By Grace Alegba
Mr Olayemi Cardoso, Governor, Central Bank of Nigeria (CBN), says reforms in
Nigeria’s foreign exchange (FX) market have significantly improved liquidity,
restored investor confidence and stabilised the Naira.
Cardoso said this on Thursday in Lagos while delivering a distinguished Alumni
Lecture at St. Gregory’s College as part of its Founder’s Day celebration.
Speaking on the theme “Strong Foundations: From the Classroom to the Capital
Base,” the CBN governor said the reforms had eliminated distortions in the FX
market and improved transparency.
According to him, the Apex Bank dismantled the multiple exchange rate system
that previously created arbitrage opportunities and benefited only a few privileged
participants.
“Through deliberate policy actions, we eliminated the system of multiple exchange
rates and significantly reduced the parallel market premium from around 50 per
cent in 2022 to less than two per cent on average in 2025,” he said.
Cardoso said the FX market now operated with greater liquidity and efficiency,
enabling market participants to transact without extraordinary interventions from
the CBN.
He added that the Apex Bank had also cleared the backlog of unmet foreign
exchange demand, which previously constrained businesses and investors.
The governor said the reforms had contributed to a surge in capital inflows, noting
that investment flows into Nigeria increased by nearly 200 per cent between 2023
and 2025.
He also said the country’s external reserves had recently exceeded 50 billion
dollars, reflecting improved balance-of-payments conditions and growing investor
confidence in the economy.
According to him, the stability currently being witnessed in the Naira is the result
of deliberate efforts to rebuild trust in Nigeria’s financial markets.
Cardoso said the reforms were part of broader macroeconomic measures aimed at
restoring stability and strengthening the country’s financial system noting that the
CBN had also returned to orthodox monetary policy and tightened policy measures
to tackle inflation, which had declined from a peak of 34 per cent to about 15 per
cent.
The CBN Governor emphasised that strong financial institutions and transparent
markets are essential foundations for sustainable economic growth.
He said the reforms had positioned Nigeria’s economy to better withstand global
shocks, including geopolitical tensions that could affect energy prices and
international capital flows.
Panelists at the event agreed that while recent monetary reforms had helped
stabilise Nigeria’s economy, long-term growth would depend on coordinated fiscal
reforms, stronger institutions and lower inflation.
They added that policies that encouraged productive investment and lending would
also facilitate long-term growth.
The panelists, who are all financial experts, called for stronger coordination
between fiscal and monetary policies to drive sustainable growth in Nigeria.
The experts included Bismarck Rewane, Managing Director/CEO of Financial
Derivatives Company Ltd; Olufemi Awoyemi, Chairman of Proshare and Tilewa
Adebajo, Strategic CEO, Investment Banker and Economist.
Rewane said monetary policy alone could not drive growth, stressing the need for
alignment with fiscal, trade and industrial policies.
Awoyemi noted that high inflation and interest rates had constrained bank lending
to businesses, urging efforts to reduce inflation to encourage investment.
On his part, Adebajo emphasised the need to strengthen institutions and improve
government revenue to support economic reforms.
The panelists all agreed that stronger fiscal capacity and institutional credibility
were key to sustaining economic stability and growth.
