Central Bank Governor Olayemi Cardoso says Nigeria is witnessing a marked recovery in investor sentiment thanks to stronger foreign exchange (FX) stability, sustained disinflation, and consistent buildup of foreign reserves. According to him, these factors are working together to restore confidence in the economy.
Cardoso highlighted that Nigeria’s gross external reserves have now climbed to US$46.7 billion, a level not seen in years. He argues this build-up is not accidental but the result of deliberate policy actions that encourage inward capital flows. The increase in reserves, he said, reflects “investor confidence in our policies leading to improved oil receipts, stronger balance-of-payments inflows, and renewed foreign portfolio inflows.”
He also pointed to recent progress in taming inflation. Inflation has been easing steadily, an outcome of coordinated monetary and fiscal measures. For Cardoso, this disinflation is central to making Nigeria more attractive to international investors, particularly in fixed income and money markets.
On the FX front, he said that stabilizing the naira has helped narrow the gap between the official exchange rate and the Bureau de Change (parallel) rate to under 2%. This convergence, in his view, signals a healthier and more transparent currency market.
Cardoso credited a series of bold reforms for these gains. Among various reforms, the CBN has ended a backlog of FX commitments, improved the operations of International Money Transfer Operators (IMTOs), and strengthened the banking sector by raising minimum capital requirements. He insisted that such reforms are not only about short-term stability, but are aimed at establishing a “market-driven foreign exchange system” grounded in long-term credibility.
He also noted that Nigeria’s macroeconomic improvements are gaining global recognition. He pointed to upgrades by major international ratings agencies and the country’s removal from the FATF Grey List as important validations of the reforms.
However, Cardoso emphasized that sustaining these gains will require discipline. He reiterated the need for continued coordination between fiscal and monetary authorities, saying, “managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence.”
The surge in foreign reserves to US$46.7 billion strengthens Nigeria’s external buffer, cutting reliance on debt and reducing vulnerability to external shocks. Coupled with falling inflation, this stability could lower borrowing costs and spur private investment, laying the groundwork for more sustainable economic growth.
