Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), recently disclosed that Nigeria’s balance of payments has been increasing rapidly, recording a surplus of USD 4.59 billion in Q3 2025, compared with a deficit of USD 2.77 billion earlier in the year.
Speaking at the 2026 Monetary Policy Forum in Abuja, Olayemi Cardoso further revealed that the reforms under the policy have given rise to positive economic outcomes. He commented, “Gross external reserves increased from USD 38.34 billion in February 2025 to USD 50.12 billion in February 2026, representing a 30.73% year‑on‑year increase, the highest level recorded in 13 years. Similarly, Net External Reserves have surged from USD 3.99 billion at the end of 2023 to USD 34.80 billion at the end of 2025, representing a 772.2% increase and higher than total gross reserves in 2023.”
“This improvement was reinforced by enhanced reserve‑management practices, integration of London Bullion Market Association (LBMA)‑certified gold into the national reserves, restructuring of the external asset management framework, and the initiation of a second global custodian to improve risk diversification. When our administration assumed office in September 2023, the macroeconomic environment was marked by pronounced distortions and significant imbalances, with the economy facing heightened vulnerability and elevated stability risks,” the senior official added.
Noting that headline inflation rose to 29.9% in January 2024, reflecting sustained food price pressures, exchange‑rate pass‑through, and structural supply constraints, Cardoso continued, “Excessive monetary financing had compromised policy integrity; Ways and Means advances had climbed to 26.95 trillion naira by May 2023, far beyond statutory thresholds, weakening the monetary‑fiscal interface and eroding credibility. The foreign exchange market was severely impaired, with over USD 7.0 billion in verified FX backlogs, constraining private‑sector operations and damaging external confidence.”
“Parallel market premium widened sharply to over 60%, and the exchange-rate architecture became increasingly fragmented. External reserves were under severe pressure, with net foreign reserves dropping to as low as USD 3.99 billion at the end of 2023, while Nigeria’s balance of payments position oscillated between deficits and instability. These conditions collectively undermined the transmission of monetary policy, weakened investor sentiment, and strained the credibility of the Central Bank at home and abroad,” he remarked.
The senior official also added that with a clear understanding of the challenges, the CBN has moved on a proactive basis to implement far‑reaching, bold but necessary reforms aimed at restoring credibility, normalising policy conduct, rebuilding confidence, and stabilising the macroeconomic environment.
“The first critical step was restoring monetary–fiscal discipline. Ways and Means financing was reined-in decisively, declining from 26.95 trillion naira to 3.51 trillion naira in December 2024 and further to 2.84 trillion naira by January 2026, marking one of the sharpest fiscal consolidations in recent history,” Cardoso added, informing the media that his institution’s policy actions restored compliance with the law and strengthened central bank independence. The moves also signalled the bank’s commitment to orthodoxy and transparency to markets, with a clear message that the era of fiscal dominance had ended.
“We complemented these actions with a firm but data-driven tightening cycle. Throughout 2024, the Monetary Policy Committee (MPC) maintained a restrictive stance to rein in inflation expectations by raising the policy rate cumulatively by 875 basis points from 18.75% in January 2024 to 27.50% in November 2024. While the Monetary Policy Rate (MPR) was kept at elevated levels for most of the year, improved inflation dynamics enabled the first policy rate cut in five years. A modest easing was carefully calibrated, with the policy rate reduced from 27.5 per cent to 27.0 per cent in September 2025, followed by a further cut to 26.5 per cent in February 2026,” he concluded.