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The increase in autonomous FX inflows, foreign portfolio investments, and non-oil export proceeds has enabled local banks to expand international spending limits on naira cards while also supporting foreign direct investment (FDI) inflows into the domestic economy.

Before the Olayemi Cardoso-led management team assumed office in October 2023, one of the most pressing challenges confronting Nigeria’s economy was foreign exchange scarcity. Businesses and travelers were often forced to rely on the parallel market to source foreign currency, creating an environment that encouraged speculation and market distortions.

To address the situation, the CBN embarked on a series of reforms aimed at attracting foreign capital, improving price stability, and stabilising the exchange rate. Among its key initiatives were the liberalisation of the foreign exchange market and the discontinuation of Central Bank financing of fiscal deficits. These measures helped restore investor confidence, enabling Nigeria to return successfully to international capital markets last December and secure upgrades from major rating agencies.

The reforms have also significantly strengthened the country’s external reserves and improved liquidity in the FX market.

Banks Resume International Use of Naira Debit Cards

Reflecting the improved availability of foreign exchange, Nigerian banks began lifting the more than three-year suspension on the use of naira-funded debit cards for international transactions.

Last week, Guaranty Trust Bank (GTBank) increased the quarterly dollar spending limit on its naira cards to $20,000, providing customers with greater purchasing power while traveling abroad.

In an email to customers titled “Important Update on Your GTBank Naira Card,” the bank announced:

“The Dollar Limit on your GTBank Naira Card is now $20,000 quarterly. The funds are reliably available on Point of Sale (POS) and online transactions.”

Previously, the bank had maintained a quarterly limit of $1,000 for online and POS transactions, while ATM withdrawals were capped at $500.

Other banks have followed suit. United Bank for Africa (UBA) Plc, FirstBank, and Wema Bank Plc have all reactivated international transactions on naira debit cards.

In a notice to customers, UBA stated that the move aligns with its commitment to delivering seamless and enhanced banking experiences.

“In line with our continued commitment to providing you with seamless and enhanced banking experiences, we are pleased to inform you that all UBA Premium Naira Cards, including Gold, Platinum, and World variants, are now enabled for international transactions.

“This means you can now use your Premium Naira Card for everyday payments, online shopping, POS, and ATM transactions across the world with greater ease and flexibility.

“If you haven’t used your card recently, now’s a great time to rediscover the convenience and prestige that comes with being a UBA premium cardholder.”

Similarly, Wema Bank informed customers that they can now make dollar-denominated payments using their naira cards.

“Your Wema Naira Mastercard just went global! Now you can pay in dollars on all your favourite international platforms, Amazon, eBay, AliExpress, Netflix, Spotify, and YouTube.”

FirstBank also notified customers that its Naira Mastercard can once again be used for international transactions.

“Shop online or spend up to $500 every month on your preferred channel seamlessly,” the bank said.

To further simplify international transactions for its customers, FirstBank, in partnership with Visa, recently launched Visa Signature, a premium card offering tailored to Nigeria’s affluent segment.

Visa Signature is targeted at top executives, business owners, and frequent international travelers who demand more sophisticated financial products.

Commenting on the initiative, Chuma Ezirim, Group executive, eBusiness and retail products at FirstBank, said, “At FirstBank, we are dedicated to creating financial solutions that reflect the evolving lifestyles of our customers.”

Highlighting the strategic importance of the partnership, Andrew Uaboi, vice president and Cluster head, West Africa, Visa, noted, “Nigeria’s affluent consumers are among the most active and globally connected spenders on the continent. Visa Signature is designed to serve that profile with the depth of benefits and breadth of acceptance they deserve. We are delighted to work with FirstBank in making this available to the Nigerian market.”

Ayokunle Olubunmi, head of Financial Institutions Ratings at Agusto & Co, attributed the reactivation of naira cards for international transactions to improved liquidity in the FX market.

“The moderating premium in the parallel market and the reduced arbitrage opportunities are also responsible for the decision,” he said.

Bismarck Rewane, managing irector of Financial Derivatives Company Limited, linked the rise in FX inflows to stronger oil prices and the multiple inflow channels established by the CBN.

According to him, the apex bank activated several foreign exchange sources to boost dollar inflows, improve access for manufacturers and retail users, and support the recovery of the naira across markets.

Through initiatives aimed at improving diaspora remittances, licensing new International Money Transfer Operators (IMTOs), implementing a willing buyer–willing seller FX framework, and ensuring timely access to naira liquidity for IMTOs, the CBN has simplified foreign exchange inflows for authorized dealers and other participants in the value chain.

Policies Driving Market Confidence

Abiodun Adedipe, founder and chief consultant of B. Adedipe Associates Limited (BAA Consult), identified several major policy reforms that are delivering positive outcomes for the economy.

According to him, the CBN’s foreign exchange reforms have eliminated opportunities for arbitrage and round-tripping. He also noted that the removal of petrol subsidies has ended what he described as an annual waste of approximately $10.7 billion while fostering a more competitive environment.

Adedipe added that ongoing bank recapitalisation is creating stronger institutions capable of supporting the government’s ambition of building a $1 trillion economy. At the same time, fiscal consolidation efforts are helping to plug leakages, improve accountability through technology deployment, and expand fiscal space across sub-national governments.

He argued that the most transformative reform remains the ongoing tax reform agenda, which has the potential to stimulate regional competition, a factor he described as central to China’s economic renaissance.

He further pointed to initiatives such as the Nigerian Education Loan Fund, the Consumer Credit Corporation, the recapitalised Bank of Agriculture, the National Credit Guarantee Company Limited, and plans for single-digit mortgage interest rates as critical measures for sustaining long-term economic growth.

How the Economy Benefits

Adedipe noted that Nigeria’s economic prospects are strengthened by its large, youthful, and rapidly growing population, estimated at 237.53 million in July 2025, making it the sixth-largest population in the world with a median age of 18.1 years.

He also highlighted the country’s rapid urbanization, with urban population growth rising to 54.28 percent in December 2023, up from 46.12 percent in 2013 and 51.96 percent in 2020.

Internet penetration has also continued to deepen, reaching 48.15 percent in April 2025, compared with 45.57 percent in August 2023 and 31.48 percent in December 2018.

Nigeria’s tele-density stood at 79.65 percent in May 2025, compared with 76.08 percent in December 2024. The figure had previously reached 102.97 percent in December 2023 before a data clean-up exercise conducted at the end of April 2024.

“Of global internet users, Nigeria, with 123 million users, ranks 11th globally and seventh in mobile internet usage, with over 84 percent accessing the internet through mobile devices.

“Local oil refining continues to expand, with prospects for additional refineries. Manufacturing is reviving, and interest in non-oil exports is growing. Improvements in infrastructure will begin to positively impact the cost of doing business,” he said.

He added that sustained structural reforms would strengthen Nigeria’s global competitiveness, improve the ease of doing business, reduce leakages, and shrink opportunities for economic rent-seeking.

Collaboration Between Fiscal and Monetary Policies

The CBN has emphasised that monetary reforms cannot succeed in isolation. According to the apex bank, alignment between fiscal and monetary policies has strengthened Nigeria’s macroeconomic stability and produced tangible results, including lower domestic borrowing costs, improved liquidity conditions, and more predictable fiscal operations.

One key example is the discontinuation of direct deficit financing by the Central Bank.

“This stance is unequivocal. There will be no return to the practice of financing fiscal deficits by the Central Bank.

“In parallel, the fiscal authorities have embarked on key institutional reforms, including the implementation of a Revenue Optimisation (RevOp) framework, the establishment of a new National Revenue Agency, and upgrades to the Treasury Single Account (TSA), to strengthen revenue mobilisation and public financial management,” Cardoso said.»

He added, “As we transition towards a full-fledged inflation-targeting framework, this partnership will deepen, ensuring fiscal and monetary policies reinforce each other in delivering durable price stability.”

The Journey So Far

Since assuming office in 2023, the current administration and the CBN under Cardoso have implemented a broad range of reforms designed to attract foreign capital, stabilise prices, and strengthen the exchange rate.

These measures included the liberalisation of the foreign exchange market, the cessation of Central Bank financing of fiscal deficits, and reforms to the fuel subsidy regime. The government also intensified revenue collection efforts and adopted strategies to address rising inflation.

Since the implementation of these reforms, international reserves have increased, and access to foreign exchange through official channels has improved significantly.

Nigeria successfully returned to international capital markets last December and has since received positive ratings upgrades. In addition, a new domestic private refinery is helping position the country higher in the value chain within a fully deregulated energy market.

CBN policies, particularly exchange rate reforms, have contributed to stronger foreign investment inflows and reduced the need for interventions in the domestic FX market.

The unification of exchange rates and the clearance of more than $7 billion in FX backlog obligations significantly improved investor sentiment. Multilateral institutions, including the World Bank, have described the measures as bold interventions capable of improving the long-term sustainability of the economy.

Nigeria’s sovereign risk spread has also fallen to its lowest level since January 2020, eliminating the risk premium accumulated during the pandemic and the subsequent economic pressures. These developments form part of broader efforts to attract investors and sustain capital inflows.

As part of its efforts to combat inflation, the CBN recently hosted a Monetary Policy Forum that brought together fiscal authorities, lawmakers, private-sector leaders, development partners, academics, and subject-matter experts under the theme: “Managing the Disinflation Process.”

The forum represented a major effort to improve monetary policy communication, encourage dialogue, and strengthen collaboration on issues shaping monetary policy outcomes.

During the event, Cardoso reiterated the apex bank’s commitment to maintaining price stability, transitioning toward an inflation-targeting framework, restoring purchasing power, and easing economic hardship.

He emphasised that the CBN remains committed to a disciplined and forward-looking monetary policy approach aimed at curbing inflation and stabilising the economy.

“Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence.

“Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” Cardoso said.

He reaffirmed that the CBN’s objective is to ensure that monetary policy remains forward-looking, adaptive, and resilient in addressing Nigeria’s evolving economic challenges.