Nigeria’s economic climate shows clear signs of recovery. This is according to Central Bank of Nigeria (CBN) Governor Olayemi Cardoso. He stated the nation has entered a more stable phase. This follows two years of sweeping monetary reforms.

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

Inflation Decline and FX Market Stability

Cardoso noted several positive developments. Inflation is easing. The foreign exchange (FX) market is steadier. Investor confidence has grown stronger. These factors point to an economy regaining balance.

The CBN adopted orthodox monetary policy. It also implemented firmer regulatory oversight. These actions are gradually correcting economic distortions. Such distortions had long weighed on the economy.

Inflation decreased significantly. It fell from 34.6% in November 2024. By October 2025, it was 16.05%. Food inflation also reduced to 13.12%. Earlier, it was close to 22%. The CBN aims for single-digit inflation. Cardoso confirmed ongoing policy adjustments to achieve this.

The FX market was a key focus of his review. Governor Cardoso confirmed the CBN fully settled the FX backlog. This multi-billion-dollar debt was inherited by the present administration. It was previously estimated at over $7 billion. Clearing these arrears boosted confidence. Foreign airlines, manufacturers, and portfolio investors are now more assured.

Stability returned due to key reforms. These include the unification of exchange rates. The Electronic Foreign Exchange Management System was introduced. Also, the Nigerian FX Market Conduct Code helped. These measures reduced market opacity. They also discouraged arbitrage. The Naira now trades within a tighter band.

The difference between official and parallel FX rates narrowed. It is now below 2%. This is a striking improvement. Previously, the gap widened past 60%.

Investor Inflows and External Reserves Rebound

Improved stability attracted more investor inflows. These reached $20.98 billion in the first ten months of 2025. This marks a 70% increase. It surpasses inflows for all of 2024.

Nigeria’s external reserves have rebounded. They now total $46.7 billion. This is the highest level in almost seven years. It provides over ten months of import cover. Cardoso emphasized the source of this growth. Reserves are rising from stronger FX liquidity. Non-oil exports contribute significantly. Increased diaspora remittances also play a role. Crucially, this growth is not from fresh borrowing.

Financial System Health and Key Achievements

The financial system remains robust. Bank recapitalisation is progressing well. Twenty-seven banks have already secured new funds. Sixteen institutions met or exceeded new capital thresholds. This happened before the March 31, 2026, deadline.

Stress tests confirm the financial system’s broad health. The CBN enhanced oversight of ATMs. It also improved oversight of POS agents. Rules for branch closures were revised. A full review of the cash distribution network is complete.

Nigeria’s removal from the Financial Action Task Force (FATF) grey list is a key achievement. Countries on this list often see reduced capital inflows. This can be up to 7.6% in the first year. Nigeria’s exit eased compliance for correspondent banks. It also boosted global confidence in the nation’s financial conduct.

Digital Payments Growth and Future Priorities

Digital payments and the fintech sector are growing rapidly. Over 12 million contactless cards have been issued. The regulatory sandbox now supports more than 40 innovators. Interoperability among switching companies has deepened. The CBN will keep supporting innovation. This support will ensure consumer safety. It also guarantees financial stability.

Global rating agencies acknowledge Nigeria’s reform progress. Fitch recently upgraded Nigeria from B- to B. The outlook is now stable. Moody’s moved Nigeria from Caa1 to B3. S&P shifted its outlook from stable to positive.

Cardoso outlined key priorities for 2026. These include strengthening bank resilience. Price stability will improve. This is via a refined inflation-targeting framework. The digital payments network will expand. Oversight of fintech operators will enhance. Internal CBN processes will modernize. Stronger local and international partnerships are also planned.

He concluded his address with optimism. Nigeria is better prepared for external shocks. A flexible exchange-rate regime supports this. Rising non-oil exports also help. The services sector is growing. Reserves are firmer.