Nigeria’s economy is on the path to recovery. Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, recently stated this. He noted the country has entered a stable phase. This follows two years of significant monetary reforms.

Governor Cardoso spoke to bankers and financial leaders. This was at the 60th Annual Bankers Dinner in Lagos. He declared that Nigeria has “turned a decisive corner.” This marks a key point in its reform journey.

He highlighted positive indicators. These include easing inflation and a steadier foreign exchange market. Stronger investor confidence is also evident. These factors show Nigeria’s economy is regaining balance.

The CBN’s embrace of orthodox monetary policy is working. Firmer regulatory oversight is also key. These are correcting long-standing economic distortions.

Declining Inflation Rates

Inflation rates are declining significantly. It fell from 34.6% in November 2024 to 16.05% by October 2025. Food inflation also dropped to 13.12%. It had previously been near 22% earlier this year. The CBN aims to guide inflation towards single-digit levels. Policy instruments will continue to be adjusted.

Stabilizing the Foreign Exchange Market

Developments in the foreign exchange (FX) market were a key focus. Governor Cardoso confirmed the CBN has cleared the multi-billion-dollar FX backlog. This sum was over $7 billion. It was inherited by the current administration. Clearing these arrears has boosted confidence. Foreign airlines, manufacturers, and investors are now more confident.

This renewed stability stems from several reforms. These include exchange rate unification. The Electronic Foreign Exchange Management System was introduced. Also, the Nigerian FX Market Conduct Code was implemented.

These actions reduced opacity and deterred arbitrage. They allowed the Naira to trade within a tighter band. The gap between official and parallel market rates is now below 2%. This is a significant improvement. Previously, this gap was over 60%.

Boost in Investor Confidence and External Reserves

Increased stability also attracted more investor inflows. These reached $20.98 billion in the first ten months of 2025. This marks a 70% jump compared to all of 2024.

Nigeria’s external reserves have rebounded strongly. They now stand at $46.7 billion. This is the highest level in nearly seven years. It provides over ten months of import cover. Governor Cardoso emphasized that reserves are growing from strong FX liquidity, non-oil exports, and diaspora remittances. It is not due to new borrowing.

Strengthening the Financial System

Regarding the financial system, bank recapitalization is advancing well. Twenty-seven banks have already raised fresh capital. Sixteen institutions have met or exceeded new capital thresholds. This is ahead of the March 31, 2026 deadline.

This year’s stress tests 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 was completed.

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

The Governor also highlighted rapid growth in digital payments and fintech. Over 12 million contactless cards have been issued. The regulatory sandbox now supports more than 40 innovators. Interoperability among switching companies has also improved. The CBN will support innovation. This will happen within a framework protecting consumers and financial stability.

Global Recognition for Reforms

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

Key Priorities for 2026

For 2026, Governor Cardoso outlined key priorities. These include strengthening bank resilience. Improving price stability through an enhanced inflation-targeting framework is another. Expanding the digital payments network is crucial. Oversight of fintech operators will be enhanced. Modernizing internal CBN processes is also planned. Building stronger local and international partnerships remains vital.

Cardoso concluded with an optimistic outlook. Nigeria is now better equipped to withstand external shocks. This is supported by a flexible exchange-rate regime. Rising non-oil exports and a growing services sector contribute. Firmer reserves also play a role.