policies that have boosted confidence in the FX market, some of which include maintaining orthodox regime to anchor stubbornly high inflation and drawing in capital.

The Abuja-based lender also introduced the FX code and Electronic Foreign Exchange System (EFEMS) to maintain stability, efficiency and transparency in the country’s exchange rate system and shore up the value of the naira.

These efforts have seen gross reserves exceed $38 billion, providing nearly ten months of import cover. It also led to Nigeria recording balance of payments surplus of $6.83 billion, the strongest in many years, driven by rising exports and renewed capital inflows.

“This growing confidence is further reinforced by Fitch’s recent upgrade of Nigeria’s credit outlook – underscoring international recognition of our disciplined reforms and the bold steps we are taking to restore macroeconomic stability”.

Inflationary pressures persist

Though there were early disinflationary trends, signaling macroeconomic recovery and giving assurance that authorities may consider easing monetary tightening, the renewed pressure triggered by rising energy costs and food prices have brought renewed pressures.

“We recognise that inflation remains the most disruptive force to the economic welfare of Nigerians… our policy stance is firmly focused on bringing inflation down to single digits in a sustainable manner over the medium term,” Cardoso said.

“Our goal is to restore price stability, protect household purchasing power, and lay the foundation for long-term investment”.

The CBN boss assured that the planned banking recapitalisation exercise which is about a year away is poised to increase the buffers of the country’s econom.

“The banking sector recapitalisation is well underway, with strong momentum and stakeholder alignment, and will ensure that Nigerian banks are fully equipped to support the real economy with greater scale, stability, and capacity”.