Three years after Olayemi Cardoso took the saddle as governor of the Central Bank of Nigeria (CBN), one thing is increasingly difficult to dispute: the CBN is a very different institution from the one he inherited.
The transformation has involved a return to more orthodox monetary policy, a substantial overhaul of the foreign-exchange market, a retreat from quasi-fiscal interventions, tighter banking supervision and one of the biggest banking recapitalisation exercises in recent years.
Available figures provide evidence of a considerable level of stabilisation. Nigeria’s gross foreign reserves stood at $55.25 billion as of September 18, 2026, the highest level in 18 years and enough to cover about 11.3 months of imports of goods and services. The naira has also strengthened into the N1, 300s/$ in the official and parallel markets, a marked change from the disorderly adjustment that followed the 2023 FX reforms.
Inflation has slowed considerably – though still high- with the headline number settling at 15.39% in August 2026, and substantially down from the elevated levels recorded during the first part of Cardoso’s tenure.
In its assessment, the International Monetary Fund (IMF) acknowledged that “strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience” in Nigeria.
That is an important achievement for a central bank governor who inherited an institution facing questions about monetary credibility, foreign-exchange management, deficit financing and governance.
But there is another side to the story: though the CBN can stabilise money, it cannot produce tomatoes. It can improve the FX market, but it cannot repair roads between farms and markets. It can recapitalise banks, but it cannot make electricity reliable.
That distinction is increasingly important as Africa’s most populous economy moves from stabilisation to the harder business of turning macroeconomic improvement into higher productivity, better incomes and a lower cost of living.
The Cardoso reset
At his Senate screening in 2023, Cardoso outlined a 10-point reform agenda that included compliance with the CBN Act, monetary and price stability, stronger corporate governance, an exit from quasi-fiscal functions, improved payment systems, financial inclusion, consumer credit and closer collaboration with fiscal authorities to build reserves and ensure sustainable FX liquidity.
That reset also extended inwards, with corporate governance, compliance and accountability placed at the centre of his agenda to rebuild the CBN’s institutional credibility and restore clearer lines of responsibility.
The institutional reset also produced an important external milestone. In October 2025, Nigeria was removed from the Financial Action Task Force’s grey list after completing reforms to strengthen its anti-money-laundering and counter-terrorist-financing framework. The CBN was among the institutions involved, particularly through stronger supervision and compliance oversight.
Much of the subsequent CBN agenda has followed that blueprint. The bank has tightened monetary conditions, strengthened its regulatory framework, cleaned up the FX market and moved to rebuild confidence in its operating framework. Cardoso himself described the objective, saying the CBN’s “responsibility was to restore stability and maintain both price and financial stability.”
The foreign-exchange reform is perhaps the most visible example. The old system of multiple rates, administrative allocations and persistent dollar shortages gave way to a more market-oriented framework. The CBN subsequently introduced the Electronic Foreign Exchange Matching System (EFEMS) and the Nigerian FX Code, designed to improve transparency, price discovery, market conduct and governance.
Reflecting on the reform three years into his tenure, Cardoso said the CBN’s “willing buyer, willing seller” system had “eliminated that huge distortion” that had plagued the economy for years.
The significance goes beyond the exchange rate because a functioning FX market is infrastructure for an economy that imports machinery, raw materials, pharmaceuticals, technology and other productive inputs. Businesses can also make investment decisions more rationally when they have greater confidence about how they will obtain and price foreign currency.
“The CBN unified the exchange rate… and the FX system started to become a real FX market,” Chika Mbonu, an ARISE business analyst, stated. That may be one of the clearest descriptions of what Cardoso’s CBN has attempted to achieve in the past three years.
Rebuilding the external buffer
The accumulation of reserves is another important marker. Nigeria’s reserves have risen by more than $8.5 billion since the beginning of 2026, reaching $55.25 billion as of September 18.
But the more important story is that foreign-exchange inflows are becoming stronger and increasingly moving through formal channels.
Cardoso’s target of attracting $1 billion a month in diaspora remittances, set in 2024 when monthly inflows were around $600 million, is now within sight. Formal remittance inflows through international money transfer operators hit a record $947 million in July 2026, while inflows in the first seven months of the year rose to $3.8 billion, 50.2% above the same period in 2025.
More dollars entering through formal channels improve visibility over foreign-currency flows, strengthen market liquidity and add to the pool available to support the naira and external reserves.
That buffer matters because reserves provide the CBN with room to manage market stress, meet external obligations and reduce the likelihood that every bout of dollar scarcity becomes a currency crisis.
The IMF notes that gross international reserves increased to $46 billion in 2025 from $40 billion at the end of 2024, while net international reserves rose from $23 billion to $35 billion over the same period. The latest CBN data shows how the improvement has continued.
The durability of that improvement, however, will depend heavily on oil production, export earnings, remittances and the wider fiscal and external position.
The inflation battle
Cardoso’s second defining intervention has been monetary tightening to battle stubborn inflation.
The CBN pushed its policy rate aggressively higher as inflation accelerated, eventually taking the Monetary Policy Rate to 27.5% before beginning a gradual easing cycle. In February 2026, it reduced the rate to 26.5%, retaining that level at its May and July meetings. The strategy was to ensure monetary policy regained control of inflation expectations.
That easing has now accelerated. At its September meeting, the MPC cut the MPR by 350 basis points to 23%, its lowest level in 31 months, while recalibrating the framework governing its standing facilities.
The CBN has stressed that the adjustment is intended to reconnect its policy rate more closely with money-market rates rather than signal an abandonment of its restrictive stance.
The World Bank has also acknowledged that Nigeria has made “meaningful progress in restoring macroeconomic stability” as inflation, external and fiscal positions improved.
Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise, described the recent monetary adjustment as measured and data-driven, pointing to falling inflation, stronger reserves, an improved trade balance and greater FX stability.
A stronger banking system
The CBN’s recapitalisation programme has delivered one of the biggest restructurings of Nigeria’s banking sector in years. The 24-month exercise, which ended on March 31, 2026, saw 33 of the 37 licensed banks meeting the new thresholds. Collectively, banks raised about N4.65 trillion, with 72.55% coming from domestic investors and 27.45% from foreign investors.
The goal was not simply bigger banks, but stronger ones—better able to absorb shocks, expand lending and finance a larger economy.
Just as significant was what did not happen: no bank runs, depositor losses or disruption to customers. Muda Yusuf described the exercise as “orderly, non-disruptive and confidence-enhancing.”
But recapitalisation is a means, not an outcome, experts say. A stronger capital base can support more lending and investment; it cannot, by itself, deliver either. The next test is what banks do with the capital—and whether that translates into credit for businesses, infrastructure and productive investment.
Retreat from quasi-fiscal intervention
Perhaps one of the quieter but more consequential parts of Cardoso’s reset has been the CBN’s retreat from quasi-fiscal intervention.
Under previous administrations, the Bank had become deeply involved in development financing, targeted credit schemes and, importantly, the financing of government through ways and means advances.
Cardoso has since pointed to the scale of that legacy. The CBN accumulated N23.7 trillion in ways and means advances, alongside more than N10 trillion in other interventions. His argument was that the resulting liquidity had contributed to the inflationary pressures the new administration inherited.
Most of the ways and means balance was securitised in 2023 and converted into longer-term public debt. Since then, the Cardoso-era CBN has drawn a clearer line.
This shift is more than a balance-sheet adjustment. It represents an attempt to return the CBN to its core mandate of monetary and financial stability, rather than using its balance sheet as a routine source of government financing or development funding.
It also places greater responsibility on fiscal authorities to fund government through revenues and properly structured borrowing, while giving monetary policy greater room to focus on price stability.
Payment-system and financial-sector reforms
Cardoso’s reset has also extended to the architecture beneath Nigeria’s financial system, with the CBN strengthening payment infrastructure, tightening supervision and deepening digital finance, financial inclusion and consumer protection.
NIBSS data show that more than 11.2 billion electronic transactions worth over N1.07 quadrillion were processed in 2024. Abdullahi Sani, CBN deputy governor, corporate services, described the expansion of Nigeria’s digital-payments landscape as “remarkable”.
The ambition now extends to Payments System Vision 2028, launched by the CBN in June 2026 and built around interoperability, security, innovation, inclusion, trust and collaboration. Cardoso described it as “a vision for how Nigerians will transact, trade, save, invest, and participate” in an increasingly digital economy.
At the same time, tighter oversight of banks, fintechs and payment providers, alongside the recapitalisation programme, is strengthening the sector’s resilience and capacity to support growth.
For an economy rapidly moving towards digital transactions, these are more than technology upgrades. They are part of the financial infrastructure on which Nigeria’s next phase of commerce and economic activity will depend.
What the CBN cannot fix
A central bank can influence the price and availability of money. It cannot determine the quantity of food Nigerian farmers produce. Food inflation is a supply-side problem as much as a monetary one.
Nigeria still faces insecurity in agricultural areas, inadequate irrigation, high input costs, poor storage, weak rural roads and expensive movement of produce from farms to cities.
The World Bank has linked transport infrastructure to farmers’ access to markets, agricultural marketing and food-supply resilience, noting how poor road infrastructure hampers development and limits access to agricultural markets.
That is territory for the fiscal authorities, state governments and sector regulators.
The same applies to electricity. Manufacturers and small businesses cannot borrow their way out of unreliable power. They need functioning generation, transmission and distribution infrastructure, and an investment framework that allows private capital to participate sustainably.
Bismarck Rewane, managing director of Financial Derivatives Company, recently put the issue starkly: “economic productivity in Nigeria must increase; it will be driven by power, agriculture and manufacturing.”
That is the economic bridge Nigeria now needs to build.
Fiscal policy must carry its share
The biggest unfinished part of the stabilisation story may therefore lie outside the CBN.
The IMF estimates Nigeria’s consolidated government deficit at 4.4% of GDP in 2025, while interest payments absorbed 53.2% of federal government revenue. It has also stressed the need for stronger revenue mobilisation and better fiscal management.
This is where fiscal policy becomes indispensable, and the need for policy coordination is beginning to take a more formal shape. The federal government and the CBN have signed a memorandum of understanding aimed at strengthening policy coordination between monetary and fiscal authorities.
This is important because if monetary policy is trying to bring inflation down while government spending, borrowing or weak budget execution pushes in the opposite direction, gains are eroded.
Paul Alaje, chief economist at SPM Professionals, has argued that the fiscal authorities must complement the CBN’s work by ensuring prompt budget implementation and financing critical sectors such as energy, rail and infrastructure.
“Priority for us as a nation is stability,” Alaje said. “But stability itself is not a target. It is to make our nation prosperous. It is to make our people empowered. It is to reduce poverty in our nation.”
From stability to productivity
Nigeria’s next challenge is to convert the CBN’s stabilisation gains into economic capacity. That means more productive agriculture, better roads, cheaper logistics, reliable electricity, higher oil production, stronger infrastructure and more efficient public spending. It also means addressing weak productivity and household incomes.
The World Bank confirms that household incomes have yet to recover and poverty remains high despite the improvement in macroeconomic conditions. Its April 2026 Nigeria Development Update argues that Nigeria now needs to use the stability created by reforms to accelerate inclusive growth, human-capital investment and productivity.
This is the next chapter of the economic story.
Cardoso’s CBN has spent three years repairing the monetary plumbing: rebuilding credibility, improving the FX market, tightening policy, strengthening reserves and recapitalising banks, among other feats.
The fiscal authorities now have to ensure that the wider economy has somewhere productive for that stability to flow.
That means using improved revenues to fund infrastructure rather than allowing capital budgets to roll over indefinitely. It means tackling electricity harder and transport costs that feed directly into the prices of almost everything Nigerians buy. It means improving agricultural productivity and security so food supply can expand. It means using stronger oil production and external buffers to support, rather than substitute for, broader economic diversification. It means better jobs and rising household incomes.
And perhaps the fairest way to assess Cardoso at three is: the central bank has done much of the work that belongs on its side of the economic ledger. The unfinished work increasingly sits with the fiscal authorities, state governments and institutions responsible for infrastructure, energy, agriculture, security and productivity.
The saddle is shifting. The next chapter is execution.
Onyinye Nwachukwu is the Abuja Bureau Chief of BusinessDay, overseeing coverage across Abuja and Northern Nigeria. With more than two decades of experience in economic and financial journalism, she reports on business, policy, and market trends, linking local developments to the global economy. A fellow of the International Monetary Fund (IMF) and recipient of the P. Vishwanathan Memorial Award for Excellence in Financial Journalism, she is known for her insightful storytelling and interviews with senior policymakers, diplomats, and business leaders. Well traveled and globally minded, Onyinye brings depth and international perspective to her reporting.
