Nigeria’s foreign reserves have exceeded the $40 billion mark for the first time in three years, marking a significant milestone in the country’s economic recovery. Central Bank of Nigeria (CBN) Governor Olayemi Cardoso attributed this achievement to various reforms aimed at stabilizing the financial sector. Cardoso made this announcement during a meeting with Talal Al-Humond, the Assistant Governor for Monetary Affairs at the Saudi Arabian Central Bank, at the inaugural Conference on Emerging Market Economies in Riyadh.
Among the key reforms credited with boosting the reserves is the implementation of an electronic matching system, which enhances transparency in the foreign exchange market. Additionally, the introduction of a new foreign exchange code of ethics, signed by all Nigerian banks, ensures adherence to strict market rules and fosters investor confidence. These measures have played a crucial role in improving market stability and attracting foreign investment.
At the conference, Cardoso also emphasized the importance of strengthening economic ties between Nigeria and the Middle East, particularly in areas such as infrastructure, economic diversification, and tourism investment. He further highlighted the role of the Nigerian diaspora in boosting the nation’s financial sector, urging greater remittance flows to support economic growth.
The CBN governor addressed the ongoing challenges in Nigeria’s financial markets, including high inflation, capital flight, and a widening gap between the official and parallel exchange rates. However, Cardoso noted that through consistent policy measures and improved transparency, the exchange rate gap has been reduced from as much as 60% to around 4-5%. This progress reflects a more stable economic environment, fostering investor confidence.
In addition to these reforms, Cardoso outlined the CBN’s efforts to curb inflation and ensure macroeconomic discipline, including raising interest rates by 850 basis points over the past year. He also discussed the removal of the petrol subsidy, which had been draining the economy, and mandated banks to increase their capital base to build resilience. Financial inclusion remains a priority, with Cardoso stressing the need to expand access to financial services, particularly in underserved communities, through digitalization and mobile money services.