Nigeria’s economy is showing clear signs of recovery. Central Bank of Nigeria (CBN) Governor Olayemi Cardoso confirmed this. He stated the country has entered a more stable phase. This follows two years of extensive monetary reforms.

Governor Cardoso spoke to bankers and financial leaders in Lagos. This was at the 60th Annual Bankers Dinner. The event was organized by the Chartered Institute of Bankers of Nigeria. He declared that Nigeria has “turned a decisive corner” in its reform journey.

He highlighted key indicators of this recovery. Inflation is easing. The foreign exchange market is steadier. Investor confidence is also stronger. These factors suggest the economy is regaining balance.

The CBN’s approach uses orthodox monetary policy. It also includes firmer regulatory oversight. These measures are gradually correcting economic distortions. Such distortions have long impacted the nation.

Inflation Declines, FX Market Stabilizes

Inflation figures show significant improvement. It was 34.6 percent in November 2024. By October 2025, it had fallen to 16.05 percent. Food inflation also decreased to 13.12 percent. Earlier this year, it was nearly 22 percent. Governor Cardoso affirmed the CBN will continue adjusting policy instruments. The goal is to guide inflation towards single-digit levels.

The Governor also detailed progress in the foreign exchange (FX) market. The CBN has fully settled the multi-billion-dollar FX backlog. This backlog was inherited by the current administration. It was previously estimated at over seven billion dollars. Clearing these arrears has restored confidence. Foreign airlines, manufacturers, and portfolio investors now trust the market more.

Cardoso linked this stability to crucial reforms. These include the unification of exchange rates. The Electronic Foreign Exchange Management System was also introduced. Furthermore, the Nigerian FX Market Conduct Code contributed significantly.

These measures have reduced market opacity. They have also discouraged arbitrage. The naira now trades within a tighter band. The gap between official and parallel market rates is below 2 percent. This is a remarkable improvement. Previously, this difference widened past 60 percent.

This improved stability has boosted investor inflows. In the first ten months of 2025, inflows reached $20.98 billion. This marks a 70 percent increase. It significantly surpasses the total inflows for 2024.

Nigeria’s external reserves have also rebounded. They now stand at $46.7 billion. This is the highest level in almost seven years. It provides more than ten months of import cover. Governor Cardoso emphasized that this rise is not from fresh borrowing. Instead, it comes from stronger FX liquidity, non-oil exports, and increased diaspora remittances.

Strengthening Nigeria’s Financial System

The financial system’s health was also addressed. Bank recapitalization is progressing effectively. Twenty-seven banks have already secured new funds. Sixteen institutions have met or exceeded new capital thresholds. This achievement comes ahead of the March 31, 2026 deadline.

Stress tests conducted this year confirm a healthy financial system. The CBN has also enhanced oversight of ATMs and POS agents. Rules for branch closures were revised. A full review of the cash distribution network has been completed.

Nigeria’s removal from the Financial Action Task Force (FATF) grey list is a significant achievement. Countries on this list often see capital inflows drop by up to 7.6 percent in the first year. Nigeria’s exit eases compliance pressure on correspondent banks. It also boosts global confidence in the nation’s financial conduct.

Digital payments and the fintech sector are experiencing rapid growth. Over 12 million contactless cards have been issued. The regulatory sandbox now supports more than 40 innovators. Interoperability across switching companies has also deepened. Governor Cardoso affirmed the CBN’s commitment to supporting innovation. This support will always safeguard consumers and financial stability.

Global rating agencies are recognizing Nigeria’s reform progress. Fitch recently upgraded Nigeria from B- to B with a stable outlook. Moody’s moved the country from Caa1 to B3. S&P also shifted the outlook from stable to positive.

2026 Outlook and Future Priorities

Looking ahead to 2026, Cardoso outlined key priorities. These include strengthening banks’ resilience. Improving price stability through a refined inflation-targeting framework is another goal. The CBN aims to expand the digital payments network. Enhancing oversight of fintech operators is crucial. Modernizing internal CBN processes is also a focus. Finally, building stronger partnerships at home and abroad remains vital.

He concluded his address with an optimistic outlook. Nigeria is now better positioned to handle external shocks. This is supported by a flexible exchange-rate regime. Rising non-oil exports and a growing services sector contribute. Firmer reserves further strengthen this position.