Sustaining monetary reforms to accelerate investments

These reforms have led to significant stability in foreign exchange market and sustained growth in different sectors of the economy as reflected in the recent Gross Domestic Product growth for the fourth quarter of 2024 as announced by the National Bureau of Statistics (NBS).

Only recently, CBN partnered with J.P. Morgan, the Nigerian Exchange Group (NGX) and Africa Private Capital Association (AVCA) to host a high-profile global forum at Nasdaq MarketSite in New York.

The forum, titled “The Nigeria Investment Agenda: Pathways for Growth & Global Partnerships,” convened global investors, diaspora leaders, and senior financial stakeholders to examine Nigeria’s macroeconomic prospects and ongoing reform progress.

During his commanding address, Governor Olayemi Cardoso outlined his comprehensive reform strategy encompassing monetary tightening, foreign exchange market transparency, and enhanced financial governance.

He emphasized that these initiatives are establishing the foundation for sustainable macroeconomic stability and heralding a new era of transparency and confidence.

Governor Cardoso reaffirmed the CBN’s unwavering commitment to rebuilding credibility through orthodox monetary policy, transparency, and consistency. “We inherited a crisis of confidence but chose a different path. We’re not turning back,” he stated decisively.

In a remarkable fireside chat between the Governor and Nobel Prize-winning economist Dr. James Robinson, Reverend Richard L. Pearson Professor at the University of Chicago, Governor Cardoso elaborated on his vision to reestablish the CBN as a credible, trusted institution which is rooted in domestic excellence and respected internationally.

Also speaking, Mr. Muhammad Sani Abdullahi, Deputy Governor for Economic Policy at the CBN, delivered a macroeconomic update highlighting sharp increases in foreign exchange turnover, emerging signs of disinflation, and strengthening external reserves. “With a market-determined exchange rate and a transparent, rules-based policy framework, confidence is gradually being restored in Nigeria’s economy,” he noted.

Welcoming participants to the forum, Dr. Nkiru Balonwu, Adviser to the CBN Governor on Stakeholder Engagement and Strategic Communication, framed the forum as a key moment in the Bank’s broader engagement strategy.

 “Today is more than a conversation,” she noted. It’s about opening the books on the CBN’s transformation story under Governor Cardoso – sharing the facts, interrogating the progress, and looking ahead together at what more can be done to build sustainable partnerships and unlock long-term capital,” she explained.

Another key highlight of the event was the panel discussion entitled “Repricing Nigeria: Assessing the Scope for Sustained Change.” Moderated by Gavin Serkin, Founder of New Markets Media & Intelligence, the panel featured global financial luminaries: Joyce Chang, Chair of Global Research at JPMorgan Chase; Jason Rekate, Global Co-Head of Corporate Banking at Citi; Razia Khan, Chief Economist for Africa & Middle East at Standard Chartered; and Ahmad Zuaiter, Co-Founder & CIO of Jadara Capital Partners.

Each panelist provided expert perspectives on Nigeria’s investment landscape, noting renewed international interest driven by improved fundamentals, strengthened governance, and clearer policy direction.

The CBN Board and Monetary Policy Committee were represented by US-based diaspora members Mr. Robert Agbede, Prof. Melvin Ayogu, and Dr. Aloysius Ordu, underscoring the Bank’s global engagement and commitment to leveraging Nigerian talent worldwide. Temi Popoola, Group CEO of NGX, moderated the Q&A session, while Dr. Olubukola Akinniyi Akinwunmi, Director of Banking Supervision at CBN, delivered the closing remarks.

The forum focused on substantive discussions and future prospects: engaging critical voices, evaluating progress, and identifying requirements for building lasting partnerships and attracting long-term capital.

Central to this endeavour is a clear objective: reestablishing the CBN as a credible, trusted institution respected globally and dedicated to excellence at home.

Subsequently, Cardoso assured the global investment community that the apex bank will strengthen its processes so as to sustain gains from recent reforms, attract and boost investor confidence in the economy.

Speaking during a meeting of  the Nigerian government delegation led by the Minister of Finance and the Coordinating Minister of the Economy, Mr. Wale Edun and international investors on the sidelines of the just concluded  Spring Meetings of the IMF and World Bank in Washington DC, Cardoso stated that the “difficult reforms that have been undertaken have begun to bear fruit,” adding that  “the numbers speak for themselves”, indicating positive developments in the Nigerian economy.

He  highlighted the adoption of “orthodox monetary policy” as a crucial step  that the CBN had “absolutely no intention of compromising on”. He stressed that this approach has enabled the stabilisation of the macroeconomy, positioning Nigeria in a “much better place than it had to have been in the past”.

This progress, he said, is reflected in “recent upgrade of Nigeria’s rating by Fitch.

Acknowledging the current period of “heightened uncertainty”, Cardoso noted that Nigeria has been in a “period of crisis”. However, he expressed confidence in the “resilience and the capacity of people and institutions” to navigate future challenges. He also emphasised the continuous learning process, including gaining insights from interactions with individuals in different geographies.

A strategic focus of the CBN’s has been “building confidence and building trust”. This has been a “deliberate” effort, although not perfect, aimed at fostering greater confidence in the Nigerian currency and the country’s strategies.

Governor Cardoso reported seeing “a lot more interest in investing in Nigeria in the recent past” and is optimistic about future transformation if the current direction is maintained.

Addressing the need to diversify beyond oil revenues, Cardoso highlighted the significant progress made in the remittance space. Initial scepticism was overcome, with monthly remittances increasing from approximately “$200 million plus on a monthly basis” to a peak of around “$600 million by August.

This was achieved by “understanding where the bottlenecks were and we did everything to remove them and by closing the gap on different exchange rates,”

He added that “Engaging with the diaspora community through roadshows also yielded positive responses.

The CBN has also involved the banking system in these efforts, including targeted outreach to non-resident Nigerians,”

 The apex bank governor reassured that the impact of oil price fluctuations is manageable to a reasonable extent.

Looking at opportunities beyond remittances, Governor Cardoso stressed the importance of a “competitive Naira”. He described this as a “game changer” and a “great transformative tool” that has shifted how Foreign Direct Investors (FDIs) view Nigeria. He noted that investors are increasingly comfortable with the availability of a competitive currency, making business more attractive. The Governor believes that an “enabling environment” will naturally attract investments. He also mentioned a meeting with the coordinating minister and the President of the World Bank, where renewable energy was highlighted as a sector the World Bank intends to support significantly.

In terms of transparency, Governor Cardoso underscored the CBN’s commitment to transparency, stating, “it is very important that as a central bank, we walk the talk”. He cited the disclosure of net reserves as an example of delivering on their commitments, building confidence among investors.

He noted that the “small percentage of intervention from the central bank relative to the forex  market” is a positive sign, indicating a well-functioning and transparent market.

The introduction of the “B matching system” and a “Code of Ethics” were highlighted as measures to enhance market transparency and integrity. The Code of Ethics involved the leadership of banks signing up to principles aimed at preventing bad behaviour in the market.