Nigeria’s external reserves have surged to $42.35 billion, marking a significant turnaround in the country’s foreign exchange position — a development credited to the Central Bank of Nigeria’s (CBN) aggressive reforms and transparent handling of the FX backlog clearance.
Governor Olayemi Cardoso, speaking during the inaugural CBN Governor Annual Lecture Series at the Lagos Business School, explained that the decision to settle outstanding verified forex obligations, alongside a renewed emphasis on transparency in monetary policy, was pivotal in restoring investor confidence and boosting the nation’s reserves.
FX Backlog Clearance Strengthens Investor Confidence
The FX backlog clearance—a critical step in addressing Nigeria’s longstanding foreign exchange challenges—was completed after a comprehensive forensic audit by Deloitte.
The audit uncovered multiple irregularities in previous forward contracts, prompting the CBN to clean up the system before repayment.
Cardoso said that while he did not inherit the backlog, he viewed its settlement as a moral and strategic imperative.
“When I took office, I made a promise. We would clear the verifiable backlog of monies owed by Nigeria to third parties. To be honest, I had no idea how we were going to do it, but it was not negotiable,” he said.
The CBN boss emphasized that paying verified debts was a matter of credibility, not convenience.
“We needed to protect and maintain our integrity. If we are a going concern and expect investors to trust and invest in our economy, we must keep our promises,” he noted.
According to Cardoso, that decisive move contributed “in no small way” to the recent rise in reserves, explaining that foreign investors return when they see credibility, consistency, and transparency in policy direction.
Transparency and Market Reforms Bolster FX Stability
Cardoso highlighted that the CBN’s renewed transparency measures have played a vital role in stabilizing the foreign exchange market.
The introduction of open, televised Q&A sessions after every Monetary Policy Committee (MPC) meeting, the regular publication of audited financial statements, and the public disclosure of Nigeria’s net reserves position have all helped rebuild trust.
“Many doubted we would publish the net reserves figure,” Cardoso recalled. “But we gave a date, we delivered, and that gave investors confidence in the CBN.”
He also revealed the adoption of a B-Matching electronic trading system in the FX market to ensure openness and visibility in transactions.
The system, he said, has eliminated the era when certain individuals or companies had privileged access to foreign exchange at the expense of others.
“The market has become more transparent, and Nigerians can now do business without undue influence or political connections,” he added.
Reforms Drive Renewed Global Interest
Cardoso observed that the positive impact of the FX backlog clearance and transparency drive is already visible in renewed global investor interest.
He disclosed that major institutional investors, including BlackRock and international rating agencies, have shown increased appetite for Nigerian assets in recent months.
“Two years ago, many Nigerians had lost hope and were moving assets abroad. Today, we are witnessing an incredible increase in interest. Those who sat on the sidelines are now saying: this is the time to get in,” he said.
The governor credited this optimism to two years of consistent policy messaging, reforms, and what he described as “uncompromising execution.”
Digital Transformation and Next-Generation Monetary Policy
Beyond FX reforms, Cardoso said the CBN was embracing digital transformation to modernize monetary policy and strengthen financial inclusion.
He announced that the CBN board had held a retreat focused on innovation and the adoption of emerging technologies such as artificial intelligence and digital currencies.
In collaboration with the Securities and Exchange Commission (SEC), the apex bank is developing a digital finance roadmap that will guide the use of technology to improve efficiency and transparency in Nigeria’s financial system.
“Our next-generation leadership strategy focuses on innovation, governance, and sustainability,” Cardoso said.
“By integrating AI and digital tools, we are positioning Nigeria’s monetary system for the future.”
FX Backlog Clearance and Policy Stability Inspire Optimism
Cardoso reiterated that the CBN’s ultimate goal remains macroeconomic stability—an essential foundation for attracting sustainable investment.
“By the time I leave the Central Bank, you won’t need to know anybody to get your business going. Today, most Nigerians can already use their naira debit cards abroad—something unthinkable two years ago,” he said.
He concluded his lecture on an optimistic note, declaring that Nigeria’s economic outlook was bright and that the combination of FX backlog clearance, transparency, and consistent communication had repositioned the country for growth.
“Two years of consistent messaging and reforms have taken us to a good place. In one word, the future of Nigeria is bright,” he affirmed.
The Dean of Lagos Business School, Professor Olayinka David-West, commended Cardoso’s leadership style, describing the lecture series as a reflection of his commitment to transparency and accountability—principles he had promised to uphold during his Senate confirmation.
The event was attended by top financial leaders, including Segun Alebiosu of FirstBank, Wole Adeniyi of Stanbic IBTC, Yetunde Oni of Union Bank, Miriam Olusanya of GTBank, and Temi Popoola, CEO of the Nigerian Exchange Group.
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