Market News

By Ayobami Oyalowo 

Cardoso’s accolade as African Banker Magazine’s Central Bank Governor of the Year did not come by chance; it is the culmination of a series of bold and strategic interventions that have fundamentally altered Nigeria’s monetary landscape. 

In May 2025, at the African Banker Awards Gala in Abidjan, Côte d’Ivoire, Olayemi Cardoso was honoured for “steering monetary and regulatory reforms that restored stability and confidence in Nigeria’s financial system.” 

The award committee emphasized that his policies had laid the

“groundwork for long-term macroeconomic resilience and renewed investor confidence’’.

Cardoso’s journey to the helm of the CBN began with his appointment by President Bola Tinubu on 15 September 2023, confirmed by the Nigerian Senate eight days after. 

A seasoned banker and former Commissioner for Economic Planning and Budget in Lagos State, Cardoso brought decades of private sector and public service experiences to the apex bank. 

His tenure opened at a time when Nigeria was grappling with severe inflationary pressures, an opaque and fragmented Foreign Exchange (FX) market, and dwindling investors’ confidence. 

His mandate was to restore the CBN’s credibility by realigning it with orthodox monetary principles and insulating it from political interference.

Foremost among Cardoso’s early interventions was the unification of Nigeria’s FX market. In June 2023, just before he assumed office, the CBN collapsed multiple FX windows into a unified Investors and Exporters (I&E) window, ushering in a market-led regime aimed at converging official and parallel exchange rates. 

By early 2024, under Cardoso’s watch, the CBN launched the Electronic Foreign Exchange Matching System (EFEMS) on Bloomberg’s B-Match platform—an electronic trading system designed to enhance transparency, price discovery, and operational efficiency in the FX market. These measures addressed longstanding distortions caused by speculative trading and multiple exchange rates. 

Additionally, comprehensive FX guidelines and the Nigeria FX Code were introduced to enforce ethical conduct and standardized operations for authorised dealers. 

The combined effect was a narrowing of the gap between official and parallel rates, which improved market functioning and, by extension, naira stability.

These critical steps have contributed to a notable rise in Nigeria’s Net Foreign Exchange Reserves (NFER), which jumped to $23.11 billion at the end of December, 2024, a significant leap from $3.99 billion recorded at the end of 2023. NFER provide a more accurate measure of Nigeria’s financial stability and its capacity to meet foreign obligations. They are calculated by subtracting the country’s foreign exchange liabilities from its gross foreign exchange reserves, serving as a vital buffer against a depreciating naira.

Furthermore, Bloomberg reported that Cardoso’s “exchange-rate reforms have made the naira more competitive,” enticing investors to re-evaluate Nigeria’s assets. 

Standard Chartered Bank’s Head of Africa Strategy, Samir Gadio noted that “portfolio inflows have likely been supported by improved confidence amid key structural reforms, better FX market functioning, and moderating dollar-naira volatility”. 

Complementing the FX interventions, Cardoso’s CBN adopted a contractionary monetary stance. 

The Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MPR) to 26.75 percent early in his tenure and retained it at 27.50 percent by February 2025 to anchor inflation expectations. The MPC also maintained a high Cash Reserve Ratio (CRR) of 50 percent for deposit money banks and a Liquidity Ratio of 30 percent to rein in excessive credit growth and curb inflationary pressures. 

In January 2025, Cardoso chaired the 2025 Monetary Policy Forum, where he reaffirmed the need for coordinated fiscal and monetary actions and transparency in policy decisions to enhance investor confidence and foster macroeconomic stability

Recognizing that economic stability must be inclusive, Cardoso prioritized digital financial inclusion. In early 2025, CBN introduced two new financial products for Non-Resident Nigerians (NRNs): the Non-Resident Nigerian Ordinary Account (NRNOA) for seamless multi-currency remittances and the Non-Resident Nigerian Investment Account (NRNIA) to facilitate diaspora investments in both foreign and local currencies. 

These products, launched via a circular from the Trade and Exchange Department on 10 January 2025, grant NRNs greater access to capital markets and encourage inflows that bolster foreign reserves and domestic investment. Furthermore, in mid-May 2025, the CBN and Nigeria Inter-Bank Settlement System (NIBSS) unveiled the Non-Resident Bank Verification Number (NRBVN), a digital gateway enabling Nigerians abroad to obtain a BVN remotely. 

This platform, projected to help achieve $12 billion in annual diaspora remittances, reduces reliance on informal channels and lowers remittance costs, which averaged over 7 percent 7 in Sub-Saharan Africa.

These overlapping reforms—spanning FX, monetary policy, and digital inclusion—had a synergistic effect. Bloomberg highlighted how confidence in Nigeria’s currency “has finally found its footing”. It  noted that elevated yields and structural reforms made Nigerian assets “less correlated with global risk conditions” and attractive to global portfolio investors. 

By 2025, investors were bullish on Nigerian assets, with foreign inflows into treasury instruments and equities reflecting restored trust in the naira and the broader economy. 

Capital inflows into the economy jumped from $0.33 billion in January 2024 to $2.06 billion in the corresponding month of 2025, marking a 524.24 percent increase in one year.

The “Central Bank Governor of the Year” award for Mr. Cardoso was not merely a personal accolade but a powerful affirmation of the collective effort within the CBN and the tangible progress being made in repositioning Nigeria’s economy. 

His reforms have not only significantly improved the CBN’s credibility with global agencies but also played a crucial role in attracting substantial commitments from foreign investors, signalling renewed confidence in Nigeria’s economic prospects. 

Viewed by many as the “Headmaster”—a nod to his reputation for discipline, clarity, and rigorous standards in managing complex financial systems—Cardoso’s leadership has demonstrated that orthodox monetary principles, when applied with clear-eyed pragmatism and robust stakeholder engagement, can yield transformative results.