Toni Kan
As 2026 dawns, Olayemi Cardoso, governor of the Central Financial institution of Nigeria and his colleagues on the apex financial institution should little doubt be taking inventory and reviewing the financial institution’s efficiency in 2025.
Some 12 months earlier than, Cardoso was bemoaning the mess he and his workforce met on the CBN – extreme macroeconomic distortions, surging inflation, evaporated FX liquidity, non-existent exterior reserves, weakened belief in financial administration, unorthodox financial practices that had eroded confidence and a overseas trade market that was in paralysis with a backlog of over US$7 billion in unmet FX obligations undermining market integrity and the 60% unfold between official and parallel market charges creating distortions.
This 12 months, the monetary and financial coverage panorama has modified dramatically. A cursory consideration of the financial institution’s Month-to-month Replace for December 25, 2025 reads like a listing of successes in comparison with the jeremiads of 2024.
And if anybody was unsure as to progress made, the Governor’s keynote on the CIBN annual bankers’ dinner on Friday, November 28, 2025 was not simply 5 pages shorter than the 2024 speech it was additionally totally different in tenor. It was upbeat and optimist and little doubt a mirrored image of the optimistic temper that should permeate the CBN as 2025 ends.
For starters, the phrase “improved” appeared 24 occasions within the 14 pages. Hear him: “I’m happy to report significant progress on all three fronts, at the same time as we stay totally conscious of the work forward. Our actions proceed to mirror the coverage route we articulated from the outset, in different phrases, we mentioned what we’d do, and now we have accomplished it, transparently and constantly.”
That coverage route has seen optimistic outcomes on many fronts in what Cardoso described as an economic system that “has transitioned from disaster administration to laying the groundwork for a sustainable restoration.”
The Nigerian economic system grew by 4.23% within the second quarter of 2025, larger than the IMF/World Financial institution’s projection of three.8% for sub-Saharan Africa. Inflation, whereas nonetheless in double digits, has dropped by over half from a peak of 34.6% in November 2024, to 14.45% in December reflecting over 7 months of constant disinflation.
This, Cardoso famous, has not solely restored “actual buying energy for households and companies,” however has additionally borne out the apex financial institution’s insistence on a “disciplined execution and Nigeria’s return to orthodox financial coverage.”
Whereas the Financial Coverage Charge (MPR), a key inflation moderating device stays at 27%, Cardoso has famous that with the apex financial institution’s modelling pointing to continued disinflation in 2026, the coverage price will likely be calibrated in keeping with evolving information.”
As soon as the $7bn FX backlog was cleared, the CBN centered on lowering opacity, eradicating manipulation, and restoring self-discipline to the overseas trade market in different to reap the advantages of the trade price unification. The end result has been an enormous contraction within the hole between the official and parallel market charges which has shrunk from 60% to 2% with the naira closing the 12 months at N1,442.51 to the greenback.
The sanitisation of the overseas trade market and strengthening of the naira was supported and buoyed largely by the introduction of the Nigerian Overseas Alternate Code which established and insisted, in line with Yemi Cardoso, on “clear guidelines for transparency, ethics, governance, and honest dealing amongst authorised sellers whereas the deployment of the Digital Overseas Alternate Administration System (EFEMS) system, powered by Bloomberg BMatch, has reworked FX buying and selling via obligatory order submission, real-time regulatory visibility, and enhanced value discovery.”
The end result? Market stability and enhanced investor confidence seen in a 70% enhance (US$20.98 billion) in overseas capital inflows within the first ten months of 2025 in comparison with whole inflows for 2024. For additional context, the determine displays a 428% surge in comparison with the US$3.9 billion recorded in 2023.
The improved situations have additionally been evident in accretions in overseas reserves which grew from $40bn in November 2024 to a seven 12 months excessive of US$46.7bn by mid-November 2025 “offering over 10 months of ahead import cowl and considerably enhancing the economic system’s resilience.”
Cardoso was fast to level out that the rise has been natural. In line with the CBN governor “what’s most vital right here is that our FX reserves are being rebuilt organically, not by borrowing, however via improved market functioning, stronger non-oil exports, and sturdy capital inflows.”
Whereas some analysts have remarked on the excessive proportion of overseas portfolio investments versus overseas direct investments relating to the overseas reserves, they appear to low cost the contribution of diaspora remittances which elevated by roughly 12% in 2025 due to the launch of the Non-Resident BVN in January.
Overseas capital inflows are anticipated to develop additional in 2026 as consciousness heightens across the Non-Resident BVN and as Nigeria begins to reap the advantages of its exit from the gray checklist of the Monetary Motion Process Power (FATF) following what Cardoso described as “a coordinated nationwide effort led by the Federal Authorities, with essential contributions from the Central Financial institution of Nigeria, the Ministry of Justice, the NFIU, the EFCC, and our regional companions.”
Nigeria’s exit from the gray checklist, in line with the apex financial institution governor “indicators a serious restoration of confidence and eases compliance frictions for correspondent banks” with tangible advantages of an estimated $30 billion in potential funding.
Three months to the tip of the banking recapitalisation train, Cardoso has excellent news to share. The governor who had hinted throughout a Q&A session on the London Enterprise College in October, that banks unable to fulfill the continuing recapitalisation goal might need to downgrade their banking licences, mentioned the recapitalisation train is continuing apace.
“I’m happy to report that a number of banks have already met the brand new capital thresholds, whereas others are advancing steadily and are nicely positioned to comfortably meet the March 31, 2026, deadline. So far…sixteen have already met or exceeded the brand new necessities – a transparent testomony to the depth, resilience, and capability of Nigeria’s banking sector.”
Whereas the CBN governor has offered his rating card, one wonders whether or not the world is taking discover and Nigerians are feeling the impact of those enhancements. Inflation smart, the worth of a 12kg bag of rice hovered round N50,000 through the Christmas interval down from over N80,000 to N100,000 in 2024. The downward pattern has been mirrored in different prices.
Ranking businesses are clearly taking discover too, with Fitch, Moody’s, and Commonplace & Poor’s upgrading Nigeria’s rankings and acknowledging as Cardoso put it: “fundamentals are strengthening, reform credibility is rising, and Nigeria’s danger profile is bettering. Fitch upgraded Nigeria from B- to B (steady), recognising our dedication to orthodox insurance policies, together with FX reform, financial tightening, and ending deficit monetisation. Moody’s additionally raised its ranking from Caa1 to B3 in Might, citing improved fundamentals and a stronger outlook. And simply this November, S&P affirmed B-/B and revised its outlook to optimistic, underscoring sustained reform momentum, rising reserves, and enhanced macroeconomic resilience.”
As a result of success has many fathers, Cardoso, who was named African Banker’s Central Financial institution Governor of the 12 months 2025, should be on the lookout for house to put the award plaques he and the financial institution have acquired this 12 months.
So, is Cardoso in a celebratory temper? Has he and his colleagues placed on their dancing sneakers to rejoice? Properly, anybody who thinks that Cardoso and his workforce will put their ft up and exult in these successes will likely be lacking the purpose as a result of as a wag as soon as mentioned the reward for onerous work is extra work.
Success invitations adulation and in flip scrutiny. 2026 will likely be an vital 12 months for Cardoso and the apex financial institution he leads as a result of a brand new 12 months invitations a reset and agenda setting.
He instructed his viewers on the CIBN occasion that the agenda for 2026 is six-pronged: Strengthening the banking system, delivering sturdy value stability, Modernising funds and selling monetary inclusion, Fostering accountable fintech innovation, Constructing institutional capability and effectivity and Deepening partnerships and thought management.
Yemi Cardoso and his workforce have mentioned what they’ll do however will there be hurdles on their path?
First, financial insurance policies require convergence with the fiscal aspect of issues and are available 2026, the CBN might want to handle fallouts from what’s shaping as much as turn into a controversial tax act. Within the lead as much as the January 1, 2026, implementation date of the brand new tax regime, banks are reporting massive outflows of foreign exchange. It will likely be attention-grabbing to see the impression on our overseas reserves steadiness.
Secondly, elections are unusual beasts with a voracious urge for food for money. Yemi Cardoso, as CBN governor has been bullish on autonomy, orthodoxy and a cussed insistence on holding the methods and means spigot totally shut having ended a N22.7trn Methods and Means advance in 2024. Will he be capable of insist on that clear separation, in a way of talking, of city and robe or will he bow to stress because the politicking season begins and locations intense stress on the fiscal and financial sides of issues?
One other key concern to maintain in focus is safety and the way traders might understand the American air strikes and the Federal Governments renewed battle towards insurgency. Will there be extra and what impression will it have on safety and the economic system? Wale Edun, Minister of Finance and coordinating Minister of the Economic system has tried to calm verves together with his op-ed the place he famous that “removed from destabilising markets or weakening confidence, such actions strengthen the foundations of peace” as a result of “safety and financial stability are inseparable; each effort to safeguard Nigerians is, by definition, pro-growth and pro-investment.” The CBN should evolve a method for holding traders knowledgeable.
Lastly, the MPR and inflation. An over 50% % drop in inflation is trigger for cheer however the goal stays single digits. Cardoso has affirmed that “that’s our aim within the medium time period.”
The medium time period is quick dawning and followers; sceptics and critics will likely be ready to see how 2026 pans out.
*Kan is a PR/Disaster Administration professional and monetary analyst
