How CBN pulled Nigeria back from brink – Cardoso

By Uche Usim

Nigeria’s remarkable escape from a deep macroeconomic crisis took center stage at the 60th Annual Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos yesterday, where Central Bank Governor, Olayemi Cardoso, delivered an account of how the nation reclaimed stability.

What unfolded was not a routine policy speech but a gripping narrative of near-collapse, urgent reforms and an economic turnaround many had doubted was still possible.

Addressing top industry leaders, Cardoso recalled an economy in freefall when he assumed office. Nigeria, he said, had not only been “on the edge of a cliff” but had “already gone over it.” Inflation had climbed to a suffocating 34.6% in November 2024, sealing three decades of double-digit price instability. Investor trust, badly shaken, evaporated under a backlog of more than US$7 billion in unmet foreign-exchange obligations that paralyzed trade and stifled business operations across sectors.

The Governor traced Nigeria’s recovery to a suite of urgent and far-reaching reforms that restored credibility to the foreign exchange market. Chief among them was the full unification of the exchange-rate channels, a move he credited with eliminating arbitrage and allowing the naira to trade within a narrow, predictable band. He confirmed that the entire FX backlog had been cleared, an action that he said “restored confidence instantly and proved the CBN’s resolve.”

Cardoso highlighted the deployment of the Electronic Foreign Exchange Management System (EFEMS), integrated with Bloomberg’s BMatch technology, as a structural breakthrough. The system enforces mandatory order submission and provides real-time regulatory oversight, shutting the door on rate manipulation. The notorious gap between the official and parallel exchange markets has narrowed to under 2%, a dramatic reversal from the more than 60% spread that once incentivised rent-seeking.

These reforms triggered a powerful wave of capital inflows. Nigeria recorded about $21 billion in foreign investments in the first ten months of 2025, a 70% jump compared to the whole of 2024. External reserves climbed to a seven-year high of $46.7 billion by mid-November, achieved organically and not through borrowing. This strengthened buffer now provides more than ten months of import cover.

The domestic economic rebound, he noted, has been equally striking. GDP growth accelerated to 4.23% in the second quarter of 2025, while inflation has fallen steadily for seven consecutive months, reaching 16.05% in October 2025, less than half of its peak a year earlier.

Global rating agencies have taken notice. Fitch upgraded Nigeria to B with a stable outlook, Moody’s raised its rating to B3, and S&P revised its outlook from stable to positive. Nigeria’s $2.35 billion Eurobond issuance drew $13 billion in subscriptions, the largest in the nation’s history, underscoring renewed global confidence.

Cardoso also celebrated Nigeria’s exit from the Financial Action Task Force (FATF) grey list, a milestone that safeguarded more than $30 billion in potential capital inflows. He confirmed that Nigeria’s banking system remains robust, with 27 banks currently racing toward the March 31, 2026 recapitalisation deadline.

Closing on a forward-looking note, the Governor said Nigeria has “moved from crisis to recovery,” anchored by stronger institutions, expanding digital payments, now exceeding 12 million contactless cards, and a reinforced monetary framework. The nation, he concluded, is more prepared than ever to withstand global shocks and sustain long-term growth.