The Central Bank of Nigeria (CBN) has introduced temporary restrictions on the payment of dividends and bonuses by a small group of banks as part of its broader strategy to strengthen the financial sector.
The measure, which targets institutions, which the CBN did not name, still recovering from the effects of the COVID-19 pandemic, is designed to reinforce their capital buffers and ensure long-term resilience.
This development was made public by the Acting Director of Corporate Communications at the CBN, Mrs. Hakama Sidi Ali, who explained that the decision is part of a broader reform framework initiated in 2023.
The reforms aim to position Nigeria’s banking sector as a solid foundation for the country’s long-term economic ambitions.
According to the CBN, many banks have already complied with, or are on track to meet, the updated financial requirements ahead of the March 31, 2026, deadline.
However, a few institutions, particularly those that received support from the apex bank during the pandemic, are still in the process of recovery and capital strengthening.
“These temporary measures are designed to support a smooth and sustainable path to compliance for banks that are yet to fully recover from recent macroeconomic challenges,” Ali stated.
“Restricting dividend and bonus payments ensures that these banks retain more capital to build resilience and remain viable contributors to Nigeria’s financial system.”
The central bank clarified that these actions are not an indication of systemic instability but rather standard regulatory practice adopted globally to assist financial institutions through post-crisis periods.
The restrictions are expected to help the affected banks improve their capital adequacy ratios by reinvesting retained earnings into their core operations.
In recent years, Nigerian banks have operated under a regulatory framework that is considered more stringent than many international norms.
The CBN’s latest move, while temporary, aligns with best practices in risk-based supervision and financial sector reform, and is expected to strengthen institutional governance and ensure that banks are adequately capitalised for current and future economic demands.
SmAli said the CBN has already communicated the new rules directly to the affected institutions and is maintaining a close working relationship with them to ensure smooth implementation.
These banks are expected to comply with the directives while continuing their normal banking activities without disruptions to customers.
To foster transparency and cooperation, the CBN said it will continue to engage with industry stakeholders through meetings and other channels.
The aim is to ensure that banks remain informed and that the reform process benefits from broad industry input.
The House of Representatives Committees on Public Account and Public Assets have summoned the Minister of Finance, Wale Edun and Governor of the Central Bank, Olayemi Cardoso to appear before them over allegations of noncompliance with the Fiscal Responsibility Act.
The two senior government officials are billed to also respond to internal control weaknesses in the various Ministries, Department and Agencies of government identified in the 2021 reports by the Auditor General for the Federation.
In a letter signed jointly by the Chairmen, House Committee on Public Accounts, Bamidele Salam and his counterpart in Public Assets, Ademorin Kuye, the committees asked the Finance Minister and CBN Governor to provide details on remittance of operating surplus to the Federation Account by the apex bank in line with the provisions of relevant laws and regulations.
In their reports submitted to the National Assembly, the Fiscal Responsibility Commission and the Auditor General for the Federation alleged that several Ministries, Departments and Agencies of Federal Government, including the CBN had failed to remit or under remitted their operating surpluses as required by extant financial laws and regulations in the last six years.
According to the Public Accounts Committee Chairman, “these violations have negatively impacted the liquidity of the federal government and constitute a hindrance to effective implementation of the budgets passed by parliament.”
The committees said ample opportunity had been given to the Finance Ministry and the apex bank to reconcile their accounts and present their positions in order to determine the degree of financial liabilities involved, hence the need for a final hearing to resolve the issues.
The committee is equally looking at a report in the Auditor General for the Federation statutory report which suggests that a number of public assets which had been fully paid for have not been completed and put into use for many years.
“Some of these projects in Dutse, Abeokuta and other locations were awarded between 2011 and 2016 but yet to be completed according to audit reports”
The Central Bank of Nigeria (CBN) has debunked claims suggesting it has extended the deadline for the recapitalisation of Bureau De Change (BDC) operators to December 31, 2025.
The apex bank said the official deadline remains June 3, 2025, as previously announced.
A statement issued yesterday by the Acting Director of the Corporate Communications Department, Mrs. Hakama Sidi Ali, described the circulating report as false and misleading, urging members of the public to disregard it.
She advised the public, journalists, media organisations, and other stakeholders to rely only on official CBN sources—including the Bank’s website and verified communication channels—for accurate information regarding its regulatory policies and directives.
“There has been no extension of the recapitalisation deadline for BDC operators beyond June 3, 2025,” she said.
The recapitalisation programme is part of the regulatory measures introduced by the CBN in February 2024, which seek to strengthen the operations of BDCs in Nigeria’s foreign exchange market. Under the revised guidelines, Tier-1 BDCs are expected to meet a minimum capital requirement of N2 billion, while Tier-2 operators must raise at least N500 million.
The CBN said it will continue to maintain open communication with stakeholders in the financial sector and remains committed to promoting transparency, ensuring compliance, and safeguarding the integrity of the foreign exchange market.
The recapitalisation framework is one of several regulatory initiatives aimed at repositioning the foreign exchange ecosystem for greater efficiency and accountability. It also aligns with broader efforts by the CBN to stabilise the naira and attract confidence in the formal FX market.
Stakeholders in the BDC sector are expected to comply with the capital requirements within the stipulated timeframe or risk losing their operating licences.
The Central Bank of Nigeria (CBN) has debunked claims suggesting it has extended the deadline for the recapitalisation of Bureau De Change (BDC) operators to December 31, 2025.
The apex bank said the official deadline remains June 3, 2025, as previously announced.
A statement issued on Wednesday by the Acting Director of the Corporate Communications Department, Mrs. Hakama Sidi Ali, described the circulating report as false and misleading, urging members of the public to disregard it.
She advised the public, journalists, media organisations, and other stakeholders to rely only on official CBN sources—including the Bank’s website and verified communication channels—for accurate information regarding its regulatory policies and directives.
“There has been no extension of the recapitalisation deadline for BDC operators beyond June 3, 2025,” she said.
The recapitalisation programme is part of the regulatory measures introduced by the CBN in February 2024, which seek to strengthen the operations of BDCs in Nigeria’s foreign exchange market. Under the revised guidelines, Tier-1 BDCs are expected to meet a minimum capital requirement of ₦2 billion, while Tier-2 operators must raise at least ₦500 million.
The CBN said it will continue to maintain open communication with stakeholders in the financial sector and remains committed to promoting transparency, ensuring compliance, and safeguarding the integrity of the foreign exchange market.
The recapitalisation framework is one of several regulatory initiatives aimed at repositioning the foreign exchange ecosystem for greater efficiency and accountability. It also aligns with broader efforts by the CBN to stabilise the naira and attract confidence in the formal FX market.
Stakeholders in the BDC sector are expected to comply with the capital requirements within the stipulated timeframe or risk losing their operating licences.
We do have good leaders, we just do not follow. Nigeria’s former, Chief Justice of Nigeria, CJN, Mohammed Uwais dies at 88, appreciated supervising and delivering a good Electoral Reform Report in 2008, disgracefully still not fully implemented. May he RIPP.
Foreign reserves rise to $38.32b. This is good especially after settling the International Monetary Fund (IMF) and settling past Central Bank of Nigeria (CBN) mismanagement and debt to airlines and other forex debts and then properly doing the CBN’s duty of receiving forex inflows and promptly paying legitimate and approved forex demands. The foreign reserves target for the CBN, and the government should be $50b minimum. This should be government’s minimum target in order to defend and improve our naira, supposed to be our national pride.
Our political class should be informed that, for our population size, we actually need $200b foreign reserves as our gold standard to protect the economy. Nigeria needs a compulsory percentage of forex earnings saving scheme to achieve this. Or we can make ‘foreign reserves’ the 38th state of Nigeria and allocate monthly to it like other states.
We must commend the CBN for fighting-the-good-fight with Nigeria’s greed and corruption-driven protected powerful forex cartels fighting back to preserve and grow their hugely expensive ‘forex middleman status’ which precipitated economically destructive black-market rates.
In the old days, it was the forex cartels crashing the naira to horrendous black market rates, destroying the value of the naira – financial terrorism. After the forex cartels repeatedly and greedily increased the black market, or parallel market rate margin, the CBN too kept crashing the naira towards the black market rate which continued to fall until the CBN almost eliminated the difference. We have all suffered for the callousness of the forex cartels as they destabilised our lives with the devaluation of our incomes, pensions, rents and purchasing power all spreading poverty. Fortunately, this tactic of CBN ensured financial ruin also for forex cartels which have suffered more as their self-created criminal enterprise, collapsed from billions being extracted from Nigerians daily to almost zero.
Nigerians may not know but Nigeria’s corruption has created several layers of ‘banking fraud’ which increase the cost of the naira and foreign exchange that exist in no other country. There is no black market in most other countries. The currency is the currency in most countries. In Nigeria, our bankers weaponised new notes under their control, withdrew the mint fresh notes from paying out by the bank teller over the banking counter, hoarded the new notes, made them scarce and then criminally created an army of usually young ladies specifically to carry out a financial crime of selling new naira notes. To this we must add the past criminal allocation of forex at CBN and through banks in exchange for financial reward-another layer of financial fraud.
The government is at a crossroads. It has billions of weakened naira pouring in from the ‘subsidy withdrawal’ and other dollar incomes like international remittances. If the CBN manages to improve the value of the naira, that naira amount will reduce funds going to the federal and states and LGAs. Nigeria’s local debts in pensions and to contractors are in naira. It does not matter the value to the dollar on that day of payment. So, the dilemma at CBN is: having defeated the forex cartels, will they stay dead or are they just dormant, biding their time only to resurrect when the CBN tries to improve value of the naira?
In addition, will the political machinery in Nigeria, so full of multibillions EFCC revealed corruption and ‘cash and carry’ mentality allow the naira to improve? Can they cope with their dollars hoarded abroad being worth less naira in future? A strengthening of the naira is imperative for Nigeria’s dignity. Your country is currency! The fear is that whatever improvements are made, will they be abandoned when the pendulum of political power swings elsewhere, as usually happens in Nigeria. Why should CBN and government and Nigeria rebuild the treasury, forex reserves and naira value only for it all to be officially looted in an immediate subsequent regime?
From a German immigrant descendant president, the US ban on Harvard international students may be interpreted as pathological jealousy of Obama’s Harvard success, just as he craves a Nobel Prize – already won by Obama. Or is he just a failed university owner enacting the BHB-Bring Him Down vengeance-is-mine syndrome. The US has also introduced a 3.5% charge on international remittances to non-US citizens. This double taxation will marginally reduce the value of US-Nigeria remittances. Could the long-predicted very public breakup in the ‘Muskmania Matter’ be extreme playacting, an Oscar winning ‘media deception performance’ ‘let’s pretend to fight and separate’ photo trick?
The Mokwa flood disaster death toll rose to 230 dead, 500 missing. Is aid being delivered to all the needy in a speedy and sympathetic manner? These people are not beggars, but victims. We are disgusted with disaster relief in the past and insist that accountability and monitoring bring transparency. It is a huge task to cater for the immediate, mid- and long-term needs from daily meals, shelter, rebuilding homes and infrastructure. Qualified distressed citizens must be included in their own recovery and care so as to inject funds back into their pockets and give them a sense of dignity, not just handouts.
There will be many criminals stealing aid packages. This is why using affected citizens important.
The Police and the Central Bank of Nigeria (CBN) are among government agencies, top individuals, embassies, and other categories of people and institutions that risk losing their Certificates of Occupancy (CofOs) next week due to default in payment of Federal Capital Territory (FCT) ground rent.
The number of plots of land involved is 3,383, according to a public notice published yesterday in this newspaper by the Federal Capital Territory Administration (FCTA).
Last week, the FCTA moved to seal-off the buildings in default, including the Wadata Plaza headquarters of the Peoples Democratic Party (PDP), but President Bola Ahmed Tinubu intervened and granted a 14 days moratorium.
The ground rent default covers a period between 2014 and 2024
The affected properties are primarily in high-brow areas, of Central Area Garki I and II, Asokoro, Maitama, Wuse I and Wuse II and Guzape.
Some of the defaulters are key ministries, diplomatic missions, banks, religious organisations, private firms and prominent individuals.
Among the government agencies are: Nigerian Navy, Federal Ministry of Agriculture and Rural Development, Debt Management Office (DMO), Federal High Court (FHC) and National Industrial Court (NIC).
Others are liaison offices of states such as Kwara, Benue, Osun, Zamfara, Katsina, Imo, and Enugu.
The foreign embassies include: South Africa, Thailand, Saudi Arabia, Brazil, Kuwait, Zimbabwe, Canada, India, Ethiopia, Sudan, Mauritania, Indonesia, Venezuela, and North Korea.
The defaulters in the private sector are: Huawei Technologies Nigeria Ltd; UACN Property Development Company Plc; First City Monument Bank (FCMB) Plc.; Union Bank of Nigeria Plc.; Standard Construction Ltd; Baram Nigeria Ltd and Elbe Pharma Ltd.
Also on the list is Heritage Press Limited, situated at Central Area and Abuja Investment & Property Development Company Ltd, an agency of the Federal Capital Territory (FCT) ministry.
The religious bodies owing ground rent include: Catholic Archdiocese of Abuja; the Eternal Sacred Order of Cherubim and Seraphim Church; Abuja National Mosque Council; Ahmadiyya Muslim Jamaat Nigeria and Jama’atu Nasril Islam (JNI).
Notable among the individual defaulters, including a former FCT Minister Aisha Alhassan; Mathew Nwagwu; Alexander Okafor, Gladys Ibanga and Jimoh Oyedele Ibrahim.
The real estate and investment firms are Neo-Vista Property Development Ltd, TRCC Nigeria Ltd, Vibrant Insurance Brokers and Next International Nigeria Ltd.
The FCTA reminded the defaulters that annual ground rent payments are mandatory under the terms of their Rights of Occupancy (RofOs) and CofOs and must be paid in advance starting from January 1 each year.
The notice reads: “All allottees and property owners who have not paid ground rent up to 2024 are hereby given fourteen (14) days from the date of this publication to settle their arrears.
“Failure to comply will result in revocation or withdrawal of affected land titles. Payments are to be made via the Remita e-payment platform, directed to the account of the “FCT Department of Land Administration.
“Property owners are advised to visit https://remita.net, select ‘Pay TSA & States,’ then ‘Federal Capital Territory Admin,’ followed by ‘FCT Department of Land Administration,’ and finally ‘FCC Ground Rent.”
With the seven days to the end of the 14-day ultimatum given through the President, allottees are rushing to pay their Ground Rent.
Our correspondent who visited the Department of Land Administration at the FCTA confirmed how property owners have been rushing to pay through the official remita.
A source at the FCTA told The Nation that “many affected property owners have complied while payment is ongoing.”
The Court of Appeal in Abuja has dismissed an appeal filed by the Central Bank of Nigeria (CBN) to block the payment of N63.7 million and $10,000 awarded against the Federal Government in favour of a German, Martin Gegenheimer.
The sums were awarded against the apex bank over the German’s unlawful arrest and detention by men of the Nigerian Immigration Service (NIS).
A three-member panel of the appellate court held, in a unanimous judgment on May 23, that the appeal by the CBN was devoid of any scintilla of merit.
In the lead judgment, Justice Hamman Barka resolved the two issues identified for determination against the CBN in favour of Gegenheimer, the first respondent.
The Appeal Court affirmed the February 22, 2024 ruling by Justice Inyang Ekwo of the Federal High Court, Abuja, ordering the CBN to pay Gegenheimer the N63.7 million and $10,000 awarded against the Nigerian government in a 2021 judgment by the Court of Justice of the Economic Community of West African States (ECOWAS).
The gross FX reserves have recorded significant growth in recent weeks. Specifically, the nation’s external reserves stood at approximately $38.9 billion, a level the Central Bank of Nigeria (CBN) notes is sufficient to cover 7.6 months of imports for goods and service. This follows strong measures instituted by the apex bank to attract more inflows to the economy and support naira stability, writes Ibrahim Apekhade Yusuf
The economy has witnessed increased dollar inflows in recent months. This is because the Central Bank of Nigeria (CBN) is cultivating multiple FX sources to increase dollar inflows, boost dollar access to manufacturers and retail end users.
From moves to improve diaspora remittances through new product development, the granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller FX model, and enabling timely access to naira liquidity for IMTOs, the apex bank has simplified dollar-inflow channels for authorised dealers and other players in the value chain.
The move has led to substantial accretion to the gross FX reserves and supported the stability of the naira. For instance, the gross FX reserves increased for the second consecutive week, growing $38.9 billion as at May 16. The current reserves position could provide over seven months of import cover and support the country’s drive for a stronger economy.
Given that FX inflows to the economy are strategic in achieving monetary and fiscal policy stability, the CBN under its Governor, Olayemi Cardoso puts in a lot of effort in attracting more inflows into the economy.
Diaspora remittances to Nigeria, estimated at $23 billion annually remain a reliable source of forex to the domestic economy. There are also other sources and policies that are being explored by the apex bank to keep dollar inflows coming.
The CBN’s initiatives have supported continued growth in these inflows, aligning with the institution’s objective of doubling formal remittance receipts within a year.
The remittances in the economy is expected to increase based on CBN’s ongoing efforts to bolster public confidence in the foreign exchange market, strengthen a robust and inclusive banking system, and promote price stability, which is essential for sustained economic growth.
Director of Trading at Verto, Charlie Bird, said dollar liquidity dynamic is now more balanced, with foreign investors and airlines able to repatriate funds.
Speaking during Cordros Asset Management seminar titled: “The Naira Playbook”, he said Nigeria is now darling of foreign investors because of improved dollar liquidity in the economy due to positive CBN’s reforms.
For instance, Cardoso recently announced the introduction of two new financial products designed to serve Nigerians living abroad and attract more diaspora remittances.
These and other measures, including the granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller model, and enabling timely access to naira liquidity for International Money Transfer Operators (IMTOs).
X-raying revised IMTO guidelines
The CBN recently released the reviewed guidelines of International Money Transfer Services in Nigeria. These Guidelines mark a significant shift in how IMTOS conduct their operations, reflecting the CBN’s ongoing efforts to enhance transparency and efficiency in foreign exchange transactions and to bolster diaspora remittances into Nigeria.
Further circular titled “New Measures to Enhance Local Currency Liquidity for Settlement of Diaspora Remittances” highlighted the apex bank’s commitment to improving the Nigerian foreign exchange market infrastructure by increasing the flow of remittances through formal channels.
It introduces measures aimed at providing licensed IMTOs with access to Naira liquidity from the CBN, facilitating the disbursement of remittances to beneficiaries.
In a report analysing the circular, analysts at Duale, Ovia & Alex-Adedipe, a specialised law firm with leading experts in its core areas of practice, explained that the guidelines permit IMTOs to conduct payout foreign remittances through agents, who are designated as Authorised Dealer Banks (ADBs).
They require IMTOs to enter into formal contracts with ADBs outlining the terms and conditions of their engagement. Additionally, IMTOs are required to notify the CBN of the appointment of each ADB.
Furthermore, IMTOs are to receive foreign remittances in a designated account maintained with ADBs.
They explained that the account must be separate from other accounts held by the IMTO. The guideline mandates ADBs and IMTOs to disburse proceeds of foreign remittances to beneficiaries in Naira.
According to them, payments can be made either through a bank account with the ADB or in cash, provided the cash withdrawal does not exceed $200. If a beneficiary does not have an account with the IMTO’s ADB, the ADB will credit the beneficiary’s account with another bank. Notably, under the Guidelines, IMTOs are prohibited from purchasing foreign exchange from the domestic market to settle funds for their customers.
The major significance of the circular is the introduction of measures to enhance the access of IMTOS to Naira liquidity, thereby facilitating the timely settlement of diaspora remittances.
Here, eligible IMTOs can now directly access the CBN window or use their ADB to execute transactions involving the sale of foreign exchange in the Nigerian market.
This enables IMTOs to purchase Naira directly from the CBN or through their ADBs for settling remittances, thereby improving local currency liquidity. This contrasts with what was obtainable under the Guidelines as emphasised above.
To ensure effective implementation of the Circular and to promote transparency and accountability in the Nigerian foreign exchange market, the CBN established that transactions executed and confirmed before noon on a trading day are eligible for same-day settlement. This aims to expedite the process for all participants, including remittance beneficiaries.
The apex bank also directed that foreign exchange will be converted at the prevailing Nigerian Autonomous Foreign Exchange Market (NAFEM) rates, as referenced by a recognized market benchmark.
Also, IMTOS and ADBs must submit daily regulatory returns to the CBN, detailing all relevant information on the sources of funds while eligible IMTOs must confirm their ADBs and provide standard settlement instructions to ensure smooth implementation of the new measures.
Analysts said the circular remains a significant advancement in ensuring foreign exchange liquidity in Nigeria.
By granting IMTOs direct access to obtain Naira through the CBN window or through ADBs and implementing strict regulatory and reporting requirements, the CBN aims to enhance the efficiency and operations of IMTOs in the Nigerian market. These measures will streamline remittance flows, ensuring that funds move swiftly and securely through official channels.
As part of its efforts to boost diaspora remittances and support naira stability, the CBN recently announced the introduction of two new financial products designed to serve Nigerians living abroad.
The Non-Resident Nigerian Ordinary Account and the Non-Resident Nigerian Investment Account was created to streamline remittances, encourage investments, and foster financial inclusion among Nigerians in the diaspora.
It said, “The Central Bank of Nigeria is pleased to inform the general public of the introduction of the Non-Resident Nigerian Ordinary Account and Non-Resident Nigerian Investment Account targeted at Nigerians in diaspora.”
The initiative is also expected to provide a secure and efficient platform for managing funds and investing in Nigeria’s financial markets.
Since the beginning of this year, eligible NRNs have continued to get the opportunity to own any of the Non-resident Nigerian accounts.
The Non-Resident Nigerian Ordinary Account was designed to facilitate remittances by allowing non-resident Nigerians to remit foreign earnings into Nigeria and manage funds in foreign currency or naira.
Deposits from sources such as salaries, allowances, and dividends are supported, alongside spending on family maintenance, education, and healthcare.
On the other hand, the Non-Resident Nigerian Investment Account provides an opportunity for NRNs to invest in Nigeria’s financial markets, including foreign currency-denominated bonds, fixed deposits, and local assets like equities, government securities, and mortgage products.
The CBN explained that both accounts offer currency flexibility, enabling holders to maintain balances in either foreign currency or naira.
Account holders will also be able to convert funds between the two currencies at prevailing exchange rates through authorised dealers.
The Non-Resident Nigerian Investment Account, in particular, was structured to promote investments in Nigeria’s financial instruments, such as the Diaspora Bond, and encourage active participation in the country’s economic development.
The CBN said the introduction of these accounts will harness the economic potential of Nigerians in the diaspora by boosting remittances and fostering investments in critical sectors.
These and other measures, including the granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller model, and enabling timely access to naira liquidity for International Money Transfer Operators (IMTOs).
President, Association of Bureaux De Change Operators of Nigeria, Dr. Aminu Gwadabe, explained that diaspora remittances are a crucial source of foreign exchange for Nigeria, supplementing both foreign direct investment and portfolio investments.
CBN’s initiatives have supported continued growth in these inflows, aligning with the institution’s objective of doubling formal remittance receipts within a year.
Gwadabe remittances in the economy is expected to increase based on CBN’s ongoing efforts to bolster public confidence in the foreign exchange market, strengthen a robust and inclusive banking system, and promote price stability, which is essential for sustained economic growth.
In a report: “Diaspora remittances: The power behind Africa’s sustainable growth”, Regional Vice President of Africa at Western Union, Mohamed Touhami el Ouazzani, said remittances may be measured through the movement of money, but their real impact is measured in lives changed.
He disclosed that in 2023 alone, $90 billion flowed into Africa from its global diaspora, an amount that rivals the Gross Domestic Product of entire nations.
He said that remittances symbolize deep ties that keep communities connected across borders. “Families with a breadwinner working abroad depend on these funds to provide vital support for day-to-day needs. They also build the foundation for broader financial stability,” he said.
“Beyond their immediate impact, remittances are powerful drivers of economic change. They fuel infrastructure development, spur entrepreneurship, and promote financial inclusion – all essential for long-term economic development. Ghana’s National Financial Inclusion and Development Strategy (NFIDS) is simplifying access to remittances, while countries like Kenya, Ethiopia and Nigeria are tapping into diaspora bonds to fund infrastructure and other national projects,” he added.
For remittances to be truly transformational, it begins with understanding and meeting people’s aspirations. Ensuring individuals who strive for more can send and receive funds, regardless of their financial status, is crucial. We must cater to diverse needs.
“In a continent renowned for its entrepreneurial spirit, offering multiple channels for remittance access is key. Whether through bank accounts, digital wallets, mobile money apps, or cash pickups, this flexibility ensures that funds are delivered in ways that best suit local realities. Providing innovative and inclusive solutions empowers individuals to not only manage their immediate needs but also to invest in long-term growth opportunities,” he added.
In the unending battle of economic stability, with both promising growth and persistent challenges, the Central Bank of Nigeria (CBN) has made a pivotal decision by retaining the Monetary Policy Rate (MPR) at 27.50 percent. This announcement, made during the Monetary Policy Committee’s (MPC) 300th meeting, signifies a continued commitment to stabilising the Nigerian economy. By holding the MPR steady for the second consecutive time in 2025, the MPC’s unified approach reflects an in-depth analysis of recent economic indicators and the overarching inflationary pressures that continue to loom.
The decision to maintain the MPR at 27.50 percent comes amid a backdrop of mixed macroeconomic signals. Key highlights from the MPC’s meeting reaffirm the bank’s intention to focus on economic stability. The committee also retained the asymmetrical corridor at +500/-100 basis points around the MPR, along with the cash reserve ratio (CRR) at 50 percent for Deposit Money Banks and 16 percent for Merchant Banks. The liquidity ratio remains at 30 percent, demonstrating a cautious stance in managing liquidity within the financial system.
Several factors played a crucial role in guiding the MPC’s decision. Among these was a notable improvement in macroeconomic indicators. The committee observed a narrowing gap between the Nigeria Foreign Exchange Market (NFEM) and Bureau De Change (BDC) windows, a phenomenon that signifies harmonisation within the foreign exchange market. A positive balance of payments position and the recently declining prices of Premium Motor Spirit (PMS) emerged as critical developments supportive of economic health.
Food inflation has been a significant concern, which showed signs of moderation. The committee announced a decline in food inflation to 21.26 percent in April 2025, down from 21.79 percent in the previous period. Core inflation further decreased to 23.39 percent from 24.43 percent, indicating a potential easing of price pressures. The MPC highlighted these developments as encouraging signs of economic resilience, countering fears of unchecked inflation.
Another development was the growth of real Gross Domestic Product (GDP), which expanded by 3.84 percent in the fourth quarter of 2024. This growth was driven by both oil and non-oil sectors, with particular emphasis on the services sector, which has increasingly become a cornerstone of Nigeria’s economic advancement. Coupled with a rise in gross external reserves, which increased by 2.85 percent to $38.90 billion as of May 16, 2025, this economic growth narrative paints a picture of cautious optimism for stakeholders and investors.
Despite these positive indicators, the MPC expressed its concerns regarding several underlying challenges that could threaten the economy’s stability. Among these concerns is the persistence of inflationary pressures, driven by high electricity prices and continued foreign exchange demand pressure. Other legacy structural factors within the economy still cast shadows over its potential for growth, showing that while progress has been made, significant hurdles remain.
The decline in crude oil prices also represents a significant concern. Increased production from non-OPEC member countries and uncertainties surrounding US trade policy present new challenges for Nigeria’s fiscal health. As oil remains a critical driver of the Nigerian economy, fluctuations in global prices can reverberate loudly through fiscal receipts and budget implementation, complicating the CBN’s monetary policy framework.
The implications of the decision to retain the MPR at 27.50 percent are far-reaching. From a positive perspective, maintaining the current policy rate will inject confidence within the foreign exchange market. With a narrowing gap between the NFEM and BDC windows, market actors may find a renewed sense of optimism that encourages investment and fosters economic growth. This stability can provide a buffer against external shocks and is vital for sustaining consumer confidence during uncertain times.
On the flip side, the lingering inflationary pressures and the potential for declining crude oil prices could inhibit revenue streams and complicate budgetary execution for the Nigerian government. Fiscal revenues, heavily reliant on oil exports, may face additional strains, which could necessitate revisions in fiscal policy to accommodate lower-than-expected revenue inflows. The CBN must navigate these complexities deftly to ensure that economic growth remains on track.
As the CBN adopts a cautious approach to monetary policy amid these oscillating conditions, its strategy remains focused on anchoring inflation expectations and alleviating exchange rate pressures. The MPC’s optimism regarding the near-term economic outlook is tempered by an acute awareness of the risks that continue to loom. The committee recognises that sustaining economic growth will require vigilant monitoring and proactive responses to emerging challenges.
Looking ahead, the CBN’s commitment to implementing sound monetary policy will be crucial in maintaining the delicate balance between growth and inflation. Policymakers must remain agile and responsive to changing economic conditions while reinforcing measures to support market confidence. Transparent communication with the public and market stakeholders will also be essential in fostering trust and stability within the economic landscape.
The road ahead is undoubtedly fraught with complexities, but the MPC’s decision to maintain the MPR at 27.50 percent underscores a resolve to confront these challenges head-on. As the Nigerian economy continues to navigate these currents, the role of the CBN as a stabilising force will be paramount in shaping the future of Nigeria’s economic trajectory. The path toward a robust and resilient economy requires not only strategic monetary policy but also collaborative efforts across all sectors to ensure that growth is inclusive and sustainable.
The CBN’s steadfastness in its monetary policy approach reflects a broader understanding of the interconnectedness of economic variables. Stakeholders can take solace in the MPC’s careful deliberations, even as they remain vigilant about the ongoing risks. By prioritising economic stability and growth, the CBN sets the stage for a more promising future for Nigeria.
The Liquidity Ratio remains at 30 per cent, and the Asymmetric Corridor was held at +500/-100 basis points around the MPR.
The News Agency of Nigeria (NAN) reports that since February 2024, the MPC under Cardoso had raised the MPR from 18.5 per cent to 27.5 per cent before opting to pause rate hikes with this latest decision.
