Since Olayemi Cardoso assumed office as Governor of the Central Bank of Nigeria (CBN) in October 2023, a raft of reforms aimed at stabilising the Nigerian economy has begun to yield results. By embracing orthodox monetary policy, raising the Monetary Policy Rate to 27.5%, and focusing on reducing money supply growth, the CBN has made substantial progress in controlling inflation, which had exceeded 30%. These policy shifts, coupled with fiscal discipline and economic diversification initiatives, are reinforcing investor confidence and gradually restoring macroeconomic stability.
A major highlight of the reforms is the unification of Nigeria’s multiple exchange rates, which has eliminated arbitrage opportunities and cleared a $7 billion FX backlog. The introduction of an electronic foreign exchange matching system and the Nigeria Foreign Exchange Code (FX Code) has enhanced transparency and reduced market distortions. This renewed transparency has not only boosted confidence among businesses and foreign investors but also earned Nigeria a ratings upgrade from Fitch, signalling improved prospects for accessing international credit markets.
To further stimulate foreign exchange inflows and deepen financial inclusion, the CBN introduced two financial products for Nigerians in the diaspora: the Non-Resident Nigerian Ordinary Account and the Non-Resident Nigerian Investment Account. These innovations simplify remittances, encourage diaspora investments in both naira and foreign currencies, and give Nigerians abroad a structured platform to support national development. Diaspora remittances are increasingly seen as a stable alternative to other foreign inflows, and these new accounts are expected to double formal remittance receipts in the coming year.
Overall, CBN’s multi-pronged reforms are not only helping the country recover from years of economic stagnation but are also building long-term resilience in the face of global uncertainties. The emphasis on transparency, inflation control, FX market liberalization, and diaspora engagement has already begun to reposition Nigeria as an attractive destination for investment. With continued implementation, these measures may well serve as a blueprint for economic revival in other emerging markets facing similar fiscal and monetary challenges.
Source: Business day