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Tag: Central Bank of Nigeria (CBN)

  • Assessing factors driving $51b external reserves target, shaping naira

    Assessing factors driving $51b external reserves target, shaping naira

    Nigeria’s external reserve position is a key indicator of the country’s ability to defend the naira and meet its external obligations. Analysts estimates that at $46 billion, Nigeria’s external reserves presently cover over 12 months imports and could hit $51.04 billion by year end. Factors driving reserves build-up include improved FX inflows, higher oil receipts, increased remittances through official channels and renewed interest from foreign portfolio investors following FX market reforms instituted by the Olayemi Cardoso-led Central Bank of Nigeria (CBN). Overall, strong reserves position will continue to bolster exchange rate and promote financial sector stability, reports Assistant Editor COLLINS NWEZE

    Nigeria’s external reserves have crossed the $46 billion mark for the first time in about eight years, highlighting the steady growth the reserve has been recording since 2025. According to the latest data from the Central Bank of Nigeria (CBN), the country’s external reserve has increased by about $510 million in 22 days, moving from $45.502 billion on December 31, 2025, to $46.012 billion on January 22, 2026.

    Other industry data shows that Nigeria’s external reserves were last at this level on August 27, 2018, when it stood at $45.9 billion. The reserve build-up signals stronger buffers for import cover and currency stability, reflecting steady inflows and improved foreign exchange management since the forex reforms began, as the country prepares for a general election.

    The CBN data also suggests a notable turnaround from the volatility experienced during the early phase of the new forex regime, with the reserves closing at about $45.5 billion in 2025, having opened the year at roughly $40.8 billion.

    Analysts have expressed optimism that the steady growth of Nigeria’s external reserve for several months will be sustained this year. They said that the various reforms by the government have brought stability and confidence, thereby causing improvement in the country’s external reserves. They, however, noted that while the reserves can be sustained in the short term, sustaining the momentum throughout the election year will depend on discipline on the part of the government.

    Things looking up for naira

    The naira, which currently exchanges at N1,421  to dollar at the official market, exchanges at N1,490 to dollar at the parallel market. President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said the  naira has remained stable across market for several months, ending years of volatility in the market.

    Additionally, Managing Director of Financial Derivatives Company (FDC), Bismarck Rewane, estimated the fair value of the naira at about N1,257 to the US dollar. Rewane posits that the local currency is undervalued by approximately 11 per cent when assessed using the purchasing power parity (PPP) model. Rewane made the submission during his keynote address at the 2026 Economic Outlook organised by the Association of Corporate Treasurers of Nigeria (ACTN), where he anchored the session and offered a detailed analysis of the structural and cyclical factors influencing Nigeria’s exchange-rate movements.

    He noted that currencies typically converge towards their PPP-implied values over a five-year horizon. According to him, the appropriate exchange rate based on current PPP estimates stands at N1,256.79 to the dollar, reinforcing the view that the naira remains below its fair valuation level.

    What stakeholders are saying

    The founder/Chief Executive Officer of the Centre for the Promotion of Public Enterprise (CPPE), Dr Muda Yusuf, hinted at a positive outlook for Nigeria’s external reserves as he does not see anything derailing the forex and fiscal reforms that have brought about stability and improvement in external reserves. Yusuf said, ‘’Well, the outlook for me is positive because I don’t see anything derailing these reforms (forex reform, fuel subsidy etc.). It is these reforms that have brought about stability. And it’s this stability that has inspired confidence. It is the confidence that has allowed the improvement in the reserves. The reserves are not so much coming from oil, though. I don’t have the full breakdown. But my sense is that the reserves are coming from largely outside the oil – FDI, portfolio, diaspora flows, non-oil exports etc. Quite a lot is happening outside traditional sources of forex.

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    ‘’So, those things are anchored on reforms. For as long as that is happening and I don’t see that changing, even with the so-called election year or whatever, I don’t see anything changing that in any drastic way.’’

    Other analysts said the growth in the external reserves can only be sustained in 2026 if the Central Bank of Nigeria (CBN) avoids excessive FX intervention, fiscal authorities are restrained from spending pressures and the FX reforms are not reversed. They said, ‘’Historically, election cycles in Nigeria tend to introduce policy uncertainty, FX demand pressure, and capital flow reversals. So, while reserves can be sustained in the short term, maintaining this momentum throughout an election year will depend on discipline.

    Future of external reserves

    The CBN had, in its 2026 Macroeconomic Outlook for Nigeria, projected that Nigeria’s external reserve would rise to $51.04 billion in 2026, supported by stronger oil earnings, foreign exchange (FX) market reforms, and improved external inflows. The apex bank said the outlook reflects higher oil revenues, increased bond issuance, sustained diaspora remittances, FX market reforms, and expanded domestic refining capacity. The CBN stated, “The external reserves is projected at US$51.04 billion in 2026, compared with US$45.01 billion in 2025. The external reserves is expected to be boosted by reduced pressure in the FX market based on the anticipated rise in oil earnings, sovereign bond issuance, and diaspora remittance inflow.’’

    The apex bank linked the positive external reserve outlook to expanded domestic refining, notably the Dangote Refinery’s planned capacity increase to 700,000 bpd in 2025 and a longer-term target of 1.4 million bpd. According to the CBN, increased local refining would reduce Nigeria’s dependence on imported petroleum products, lowering demand for foreign exchange and easing pressure on external reserves.

    The reforms payoff continues

    The FX reforms, instituted by the Olayemi Cardoso-led CBN, new policies instituted by the Federal Government to boost local production, reduce forex demand pressure, and lessen domestic prices have been instrumental to macroeconomic stability. The expectations are that the apex bank sustains the forex reforms while the fiscal authority strengthens efforts at enhancing FX earnings, especially from gas, oil and non-oil exports.

    CBN Governor explained that the rise in foreign reserve marked a significant rebound in Nigeria’s foreign currency buffers amid ongoing efforts to stabilise the exchange rate and rebuild investor confidence. The reserves spike happened despite relatively stronger CBN market intervention this year and external debt servicing as well as weak oil receipts.  Looking ahead, the analysts expect robust FX liquidity from both foreign and local sources, driven by strong market confidence, to continue supporting naira stability in the near term. They also expect headline inflation to ease further in July, supported by a moderation in both food and core inflation components.

    “Specifically, we anticipate the slowdown in food prices to be supported by improved market supply from early green harvests and the relative stability of the naira, which is expected to reduce pressure on imported food prices. Similarly, core inflation is projected to remain broadly stable, supported by a reduced exchange rate pass-through effect and steady energy prices,” they said.

    Multiple FX sources activated

    The CBN under Cardoso 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. Given that FX inflows to the economy are strategic in achieving monetary and fiscal policy stability, the CBN under Cardoso puts in a lot of efforts 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.

    As naira stabilises, import costs to dip

    Import costs have been tipped to drop significantly as the naira continues to gain more ground across markets. Importation costs in Nigeria include various taxes and charges, primarily import duties, VAT, and other levies. These costs are calculated based on the CIF value (Cost, Insurance, and Freight) of the goods, which includes the cost of the goods, insurance, and shipping.

    The cost, insurance and freight (CIF) price is the price of a good delivered at the frontier of the importing country, or the price of a service delivered to a resident before the payment of any import duties or other taxes on imports or trade and transport margins within the country. Changes in exchange rate can significantly impact the cost of imports, as duties and other charges are often calculated based on the prevailing exchange rate.

    Nigeria’s total Imports in 2024 were valued at $40.97 billion, according to the United Nations COMTRADE database on international trade. Nigeria’s main import partners were: China, Belgium and India. New figures from the National Bureau of Statistics (NBS) reveal that Nigerian imported food and beverages worth N1.67 trillion ($1 billion) during the first quarter of 2025 (January–March), reflecting a five per cent increase from the N1.59 trillion recorded over the same period in 2024.

    Analysts from Cordros Securities said the naira appreciation helped cushion the impact of the spike in imported fuel prices triggered by tensions in the Middle East. “We expect FX liquidity to remain robust, supported by reduced global pressures and stronger market confidence, which continues to attract inflows from foreign portfolio investors (FPIs). Additionally, a stronger net FX reserve position enhances the CBN’s capacity to intervene when necessary. Barring any unexpected shocks, we anticipate that the naira will remain stable in the near term,” they said.

    While Nigeria is making strides toward fuel self-sufficiency, it still relies on imports, as seen in the reduced import bill for the first quarter. This indicates a decline in fuel imports but not a complete elimination.

  • Reforms take balance of payments surplus to $4.6b, FX reserves to rise

    Reforms take balance of payments surplus to $4.6b, FX reserves to rise

    The Balance of Payments (BOP) surplus, the ongoing surge in diaspora remittances and continued accretion to external reserves are direct outcomes of crucial financial sector reforms. The $4.60 billion BOP surplus recorded in the third quarter of 2025 marks a sharp turnaround from the deficit position in the previous quarter. This performance highlights strengthening external sector fundamentals, growing investor confidence, and the sustained impact of reforms in the foreign exchange market, monetary policy implementation and the domestic energy sector, reports Assistant Editor COLLINS NWEZE

    The monetary and fiscal authorities have made remarkable strides in restoring macroeconomic stability, bringing down inflation, enhancing data analytics, ending the practice of monetary financing of deficits, and narrowing the foreign exchange (FX) market gap to under two per cent. Central Bank of Nigeria (CBN) reforms have played a pivotal role in organically rebuilding FX reserves, which are projected to surpass $51 billion this year, driven by stronger non-oil export performance and improved market functioning. These reforms have also spurred growth in key economic sectors and attracted a notable surge in foreign capital inflows.

    Reflecting these gains, Nigeria recorded a Balance of Payments (BOP) surplus of $4.60 billion in the third quarter of 2025, a turnaround from the deficit recorded in the preceding quarter, according to CBN data. The improvement was underpinned by a sustained current account surplus of $3.42 billion, supported by robust trade performance, resilient remittance inflows, higher financial flows, and continued accretion to external reserves. The goods account remained in surplus at $4.94 billion, reflecting higher export earnings and strengthened economic fundamentals during the period.

    “Exports increased to US$15.24 billion in Q3 2025, from US$14.90 billion in Q2 2025, on account of increases in crude oil and a refined petroleum products exports. The country is gradually switching from a net importer of refined petroleum products to a net exporter.  Import of petroleum products decreased by 12.7 per cent to US$1.65 billion,” the CBN said.

    Also, net out payments in the services account increased to US$4.07 billion in Q3 2025, from US$3.74 billion in Q2 2025. “The increase in net out- payments for services was due to increases in net import of transport, travel, insurance, computer & information, other business, and Government services not included elsewhere. The debit balance in the primary income account increased significantly to US$2.95 billion in Q3 2025, from US$1.25 billion in Q2 2025,” the report said.

    “This was largely attributable to repatriation of reinvested earnings by domestic banks on their foreign investments abroad especially on direct investments. The secondary income account balance decreased slightly to US$5.50 billion in Q3 2025, from US$5.51 billion in the preceding quarter. Personal transfers (workers’ remittance) from Nigerians in diaspora slightly decreased in Q3 2025 to US$5.24 billion, from US$5.30 billion in Q2 2025,” it added.

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    Crude oil exports rose to $8.45 billion, while exports of refined petroleum products increased by 44 per cent to $2.29 billion, indicating further progress in domestic refining capacity and Nigeria’s gradual transition from a net importer to a net exporter of refined petroleum products. Total goods exports stood at $15.24 billion, while imports of refined petroleum products declined by 12.7 per cent, resulting in an improved trade balance.

    Workers’ remittances also remained strong, with the secondary income account recording a surplus of $5.50 billion, including $5.24 billion in remittance inflows from Nigerians in the diaspora. Developments in the financial account further supported the overall BOP outcome, with Nigeria posting a net lending position of $0.32 billion.

    Foreign direct investment inflows rose to $0.72 billion, while portfolio investment inflows remained robust at $2.51 billion, reflecting improved investor sentiment and continued non-resident participation in domestic financial instruments. The country’s external reserves increased to $42.77 billion at end-September 2025, up from $37.81 billion at end-June, thereby strengthening Nigeria’s external buffers.

    According to the CBN, the Q3 2025 BOP outcome underscores strengthening external sector fundamentals, firmer investor confidence, and the continued impact of reforms in the foreign exchange market, monetary policy implementation, and the domestic energy sector. CBN Governor, Olayemi Cardoso had earlier reaffirmed that the banking system remains resilient, with continued vigilance on emerging risks. At the 60th Annual Bankers’ Dinner, he outlined the Bank’s 2026 priorities which include strengthening the banking system, ensuring price stability, modernising payments, deepening financial inclusion and supporting responsible fintech innovation.

    He also noted growth in digital payments, expansion of contactless cards, improved agent-banking controls, and Nigeria’s exit from the FATF grey list as major confidence boosters. He concluded by restating the bank’s commitment to disciplined, transparent, and forward-looking policies to keep Nigeria’s economy stable and positioned for sustainable growth.

    Journey through reforms

    The CBN had embarked on a series of bold reforms to attract more foreign capital to the economy, achieve price and exchange rate stability. In 2023, the new administration, alongside the CBN under Governor Cardoso, implemented landmark reforms to stabilise the economy. The authorities liberalised the foreign exchange market, ended central bank financing of the fiscal deficit, and reformed fuel subsidies. Simultaneously, the government strengthened revenue collection and took targeted measures to rein in the surging inflation rate. Since these reforms were implemented, international reserves have increased, and people can now access foreign exchange in the official market.

    Besides, Nigeria successfully returned to international capital markets last December and was recently upgraded by rating agencies. A new domestic, private refinery is positioning Nigeria up the value chain in a fully deregulated market. CBN’s policies, including the currency reforms, led to investment inflows from abroad and reduced interventions in the domestic forex market. The unification of exchange rates and the clearing of over $7 billion FX backlog raised the country’s investment outlook, with multilateral organizations, like the World Bank describing it as bold intervention to improve the economy’s sustainability in the long run.

    Also, Nigeria’s sovereign risk spread has fallen to the lowest level since January 2020, erasing the premium accumulated during the pandemic and subsequent strain on its economy. All these are deliberate efforts to woo investors and sustain capital inflows to the economy. In its efforts to tame inflation, the CBN recently hosted the Monetary Policy Forum 2025, featuring fiscal authorities, legislative, private sector, development partners, subject-matter experts, and scholars with the theme: “Managing the Disinflation Process.” The forum is a major push to improve monetary policy communication, foster dialogue, and collaborate on critical issues shaping monetary policy.

    During the event, Cardoso explained that the apex bank’s focus is to sustain price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship. He said the apex bank is continuing its disciplined approach to monetary policy, aimed at curbing inflation and stabilising the economy. Cardoso reiterated that the goal of the CBN is to ensure that monetary policy remains forward-looking, adaptive, and resilient.

    In addressing our economic challenges, collaboration is key: “Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence. Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” Cardoso said.

    The CBN also focused on strengthening the banking sector, introducing new minimum capital requirements for banks (effective March 2026) to ensure resilience and position Nigeria’s banking industry for a $1 trillion economy. These reforms and developments reflect the Bank’s commitment to creating an enabling environment for inclusive economic development.

    However, achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance. “As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability,” Cardoso stated.

    Continuing, he said monetary policy easing became necessary following a review of macroeconomic developments. According to him, the decision by the MPC to ease the policy stance was made in the light of improving inflation trends. “The committee’s decision to lower the monetary policy rate was predicated on the sustained disinflation recorded in the past five months, projections of declining inflation for the rest of 2025 and the need to support economic recovery efforts,” Cardoso said.

    Forex sources expand

    The CBN under Cardoso 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 authorized 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. Given that FX inflows to the economy are strategic in achieving monetary and fiscal policy stability, the CBN under Cardoso puts in a lot of efforts 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.

    Remittances into the economy are expected to rise further, supported by the CBN’s ongoing efforts to strengthen public confidence in the foreign exchange market, build a robust and inclusive banking system, and promote price stability—measures that are critical for sustaining long-term 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.

    Economic gains through reforms

    According to Cardoso, over the past 12 months, Nigeria’s economy has transitioned from crisis management to laying the groundwork for a sustainable recovery. “After nearly a decade in which real GDP growth averaged about 2%, reforms have restored momentum and confidence in our broad macroeconomic environment. Our economy grew by 4.23 per cent in the second quarter of 2025, the strongest pace in four years, driven by improvements in telecommunications, financial services, and oil production,” he said.

    “More importantly in terms of long-term stability, inflation, while still high, has moderated consistently. From a peak of 34.6 per cent in November 2024, it has more than halved to 16.05 per cent in October 2025. This marks seven consecutive months of disinflation. Food inflation, the largest single component of the basket, fell to 13.12 per cent in October, down from 16.87 per cent in September and 21.87 per cent in August,” he said.

    This significant, steady decline in inflation is restoring real purchasing power for households and businesses. It also demonstrates disciplined execution and Nigeria’s return to orthodox monetary policy. “We continue with determination to bring inflation down further. The current double-digit rate cannot be acceptable. Price stability is the foundation of sustainable growth. Our transition to an inflation targeting framework is gaining traction. We have improved data analytics, strengthened communication, and ended monetary financing of fiscal deficits. These actions have strengthened monetary policy transmission and anchored expectations.”

  • How financial regulations fixed perennial year-end cash scarcity

    How financial regulations fixed perennial year-end cash scarcity

    The Central Bank of Nigeria (CBN) is reinforcing operational discipline to ensure that the financial system serves all Nigerians reliably, particularly by guaranteeing the availability of cash at all times. A committee set up and chaired by the CBN Governor, Olayemi Cardoso, to take a holistic look at the country’s recurring cash scarcity challenge appears to have brought much-needed relief to millions of Nigerians who depend on cash for daily living and business operations, reports Assistant Editor COLLINS NWEZE

    Nigerians are expressing renewed optimism as, for the first time in recent years, the Christmas season was celebrated without widespread complaints of cash scarcity or difficulty accessing money from banks and Automated Teller Machines (ATMs). For many years, the Christmas and New Year periods were routinely marred by perennial shortages of naira notes. During these festive seasons—and often long afterwards—bank customers struggled to withdraw cash from bank branches, ATMs, and, in some cases, Point of Sale (PoS) terminals.

    That pattern, however, appears to have changed following the intervention of a committee set up and chaired by the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso. The committee reviewed the recurring cash scarcity challenge and introduced measures aimed at easing the burden on Nigerians.

    Across markets in Lagos, Abuja, Kano, Calabar, and other major cities, traders and consumers alike commended the CBN for what they described as lasting solutions to a long-standing problem. Checks at several commercial bank branches showed that customers who required cash during the festive period were able to obtain it over the counter without difficulty. In addition, many bank ATMs were adequately loaded, allowing cardholders to make withdrawals seamlessly. In bank branches visited in Ibeju-Lekki, Victoria Island, and Ikoyi, the long queues traditionally associated with the season were largely absent.

    One bank customer, Mrs. Nkiru Onyema, said her experience marked a significant departure from previous years. “It took me 10 minutes to be paid by my bank. I am happy that the old practice of people queuing in banks and ATMs for cash withdrawals and deposits is over,” she said. According to her, the cash crunch has eased since banks began ensuring that their ATMs are sufficiently stocked, enabling customers who cannot access banking halls to withdraw cash conveniently from machines.

    Another customer, Stephen Abiodun, shared a similar experience after using his bank’s ATM. “After spending just 15 minutes, I was able to get cash from my bank’s ATM. The time people spent at the banking halls also reduced giving them more time to carry out other productive activities,” he said. Observations at bank branches in Garki, Abuja, Broad Street in Lagos, and the Ikeja axis also in Lagos revealed that ATMs were fully operational and dispensing cash.

    Reacting to the development, President of the Bank Customers Association of Nigeria (BCAN), Dr. Uju Ogubunka, said the improvement has brought significant relief to bank customers nationwide. Ogubunka, a former Registrar of the Chartered Institute of Bankers of Nigeria (CIBN), stressed that banks must continue to request adequate cash supplies from the CBN to meet their obligations to customers.

    Explaining how the feat was achieved, the CBN Governor spoke during the last bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos. According to him, the achievement was the result of close collaboration between the apex bank and commercial banks. “Our starting point was a comprehensive, end to end review of the entire cash lifecycle: from production, to transportation, to distribution, and eventual access by consumers,” he said.

    He added: “This holistic assessment enabled us to address root causes rather than symptoms. As a result, we recalibrated our cash printing models, issued guidelines on the optimal ATM to card ratio, strengthened requirements for CBN approval before ATM or branch closures, enforced sanctions on banks whose ATMs fail to dispense cash, and intensified supervision of payment agents and POS operators nationwide.”

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    Digital finance transformation

    Nigeria’s digital finance transformation accelerated in 2025, reflecting CBN’s twin priorities of fostering innovation while safeguarding stability across the payments ecosystem. Earlier this year, we extended our Payment System Vision roadmap to 2028, an ambitious commitment to modernise payments infrastructure and strengthen cybersecurity.

    According to the CBN, more than 12 million contactless payment cards are now in circulation. Our regulatory sandbox has expanded to over 40 fintech innovators, enabling safe experimentation and responsible scaling of new digital finance solutions. “Revised agent banking guidelines have tightened anti money laundering controls, including geo fencing of high risk areas, while improving consumer protection at the last mile. Integration across switching companies has improved, bringing Nigeria closer to seamless domestic interoperability,” it said.

    Supported by these measures, Nigeria today stands among Africa’s most advanced digital payments markets, with a dynamic fintech ecosystem that has produced eight of the continent’s nine unicorns. By mid-2025, leading fintech apps had surpassed 10 million downloads each, with one surpassing 50 million downloads, reflecting deep consumer adoption.

    ATM, POS transactions for foreign cards

    CBN recently directed banks and other financial institutions to ensure uninterrupted use of foreign-issued payment cards across ATMs, point-of-sale (POS) terminals and online platforms nationwide. In a circular CBN’s Financial Policy and Regulation Department and signed by its Director, Rita Sike, is expected to improve access to funds, security and user experience for tourists and Nigerians returning from the diaspora.

    She said: “In furtherance of ongoing efforts to facilitate access to funds and convenience, security, and user experience in foreign card usage for diasporans and tourists visiting Nigeria, all banks and non-bank acquirers of value are hereby directed to ensure uninterrupted and efficient local currency withdrawal, payment, and transfer services for users of foreign-issued payment cards nationwide.”

    Under the circular, banks and fintechs were instructed to ensure that all ATMs, POS and virtual terminals were configured to accept international cards, complied with card-scheme standards and possessed the required certifications. They were also required to maintain system availability to avoid failed transactions. The central bank said institutions must “implement multi-factor authentication for all withdrawals and online transactions exceeding $200 per day, $500 per week, and $1,000 per month (or its equivalent),” while ensuring compliance with approved ATM cash withdrawal limits.

    The CBN further directed banks and acquirers to clearly disclose exchange rates and charges to customers before completing transactions, maintain sufficient liquidity to settle transactions, and ensure that merchants were paid in local currency. They are expected to “clearly communicate the applicable exchange rate, which shall be market-driven and based on the prevailing official rate, as well as other associated charges to users,” the CBN said, adding that transactions should only be completed after customers have accepted the terms.

    To curb fraud and abuse, the circular required institutions to strengthen know-your-customer and anti-money laundering controls, monitor unusual transaction patterns, recalibrate fraud-monitoring systems to reduce false declines on legitimate foreign card transactions, and ensure that card-acceptance devices supported contactless payments for low-value transactions. Banks were also directed to require signed receipts for card-present transactions and request valid identity documents where transactions appeared suspicious. Suspicious transactions must be reported to the Nigerian Financial Intelligence Unit in line with existing regulations.

    For acquirers, the CBN mandated robust and auditable chargeback management processes, retention of transaction records for at least 12 months, and quarterly training for merchants and agent networks on dispute handling and chargebacks. The regulator warned that unresolved customer complaints escalated to the CBN would attract sanctions. Tourists and Nigerians returning from the diaspora who experienced difficulties using foreign cards were advised to report such incidents to the CBN’s Consumer Protection and Financial Inclusion Department. “The CBN will monitor compliance with this directive and will impose appropriate sanctions on any institution found in breach, in accordance with extant regulations,” it said. The move comes during the yuletide period, when a surge in visits by Nigerians living abroad and foreign tourists typically leads to increased reliance on foreign-issued cards for cash withdrawals and payments.

    Entrenching digital payments

    The apex bank has for years, looked beyond cash by entrenching digital payments among the populace. That explained why the CBN raised the innovation bar with the release of a new e-payment guidelines titled: “Migration to ISO 20022 Standard for Payment Messaging and Mandatory Geo-Tagging of Payment Terminals.”

    According to Cardoso, the Nigerian payments ecosystem has been ahead of many advanced economies, yet has not always received the recognition it deserves. “Many innovations that other countries are only now experiencing have been part of our system for years. We must celebrate these successes, as they contribute to building our global reputation. Nigeria’s dynamic fintech ecosystem has driven financial inclusion and positioned the country as a hub of innovation in Africa,” he said.

    Cardoso explained that despite a challenging external environment, Nigerian Fintechs continue to shine, attracting significant foreign investment and several have achieved global unicorn status this year. Their innovations, alongside other financial service providers, have fuelled growth in transactions and made financial services more affordable and accessible for many more Nigerians. “We must continue to leverage this channel to enhance access to finance and credit, particularly for under-served populations. However, I urge fintech companies and banks to ensure their platforms are not exploited for fraudulent activities. Strengthening the KYC onboarding process is essential to prevent malicious actors from exploiting our financial system.

    “Additionally, these institutions must prioritize improving transaction monitoring and bolstering consumer protection measures to ensure that digital channels remain safe, especially for the most vulnerable segments of our population.”

    Cardoso said that while the apex bank continues to lay the foundation for price stability and foster a conducive policy environment, the role of banks in this journey remains crucial. “At the Central Bank, we have intensified surveillance of market activities to ensure compliance. Together, we must build a market based on strong governance and transparency. As regulators, we will maintain a zero-tolerance approach to compliance violations,” he said.

    Sanctions for policy violations

    The CBN recently sanctioned Deposit Money Banks (DMBs) for failing to make naira notes available through automated teller machines (ATMs), during the yuletide season. Each bank was fined N150 million for non-compliance, in line with the CBN’s cash distribution guidelines, following spot checks on their branches. The enforcement action follows repeated warnings from the CBN to financial institutions to guarantee seamless cash availability, particularly during periods of high demand.

    Communication with the banks revealed that the fines were debited directly from their accounts with the apex bank. Hakama Sidi Ali, acting director of corporate communications at the CBN, confirmed the development, noting that “Ensuring seamless cash flow is paramount to maintaining public trust and economic stability. The CBN will not hesitate to impose further sanctions on any institution found violating its cash circulation guidelines,” she added.

    The CBN’s investigations and monitoring will continue to scrutinise cash hoarding and rationing, both at bank branches and by POS operators. The Central Bank is working with security agencies to crack down on illegal cash sales and operational violations, including enforcing POS operators’ daily cumulative withdrawal limit of N1.2 million. Cardoso had warned banks to strictly adhere to cash distribution policies or face severe penalties. He underscored the CBN’s commitment to maintaining a robust cash buffer to meet Nigerians’ needs. “Our focus remains on fostering trust, ensuring stability, and guaranteeing seamless cash circulation across the financial system,” Cardoso said.

  • Economy: Is this Nigeria’s boom year?

    Economy: Is this Nigeria’s boom year?

    As Nigerians enter the new year with cautious optimism and unsure of how things would pan out in coming months, analysts are upbeat that things bode well for the economy in 2026, judging by indices and key fundamentals, which they are certain would manifest and project positively across all fronts, reports Ibrahim Apekhade Yusuf.

    Certainly 2026 could be the much awaited glory year of Nigeria, if the assurances given by some economic and financial experts are anything to go by. Hope is rising for a further economic rebound in 2026.

    The Central Bank of Nigeria (CBN), one of those institutions that controls the levers of the economy and should know which way the pendulum could swing, has given what could possibly be an assurance of what to expect. 

    Specifically, it has said Nigeria’s external reserves would rise to $51.04 billion this year, supported by easing pressure in the foreign exchange market, stronger oil earnings and sustained inflows from remittances and foreign investments,

    The apex bank disclosed this in its 2026 Macroeconomic Outlook for Nigeria published on its website last Tuesday, noting that the projected reserve level compares with an estimated $45.01 billion in 2025.

    The CBN said the expected improvement in external reserves would be driven largely by reduced pressure in the FX market, anchored on a combination of higher oil receipts, sovereign bond issuances and steady diaspora remittance inflows.

    It added that the ongoing expansion of the Dangote Refinery’s nameplate capacity to 700,000 barrels per day from 650,000 barrels per day in 2025, and ultimately to 1.4 million barrels per day in the medium term, would further strengthen reserve accretion.

    According to the bank, recent reforms in the FX market are expected to further enhance efficiency and transparency, narrow the premium between the Nigerian Foreign Exchange Market (NFEM) and Bureau de Change (BDC) rates, and sustain exchange rate stability. Improved domestic refining capacity is also expected to significantly reduce foreign exchange demand for fuel imports, thereby easing pressure on the reserves.

    The CBN said Nigeria’s external balance is expected to remain positive in 2026, supported by robust export growth and steady remittance inflows. It noted that the projected rise in export earnings hinges on increased crude oil and gas output, as infrastructure improvements and better security around oil installations boost production.

    Overall, the external position is expected to benefit from improving demand conditions in major trading partner economies, reinforced by a projected uptick in foreign investments.

    The current account balance is projected to record a higher surplus of $18.81 billion, representing 11.16 percent of gross domestic product (GDP) in 2026, compared with a surplus of $16.94 billion, or 10.94 percent of GDP, in 2025. This outlook is underpinned by steady diaspora remittances and increased export receipts.

    In the goods account, export receipts are projected to rise to $58.26 billion in 2026 from $54.59 billion in 2025, driven by stronger oil and non-oil exports.

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    Oil export earnings are expected to improve on the back of higher domestic crude oil production, supported by improved security around oil facilities and sustained investments in the sector. In addition, the commencement of petroleum products exports in 2025 is expected to further lift export earnings.

    For non-oil exports, the CBN said sustained growth in agricultural commodity and fertilizer exports is expected to boost receipts. The recently launched National Export Trading Company, aimed at addressing persistent gaps in the export value chain, as well as the National Intellectual Property Policy designed to support creative exports, are expected to further strengthen non-oil export performance.

    Imports are projected to increase to $43.27 billion in 2026 from $39.92 billion in 2025, reflecting anticipated higher demand for capital goods and intermediate inputs as economic activity strengthens.

    The services account deficit is expected to widen to $13.68 billion in 2026 from $12.80 billion in 2025, driven by higher payments for business and transport services. The rise in business services payments reflects Nigeria’s increasing demand for research and development services, while payments for transport services are expected to rise in line with higher freight charges associated with increased imports of non-oil merchandise.

    The primary income account is projected to remain in deficit at $8.62 billion, due to higher investment income payments to non-resident investors, as relatively attractive yields continue to attract foreign portfolio inflows.

    Meanwhile, the positive performance of the secondary income account is expected to be sustained in 2026, with a projected surplus of $26.13 billion compared with $23.82 billion in 2025. This projection is based on anticipated growth in diaspora remittances through formal channels, as well as higher inflows of general transfers, particularly those linked to preparations for national elections.

    The financial account is expected to remain in a net borrowing position of $10.15 billion, reflecting higher portfolio inflows and new external borrowings by the government, the CBN added.

    Assurances of economic revamp by more experts

    A leading economist, Bismarck Rewane, holds this view and very strongly too that Nigeria could enter 2026 on its strongest economic footing in more than a decade.

    According to him, a combination of factors both complex and superficial including easing inflation, rising investment, major corporate listings and stabilising monetary conditions will propel the country into a new and more durable cycle of growth.

    Rewane made his projections at the Parthian Economic Discourse 2025 in Lagos, mid last month, where he described 2026 as a defining year in which structural reforms, private-sector expansion and improved policy coordination converge to reposition Africa’s largest economy for a significant turnaround.

    The economist hinged his optimism in what he says, are clearly visible signs at play in the key commanding heights of the economy including but not limited to – manufacturing, banking, technology, telecoms, the creative industry and real estate – under more favourable macroeconomic conditions.

    He says matter-of-factly that after years of unstable inflation, exchange-rate distortions and suppressed investment, Nigeria is finally approaching an economic juncture where fundamentals and reform momentum can reinforce each other rather than work in conflict.

    A major fulcrum of his forecast is an explosive expansion of the capital market, where he projects that the Nigerian Exchange’s total market capitalisation could jump to N262 trillion in 2026, up sharply from the current N90 trillion – a staggering 191% surge.

    At that level, he notes, the market would represent 72% of Nigeria’s projected GDP, placing it among the fastest-expanding markets in the emerging-economies across the universe.

    Pressed further, he said the coming expansion, no doubt, is anticipated because of the planned listings of mega corporates, including the Dangote Refinery and the Nigerian National Petroleum Company (NNPC), alongside accelerating profitability across sectors such as telecoms, cement, consumer goods and banking.

    Expectedly, he said investor sentiment is already shifting due to improving FX stability, sustained disinflation and stronger earnings guidance from top-tier companies.

    He further maintains that Nigeria’s equity market is entering a new cycle powered by corporate expansion, regulatory reforms and the return of long-delayed market-moving listings.

    Rewane also forecasts a significant easing of inflation in 2026, describing it as one of the most fundamental development to affect the nation’s economic recovery projections.

    He also expects food and core inflation to fall to around 20%, driven by a firm disinflationary stance by the Central Bank of Nigeria (CBN), improvements in domestic refining capacity that will reduce volatility in fuel prices, stronger manufacturing output, rising productivity, and reforms aimed at lowering logistics and supply-chain costs.

    With inflation easing, he predicts an improvement in household purchasing power, which will in turn stimulate demand across retail, services and industrial sectors.

    On monetary policy, Rewane emphasises that 2026 will likely mark the beginning of cautious interest-rate cuts by the CBN after nearly two years of aggressive tightening. However, he warns that the apex bank will move slowly and conditionally.

    He further argues that the CBN must first be convinced of sustained disinflation, improved liquidity control through robust CRR and liquidity-ratio management, more efficient FX market operations, strengthened reserves, and credible fiscal consolidation with reduced deficit financing. In his view, monetary authorities will be navigating a delicate balance – cutting too soon could reignite inflationary pressures, while cutting too late risks suppressing the investment momentum that Nigeria urgently needs.

    Rewane predicts a more stable and stronger Naira in 2026, projecting that the exchange rate will appreciate and stabilise within the N1, 450 to N1, 500 per dollar band.

    He expects this outcome to be supported by higher oil production and export earnings, improved FX supply from rising reserves, policy reforms that reduce arbitrage and speculation, favourable inflation-interest differentials that attract capital flows, and a moderation in import demand due to fiscal and trade measures.

    He stresses that sustained exchange-rate stability will be central to investor confidence, business planning and macroeconomic predictability.

    On overall economic performance, Rewane forecasts Nigeria’s GDP growth to rise to 4.1% in 2026, driven by expanding business activity, infrastructure improvements, industrial-policy execution, stronger private-sector credit, better trade flows and higher domestic value addition. He notes that consumption – which has been heavily eroded by inflation – is expected to recover gradually, while investment spending will be supported by strong government-bond issuance and public infrastructure expansion.

    Rewane identifies six industries he believes will shape Nigeria’s economic direction in 2026: agriculture and agro-processing with projected earnings of ₦104.6 trillion; real estate and construction with ₦72.41 trillion; telecommunications with ₦41.07 trillion; manufacturing with ₦38.25 trillion; the creative economy with ₦7.23 trillion; and technology and fintech with ₦2.97 trillion.

    He noted that each of these sectors is undergoing its own structural transformation driven by demographic pressure, digital expansion, urbanisation, regional trade integration and the broader macroeconomic adjustment.

    Corporate earnings, according to him, will be one of the strongest indicators of renewed economic vitality next year.

    He highlights MTN Nigeria and Dangote Cement as standout performers. MTN is projected to see Q1 2026 revenue rise to N1.7 trillion and Q2 revenue to N2.22 trillion, driven by data-led growth, cost efficiency and tariff adjustments.

    Dangote Cement is expected to post Q1 2026 revenue of N1.3 trillion and Q2 revenue of N1.37 trillion, with profit after tax in Q2 jumping by more than 100% to N628 billion, boosted by clinker exports, infrastructure demand and regional expansion. He argues that strong corporate results will play a critical role in sustaining investor confidence and driving market capitalisation higher.

    The CEO of Financial Derivatives Company (FDC) Limited, also expects Nigeria’s banking sector to enter 2026 with strengthened stability indicators, helped by moderating inflation, reduced FX exposure as the naira stabilises, improved digital banking penetration, increased sector diversification, and stronger capital buffers following the recapitalisation exercise.

    He predicted that the sector will be led by large universal banks with strong balance sheets, digital-first institutions and fintechs that continue to disrupt retail payments and SME finance.

    On pensions, he projects that funds will experience short-term volatility at the start of 2026 due to global and domestic shocks but will recover strongly by year-end, with net asset value expected to rise to 12–15% as liquidity improves and political risk fades. He expects domestic equities and government securities to outperform as confidence returns.

    Global shocks foretold

    However, Rewane believes that Nigeria’s outlook will not be insulated from global turbulence.

    He warns that geopolitical tensions, moderating commodity prices, potential declines in cocoa and other key exports, fragile global growth and shifts in global energy markets could affect Nigeria’s fiscal and market stability.

    Domestically, he identifies four major risks that could upset the projections: oil prices falling below $60 per barrel, worsening insecurity in food -producing states, excessive election-year spending in 2026, and a sharp decline in global commodity prices if geopolitical tensions ease.

    Ultimately, Rewane concludes that 2026 will be a year in which Nigeria’s economic direction is determined by the quality of policy choices, the discipline of fiscal and monetary authorities, and the country’s ability to secure its productive regions.

    In his words, Nigeria is “standing at the threshold of a profound economic reset,” with the potential either to accelerate into a new era of stability and growth or stumble at the edge of transformation if reforms stall.

    Echoing similar sentiments, Group Managing Director of Parthian Capital, Oluseye Olusoga, said Nigerians should take charge of the country and not leave it only to the government.

    He said: “Security is not a job only for the government. It should be our own job too. Without security, investment won’t flow”.

    Dr. Ayo Teriba, CEO, Economic Associates, has also projected that Nigeria’s inflation could slow to a single digit by January 2026 as the lag effect of ‘Detty December’ is poised to further cool prices that have remained in the double-digit range for more than five years.

    Teriba projects that prices could ease to about 12 percent in December 2025 compared to about 33 percent it stood in the same period last year, noting that the cooling inflation was more of a lag effect than the rebasing exercise conducted by the National Bureau of Statistics last year.

    “The steep deceleration in YOY inflation from 33% in December 2024 to 24.48%, in January 2025 was not the as a result of rebasing but the lagged effect of Detty December as steep retail price cuts continued into January and indeed less steeply to the rest of the year to the detriment of large retail chain stores that are now known to be closing down one after the other,” Teriba said in a statement recently.

    “This explains the -5.2 month on month deceleration in January 2025. This effect should repeat in January 2026 to push year on year inflation into single digits, where it will remain for the rest of 2026. We predict that the deceleration Detty December should repeat to bring YOY inflation to about 12% in December 2025.”

    According to Teriba, Nigería is finally experiencing a return to economic calm for the first time since 2019/2020, urging the NBS to stay committed to communicating clearer data that would help restore confidence and decision-making as month-on-month data for January 2025 remains elusive.

    “Never in recent memory has the NBS’ rebasing produced this level of ambiguity. The remedy is straightforward: publish the missing month-on-month figure for January 2025 and clarify the December 2024 index value,” Teriba said.

    While attempting a post mortem of the performance of the nation’s capital market in the outgoing year, Dr. Umaru Kwairanga, Chairman of the Nigerian Exchange (NGX) Group, said the market has made measurable progress toward its strategic vision of a globally competitive, inclusive, and innovation-driven capital market.

    The NGX equities market, he stressed, sustained strong performance in 2025, with overall turnover more than doubling year-on-year. The All-Share Index (NGX-ASI) registered robust gains, placing the NGX among the top-performing African stock markets in 2025 with a near 49.17% increase as of December 24, 2025.

    Dr. Kwairanga identified policy and regulatory reforms, realigning financial sector capitalisation, and enhanced retail and institutional participation as key drivers of the market’s performance in 2025.

    Recommendations for 2026

    Looking ahead to 2026, Dr. Kwairanga recommended that stakeholders, regulators, and market operators work together to deepen market resilience, international competitiveness, and inclusive growth.

    He suggested embracing long-term investment frameworks, leveraging technology for engagement, and focusing on environmental, social, and governance (ESG) practices.

    Lending credence to the foregoing, Dr. Peter Adebola, financial expert and economist, who is also the Managing Director of Edgefield Capital Management, is very optimistic that the economy would indeed turn the tide in 2026, if all the boxes are ticked and the authorities push the frontiers of socioeconomic growth without faltering.

  • CBN asks banks to configure ATMs, POS terminals for foreign card transactions

    CBN asks banks to configure ATMs, POS terminals for foreign card transactions

    The Central Bank of Nigeria (CBN) has directed banks and non-bank acquirers to implement multi-factor authentication for foreign card transactions exceeding $200 per day, as part of new measures to strengthen security and improve user experience for international cardholders in the country.

    The directive was contained in a circular dated December 18, 2025, signed by the CBN’s Director of Financial Policy and Regulation, Rita Sike. The apex bank further instructed financial institutions to apply the same authentication requirements to transactions above $500 per week and $1,000 per month, and to ensure that point-of-sale (POS) terminals are properly configured for the use of foreign-issued cards.

     According to the CBN, the measures are aimed at ensuring uninterrupted and efficient local currency withdrawals, payments, and transfer services for users of foreign-issued payment cards across Nigeria, particularly tourists and Nigerians in the diaspora visiting the country.

    The regulator said the new framework is designed to improve access to funds, enhance transaction security, and boost overall user experience for foreign cardholders.

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    In addition, banks and non-bank acquirers were directed to configure all automated teller machines (ATMs), POS, and virtual terminals to accept international cards through Nigerian acquirers, comply fully with card association standards, and obtain the necessary certifications to enable seamless transaction processing. Institutions were also instructed to maintain high system availability to guarantee uninterrupted transaction processing.

    The circular reads: “In this regard, banks and non-bank acquirers shall: implement multi-factor authentication for all withdrawals and online transactions exceeding $200 per day, $500 per week, and $1,000 per month (or its equivalent),” the circular reads.

    “With respect to ATM cash withdrawal transactions, ensure compliance with approved cash withdrawal limits.

    “Clearly communicate the applicable exchange rate, which shall be market- driven and based on the prevailing official rate, as well as other associated charges to users. Transactions should only be completed after the user has accepted the terms (with evidence obtained).

    “Maintain sufficient liquidity position to settle transactions.

     “Settle transactions for the merchant in local currency (naira).

     “Implement transaction monitoring to detect unusual patterns in the use of foreign cards across all terminals.

    “Strengthen know-your-customer and anti-money laundering controls for merchants handling foreign card payments.

     “Require their merchants to ensure that all their copies of card-present transaction receipts are properly signed and to request valid identity documents where a transaction appears suspicious.”

     In addition, banks and non-bank acquirers were asked to report suspicious transactions to the Nigeria Financial Intelligence Unit (NFIU) and recalibrate fraud-monitoring systems to reduce false declines on legitimate transactions.

     The circular also said card acceptance devices must be equipped with contactless payment options for low-value transactions and that consumer complaints be resolved within approved timelines, warning that unresolved escalations to the apex bank would attract sanctions.

    “Furthermore, acquirers shall implement and maintain robust, auditable chargeback management processes aligned with applicable card-scheme rules and CBN guidelines (including but not limited to timely case intake, evidence collation, refund execution, and post-incident analytics),” the apex bank said.

     “Require, verify, and retain documentation (including terminal approval slip and signed merchant receipt, and item/service description) for card transactions for use in dispute resolution and chargebacks. The records shall be retained for a minimum of 12 months and be readily retrievable within 24 hours of request by the Acquirer or Scheme.

    “Provide quarterly training to their merchants and agent networks on dispute handling and chargeback processes.”

    The CBN said it will closely monitor compliance with the directive and impose appropriate sanctions on institutions found to be in breach.

  • Nigeria banking sector sound, resilient as more banks cross recapitalisation hurdles

    Nigeria banking sector sound, resilient as more banks cross recapitalisation hurdles

    Nigeria’s banking system remains fundamentally, stable, sound and resilient, a cornerstone of financial stability. At the same time, the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso says it remains vigilant to emerging risks, including cyber threats, credit-concentration pressures, and operational vulnerabilities. These are being addressed through strengthened risk-based supervision and ongoing transition to Basel III, which will further bolster resilience, improve capital quality, and strengthen liquidity monitoring as banking sector recapitalisation gathers momentum, reports Ibrahim Apekhade Yusuf

    Nigerian banks are facing one of their most interesting moments in history.  Very significantly, they have been acknowledged by the Central Bank Nigeria (CBN)-led Monetary Policy Committee (MPC) members to be safe and sound.

    At the 303rd MPC meeting in Abuja, it was noted with satisfaction, the sustained resilience of the banking system, with most financial soundness indicators remaining within regulatory thresholds.

    The committee members also acknowledged the substantial progress in the ongoing recapitalization programme, with 16 banks achieving full compliance with the revised capital requirements.

    They further urged the CBN to ensure a successful implementation and conclusion of the recapitalisation programme.

    With nearly four months to the conclusion of the recapitalisation exercise, the CBN Governor, Olayemi Cardoso has reported that the process is firmly on track.

    Speaking at the recently held Bankers’ Dinner in Lagos, he reiterated that several banks have already met the new capital thresholds, while others are advancing steadily and are well positioned to comfortably meet the March 31, 2026 deadline.

    “To date, 27 banks have raised capital through public offers and rights issues, and sixteen have already met or exceeded the new requirements — a clear testament to the depth, resilience, and capacity of Nigeria’s banking sector,” he said.

    “As we strengthen the capacity of our banks, stress-testing this year confirms that Nigeria’s banking sector remains fundamentally robust. Key financial soundness indicators overwhelmingly satisfied prudential benchmarks during the year,” he added.

    The banks are also recording giant strides in the pursuit of their recapitalisation, with 16 already met the requirement ahead of the March 31, 2026 deadline.

    Redesigning credit‑risk framework

    The CBN is redesigning banking sector’s credit‑risk framework to protect approximately N4.14 trillion new capital being raised in the ongoing bank recapitalisation programme.

    Cardoso, said the apex bank will be enforcing stronger governance, greater transparency, and firmer accountability to protect raised funds.

    The CBN, he said, has equally established a dedicated Compliance Department, now fully operational, with mandates covering financial crime supervision, market conduct, enterprise security, corporate governance, and Environmental, social, and governance (ESG).

    According to the CBN boss, the process enforcing stronger controls on raised funds is ongoing with the redesigning of the credit‑risk framework expected to ensure that raised funds are well managed by financial institutions.

    Cardoso stated: “As recapitalisation progresses, we are redesigning the credit‑risk framework to enforce stronger governance, greater transparency, and firmer accountability across the sector. We are determined to break the boom‑and‑bust cycle that has accompanied past recapitalisation efforts”.

    Already, the CBN Credit Risk Management System (CRMS) is web-enabled, allowing banks and other stakeholders to dial directly into the CRMS database to render statutory returns or conduct status enquiry on borrowers. Also, the CBN is in the process of integrating the CRMS with other systems operating in the banks to make it more efficient.

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    In a report titled: “Nigeria’s macro headwinds trigger bank recapitalisation” Deloitte, a global accounting and audit firm, put the total funds to be raised in the recapitalisation exercise which ends on March 31, 2026 at N4.14 trillion.

    It said the upward review of banks’ capital base from N50 billion to N500 billion depending on the type of licence held by the bank, remains an essential action required to boost capital adequacy needs of the Nigerian financial industry.

    Nigeria banks’ capital adequacy, the report says, has been significantly impacted by macroeconomic challenges such as high inflation and interest rates, currency volatility and forex illiquidity.

    “The upward revision will ensure that Nigerian banks have the capacity to take on bigger risks and stay afloat amid both domestic and external shocks. It also means increased liquidity position of banks, which will help broaden their loss-bearing capabilities,” the report said.

    Continuing, Cardoso said Nigeria’s banking system remains fundamentally sound and resilient, a cornerstone of our financial stability.

    “At the same time, we remain vigilant to emerging risks, including cyber threats, credit-concentration pressures, and operational vulnerabilities. These are being addressed through strengthened risk-based supervision and our ongoing transition to Basel III, which will further bolster resilience, improve capital quality, and strengthen liquidity monitoring,” he said.

    The CBN boss disclosed that with just four months to the conclusion of the recapitalisation exercise, the process remains firmly on track.

    “As we strengthen the capacity of our banks, stress-testing this year confirms that Nigeria’s banking sector remains fundamentally robust. Key financial soundness indicators overwhelmingly satisfied prudential benchmarks during the year,” Cardoso added.

    He said the apex bank is reinforcing operational discipline to ensure the financial system serves all Nigerians reliably.

    “Our starting point was a comprehensive, end‑to‑end review of the entire cash lifecycle: from production, to transportation, to distribution, and eventual access by consumers. This holistic assessment enabled us to address root causes rather than symptoms.

    “As a result, we recalibrated our cash‑printing models, issued guidelines on the optimal ATM‑to‑card ratio, strengthened requirements for CBN approval before ATM or branch closures, enforced sanctions on banks whose ATMs fail to dispense cash, and intensified supervision of payment agents and POS operators nationwide,” he said.

    Road to $1tr economy

    These developments point to sound regulatory oversight, and determination of the Oleyemi Cardoso-led CBN to support government in achieving $1 trillion Gross Domestic Product (GDP) target by 2030.

    The Policy Advisory Council report on the national economy, had set an ambitious goal of achieving a GDP of $1 trillion, with clearly defined priority areas and strategies.

    It is believed that a well-recapitalised banking sector is undeniably crucial in achieving the GDP growth plan. Hence, Cardoso, advised banks to prepare for a new round of recapitalisation to ensure they have the necessary capital to support the economic growth.

    Cardoso asked: “Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1tr economy in the near future? In my opinion, the answer is “No!” unless we take action. That action was the ongoing recapitalisation of banks, meant to prepare them for expansion and attract big ticket transactions to support economic growth.”

    While the recapitalisation exercise continues, the apex bank categorically reassured the public, depositors, and stakeholders that the Nigerian banking sector remains resilient, safe, and sound.

    “The CBN affirms that it continues to monitor all financial institutions under its regulatory purview and maintains robust frameworks for early warning signals and risk-based supervision. These mechanisms ensure that any emerging issues are promptly addressed to protect the integrity of the financial system,” it said.

    Sustaining bank recapitalisation drive

    The CBN had, on March 28, 2024 announced a two-year bank recapitalisation exercise which commenced on April 1, 2024.

    The recapitalisation plan requires minimum capital of N500 billion, N200 billion and N50 billion for commercial banks with international, national and regional licenses respectively.

    Others included merchant banks N50 billion; non-interest banks with national license N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026.

    Cardoso said the recapitalisation policy not only strengthens financial stability but also serves as a catalyst for inclusive growth.

    “By enabling banks to extend more credit to MSMEs, we enhance job creation and productivity. Furthermore, with increased capital, banks can invest in technology and innovation, crucial for driving digital financial services such as mobile money and agent banking. These technologies are important to breaking down geographic and economic barriers, bringing financial services to even the most remote areas,” he stated.

    Banking sector remains robust

    Under the ongoing recapitalisation programme, the apex bank adopted a distinctive definition of minimum capital base, in addition of paid up share capital and share premium, excluding other reserves and retained profits.

    The distinctive definition implied that nearly all banks have to raise new capital, despite the fact that most banks have shareholders’ funds in excess of the minimum capital base.

    Cardoso explained that the banking sector remains robust, with key indicators reflecting a resilient system.

    “The non-performing loan ratio remains within the prudential benchmark of five per cent, showcasing strong credit risk management. The banking sector liquidity ratio comfortably exceeds the regulatory floor of 30 per cent, a level which ensures banks are maintaining adequate cash flow to meet the needs of customers and their operations. The recent stress test conducted also reaffirmed the continued strength of our banking system,” he said.

    The CBN Deputy Governor, Corporate Services, Ms. Emem Usoro, said the journey to a $1 trillion economy requires structured planning, clearly defined policies, unwavering implementation, and an inclusive approach that aligns public and private sector interests.

    Usoro said that one of the key components of the $1 trillion ambition is the recapitalisation of Nigerian banks.

    She noted that banks must be sufficiently capitalised to meet the financial demands of a larger and more dynamic economy.

    “As we work towards building a $1 trillion dollar economy, we must consider the recapitalisation of our banks to be able to fund, finance and power the economy, and to favourably compete globally,” Usoro said during a media engagement in Abuja.

    The Group Managing Director of United Bank for Africa (UBA), Oliver Alawuba described the ongoing CBN bank recapitalisation policy as both timely and essential in positioning the financial system to meet the demands of a growing and globally competitive economy.

    According to Alawuba, the initiative is expected to boost the resilience of the banking sector by strengthening its capacity to withstand economic shocks such as inflation, currency volatility and global geopolitical disruptions. He noted that the policy will also place Nigerian banks on a stronger footing to finance the country’s long-term economic transformation, including funding of large-scale infrastructure and industrial projects.

    What experts say

    In their analysis of the Nigeria’s banking recapitalisation, KPMG Advisory Services noted that it anticipates that some of the major winners from this recapitalisation exercise will include banks with a deliberate approach to identifying value creation opportunities from the programme.

    “Accordingly, the recapitalisation exercise may present a path to value add from new licence permissions e.g. new markets, customer segments, new activities, etc. which should be taken into consideration by banks throughout the process.”

    Pressed further, it said, “The stringent definition of qualifying capital has left significant reserves unavailable for capitalisation which has led to a wider impact on the sector than anticipated.

    “Based on the prescribed definition, our assessment indicates most banks currently fall short of the revised minimum capital requirements and will be required to take action to comply within the stipulated timeline of March 2026.

    “As indicated in the CBN guideline, banks have a few options for complying with the revised minimum capital requirements including capital raise, mergers and acquisitions, changes in licence categorisations etc.”

    Likely to be the preferred option for industry players, banks have access to both the private and public capital markets.

    With most Nigerian banks listed on the stock exchange and sufficient timeline for private banks to approach the market, the capital market presents an option for raising capital through rights issues to existing shareholders and/or public offers to new shareholders.

    Being a critical channel for capital mobilisation in the last recapitalisation programme, with over N100bn raised on the stock exchange prior to the deadline, we expect to see most banks approach the market.

    However, the level of industry capital shortfall of N4tn relative to the capital market depth indicates limited capacity to meet industry requirements.

    Furthermore, prevailing macroeconomic headwinds including high inflation and foreign exchange instability may deter investor appetite for equities, while the high interest rate environment enhances  the attractiveness of fixed-income securities relative to equities.

    The preference for this option also presents the risk of a market overhang which will exert pressure on pricing of banking stocks which are currently trading below book value. This will require an increase in the number shares to be sold by banks with significant implication for existing shareholder dilution.

    Accordingly, considerations such as speed to market, market conditions, investor confidence, timing of offers, and pricing will be important to developing and implementing a strategy around this option.

    Nigeria is one of Africa’s major investment destinations, with the financial services industry being a top  sector for investment. Particularly, the banking sector has attracted interest and investment from financial investors as well as strategic players looking to enter the market over the years.

    However, investor outlook on Nigeria has been relatively cautious in recent times, evidenced by declining FDI flows. Despite this, the banking industry, characterised by relatively high returns and stability, remains attractive particularly given the lower valuations resulting from the devaluation of the naira and the significant upside potential from increasing banking penetration and expected economic recovery and growth.

    However, banks will need present a comprehensive equity story that highlights key strategic thrusts and return potential, access a wide network of potential investors and mid-wife a credible transaction process to optimise this capital source.

    The private capital raise process may offer better price discovery for well-prepared banks compared to the public capital market. However, this could involve a trade-off, with loss of some level of governance/control to an investor(s) with a significant stake.

    What the law says

    The 2007 Central Bank of Nigeria (CBN) Act mandates the apex bank as one of its objectives to promote financial system stability.

    The CBN ensures the safety and soundness of the financial system in Nigeria through banking sector reforms, improved access to finance, adequate institutional capacity building and implementation of good corporate governance practices.

    Analysts said ensuring financial and banking system stability is important because the failure of financial institutions, particularly banks, is capable of undermining public confidence, precipitate unanticipated contraction in money supply, reduce savings and investments, and induce payment system collapse with adverse effects on the real economy.

    More so, the stability of the financial system is very imperative since its achievement ensures effective monetary policy transmission mechanism. As such, ensuring financial system stability will help monetary authorities in achieving the primary objective of price stability.

    To achieve financial and banking system stability, the CBN at different times had instituted various reforms aimed at ensuring effective performance of the banking sector.

  • CBN removes deposit limits, raises withdrawal thresholds

    CBN removes deposit limits, raises withdrawal thresholds

    The Central Bank of Nigeria (CBN) has introduced major changes to Nigeria’s cash management framework, removing all limits on cash deposits and increasing weekly withdrawal thresholds for individuals and corporate bodies.

    The new directives, issued in a circular released by the apex bank, will take effect from January 1, 2026.

    According to the CBN, the decision to overhaul its cash-related policies is driven by the need to reduce the rising cost of managing physical currency, bolster security around cash movements, and curb money laundering by encouraging greater use of electronic payment channels.

    In the circular, the CBN confirmed that “the cumulative limit on cash deposits is entirely removed, and the associated fee for excess deposits will no longer apply.”

    The bank said this change is intended to ease the burden on individuals and businesses who operate cash-heavy activities, while also improving liquidity within the banking system.

    Under the revised framework, weekly withdrawal limits across all channels—Over-the-Counter (OTC), Automated Teller Machines (ATMs), and Point of Sale (PoS) terminals—have been pegged at N500,000 for individuals and N5 million for corporate entities.

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    While banks must adhere to these thresholds, the CBN noted that withdrawals exceeding the limits will attract processing fees of 3 percent for individuals and 5 percent for corporate customers.

    The circular clarified that daily ATM withdrawals remain capped at N100,000 per customer but must still fall within the overall weekly ceiling of N500,000 for individuals. It also announced the end of the special authorization that previously allowed individuals to withdraw N5 million once a month and corporate bodies N10 million once monthly.

    In another adjustment, banks are now permitted to load all denominations of the naira in their ATMs, removing earlier restrictions that limited ATM cassettes to smaller notes.

    The CBN also provided details on the sharing formula for the revenue generated from excess cash withdrawal fees. The circular states that 40 percent of such revenue will accrue to the CBN, while 60 percent will go to the bank or financial institution that processed the transaction.

    Other components of the new cash policy were also clarified. The apex bank maintained the N100,000 over-the-counter limit for third-party cheque encashments, noting that any withdrawal through this channel will count toward the weekly withdrawal limit.

    Deposit Money Banks (DMBs) and other financial institutions are additionally required to submit monthly reports detailing cash withdrawal transactions above the set limits and all cash deposit activities. To ensure transparency, banks must create dedicated internal ledger accounts to warehouse charges collected from excess withdrawals.

    The circular also provided clarity on exemptions. Accounts belonging to the federal, state, and local governments, as well as accounts of microfinance banks and primary mortgage banks maintained with commercial and non-interest banks, will not be bound by the weekly withdrawal limits or the associated excess withdrawal fees.

    However, the CBN confirmed that foreign embassies, diplomatic missions, and donor agencies would no longer enjoy exemptions previously granted under the old cash policy.

    Describing the directive as mandatory, the CBN instructed all deposit-taking financial institutions in Nigeria to immediately begin preparations for full implementation on January 1, 2026.

    The apex bank said the reforms are part of a broader effort to strengthen the efficiency of Nigeria’s financial system and to strike a balance between cash usage and digital payments in the country’s evolving economy.

  • CBN redesigns credit-risk policy to protect N4.14tr new capital

    CBN redesigns credit-risk policy to protect N4.14tr new capital

    The Central Bank of Nigeria (CBN) is redesigning banking sector’s credit‑risk framework to protect approximately N4.14 trillion new capital being raised in the ongoing bank recapitalisation programme. Speaking at the weekend in Lagos, CBN Governor, Olayemi Cardoso, said the apex bank will be enforcing stronger governance, greater transparency, and firmer accountability to protect raised funds. He said several banks have already met the new capital thresholds, while others are advancing steadily and are well positioned to comfortably meet the March 31, 2026 deadline.

    “To date, 27 banks have raised capital through public offers and rights issues, and 16 have already met or exceeded the new requirements — a clear testament to the depth, resilience, and capacity of Nigeria’s banking sector,” Cardoso stated.

    The CBN, he said, has equally established a dedicated Compliance Department, now fully operational, with mandates covering financial crime supervision, market conduct, enterprise security, corporate governance, and Environmental, social, and governance (ESG).

    According to the CBN boss, the process enforcing stronger controls on raised funds is ongoing with the redesigning of the credit‑risk framework expected to ensure that raised funds are well managed by financial institutions.

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    Previously, banks were awash with post recapitalisation funds, with analysts predicting that without proper risk management policies and regulatory controls, chances of misapplying such raised funds through risky loans remain high.

    To guard against such occurrence, Cardoso stated: “As recapitalisation progresses, we are redesigning the credit‑risk framework to enforce stronger governance, greater transparency, and firmer accountability across the sector. We are determined to break the boom‑and‑bust cycle that has accompanied past recapitalisation efforts.”

    Already, the CBN Credit Risk Management System (CRMS) is web-enabled, allowing banks and other stakeholders to dial directly into the CRMS database to render statutory returns or conduct status enquiry on borrowers. Also, the CBN is in the process of integrating the CRMS with other systems operating in the banks to make it more efficient.

    In a report titled: “Nigeria’s macro headwinds trigger bank recapitalisation”, Deloitte, a global accounting and audit firm, put the total funds to be raised in the recapitalisation exercise which ends on March 31, 2026 at N4.14 trillion.

    It said the upward review of banks’ capital base from N50 billion to N500 billion depending on the type of licence held by the bank, remains an essential action required to boost capital adequacy needs of the Nigerian financial industry.

    Nigeria banks’ capital adequacy, the report says, has been significantly impacted by macroeconomic challenges such as high inflation and interest rates, currency volatility and forex illiquidity.

     “The upward revision will ensure that Nigerian banks have the capacity to take on bigger risks and stay afloat amid both domestic and external shocks. It also means increased liquidity position of banks, which will help broaden their loss-bearing capabilities,” the report said.

    Continuing, Cardoso said Nigeria’s banking system remains fundamentally sound and resilient, a cornerstone of our financial stability.

    “At the same time, we remain vigilant to emerging risks, including cyber threats, credit-concentration pressures, and operational vulnerabilities. These are being addressed through strengthened risk-based supervision and our ongoing transition to Basel III, which will further bolster resilience, improve capital quality, and strengthen liquidity monitoring,” he said.

    The CBN boss disclosed that with just four months to the conclusion of the recapitalisation exercise, the process remains firmly on track.

     “As we strengthen the capacity of our banks, stress-testing this year confirms that Nigeria’s banking sector remains fundamentally robust. Key financial soundness indicators overwhelmingly satisfied prudential benchmarks during the year,” Cardoso added.

    He said the apex bank is reinforcing operational discipline to ensure the financial system serves all Nigerians reliably.

    “Our starting point was a comprehensive, end‑to‑end review of the entire cash lifecycle: from production, to transportation, to distribution, and eventual access by consumers. This holistic assessment enabled us to address root causes rather than symptoms”.

    “As a result, we recalibrated our cash‑printing models, issued guidelines on the optimal ATM‑to‑card ratio, strengthened requirements for CBN approval before ATM or branch closures, enforced sanctions on banks whose ATMs fail to dispense cash, and intensified supervision of payment agents and PoS operators nationwide,” he said.

  • Nigeria’s external reserves hit $42bn, highest since 2019

    Nigeria’s external reserves hit $42bn, highest since 2019

    Nigeria’s gross external reserves have risen to $42 billion, the highest level in six years, according to the latest data released by the Central Bank of Nigeria (CBN). The reserves last stood at this level in September 2019.

    The increase, attributed to stronger hydrocarbon export revenues and a steady inflow of foreign exchange, comes on the back of a surge recorded in August.

    At that time, Nigeria’s reserves hit approximately $41 billion — the highest in nearly four years — crossing the $40 billion threshold earlier in the month.

    The August milestone represented a 44-month high since late 2021.

    According to the CBN, total inflows into the reserves amounted to $692.28 million in September alone.

    The recent rise is providing the apex bank with greater liquidity to stabilise the Naira, manage economic shocks, and attract investment.

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    It is believed that the upward trend will continue, offering a buffer for currency stability and boosting investor confidence. However, they caution that persistent challenges such as high inflation, heavy debt obligations, and widespread poverty remain hurdles to long-term economic recovery.

    Economic experts have repeatedly noted that higher reserves enhance the CBN’s ability to support the Naira by intervening in the foreign exchange market to prevent sharp fluctuations.

    The liquidity also signals a more stable economy, potentially drawing in more foreign investment. In addition, the stronger reserves position gives policymakers more flexibility to implement economic reforms.

    The improvement in reserves has coincided with gains in the local currency. The Naira appreciated by 0.91 per cent week-on-week in the official market, closing at N1,487.90 per U.S. dollar. This is the first time it has traded below the N1,500 mark since February 2025.

    In the parallel market, the Naira strengthened by 1.05 per cent to an average of N1,521 per U.S. dollar.

    Rising government hydrocarbon revenues, strengthened by higher oil production, have also supported the currency’s performance.

    Experts have cautioned that the reserve build-up should be seen as a foundation for broader economic transformation, not an end in itself. The federal government recently took on additional debt, and while stronger reserves provide room for policy manoeuvres, underlying structural issues such as inflation and fiscal imbalances remain pressing concerns.

    With reserves at their highest point in six years and crossing significant milestones in August and September, stakeholders are cautiously optimistic that Nigeria is entering a phase of relative foreign exchange stability, provided fiscal and structural reforms keep pace.

  • How Non-Resident BVN policy will expand financial inclusion

    How Non-Resident BVN policy will expand financial inclusion

    The Central Bank of Nigeria (CBN) recently took steps to expand financial services access with the launch of Non-Resident Biometric Verification Number (NRBVN) policy. Already, the Nigeria Inter-Bank Settlement System (NIBSS) data show that the number of Nigerian bank account owners linked to BVN rose by 2.7 million between December 2024 and July 2025 to 66.2 million. The surge in BVN enrollment is an indication that the policy is achieving its objective of getting more Nigerians into the domestic financial services net, writes Ibrahim Apekhade Yusuf

    The Bank Verification Number (BVN) project, which captures the uniqueness of every bank customer is one of the most-innovative projects introduced into the financial system by the Central Bank of Nigeria (CBN).

    The BVN scheme gives each bank customer unique identification and has continued to revolutionise the banking and payment systems while ensuring safety of depositors’ funds.

    The project is now witnessing enrollment surge, as the Olayemi Cardoso-led CBN continues to take strategic steps to advance financial inclusion in the country.

    The surge in BVN figures has also been attributed to the recent launch of Non-Resident Biometric Verification Number (NRBVN) in Abuja.

    Following the unveiling of NRBVN in Abuja, the CBN boss Cardoso directed Nigerian banks to proactively develop and offer products specifically tailored to meet the unique needs and preferences of  the diaspora community. The NRBVN launch is seen as a major step to keep remittances inflow to the country soaring and dollar liquidity strong.

    BVN enrollment continues surges

    The NIBSS data has shown that the number of Nigerian bank account owners linked to BVN hit 66.2 million at the end of July, 2025.

    The data showed a significant surge from 64.8 million recorded in January 2025 and 63.5 million as at December 2024.

    The data showed that 2.7 million new BVN enrolments were recorded between December 2024 and July 2025.

    Further analysis of the NIBSS data showed that as at 2021, 51.9 million accounts were linked to BVN, it rose to 56 million in 2022, and 60.1 million in 2023 and closed 2024 at 63.5 million.

    According to NIBSS, the BVN gives bank account owners a unique identity that can be verified across the Nigerian banking industry, while it ensures that customers’ bank accounts are protected from unauthorized access.

    The BVN project, which captures the uniqueness of every bank customer, is one of the most-innovative projects introduced into the financial system in 2014.

    How Non-Resident BVN impacts economy

    Cardoso had explained that offering innovative and attractive financial solutions can greatly enhance diaspora participation, deepen financial inclusion, and significantly boost remittance inflows.

    “Over the past year, our policy frameworks have undergone extensive refinements, informed by sustained dialogue with International Money Transfer Operators (IMTOs). The introduction of the willing buyer, willing seller regime, licensing of additional IMTOs, and market reforms that have facilitated currency convergence are notable examples. Consequently, remittance flows through official channels have risen markedly, from $3.3 billion in 2023 to $4.73 billion last year,” he said.

    He added: “With the introduction of NRBVN and complementary policy measures, we are optimistic about achieving our ambitious target of $1 billion in monthly remittance flows, a goal we believe is entirely achievable given the growing trust and convenience in formal remittance channels”.

    Cardoso explained that a fully connected system will ensure that every Nigerian in the diaspora can confidently contribute to national development through trusted and cost-effective channels. He emphasised that the launch was not the final destination, but the beginning of a broader journey.

    “The NRBVN is a dynamic initiative, one that will continue to evolve in response to the needs of its users. It presents a unique opportunity to learn, to innovate, and to adapt. We encourage all stakeholders to engage actively, share insights, and help shape a system that serves millions of Nigerians across geographies and generations. The NRBVN is not just a tool; it is a bridge between Nigeria and its global citizens,” he said.

    He added: “With the introduction of NRBVN and complementary policy measures, we are optimistic about achieving our ambitious target of $1 billion in monthly remittance flows, a goal we believe is entirely achievable given the growing trust and convenience in formal remittance channels.

    “To meet these targets, collaboration and compliance with established regulatory frameworks remain essential. All stakeholders MUST adhere strictly to the FX Code and other relevant regulatory guidelines. This is critical to ensuring market stability, integrity, and overall confidence in Nigeria’s financial system.”

    The CBN boss further invited the IMTOs to integrate with the NRBVN platform as part of a shared vision to build a secure, efficient, and inclusive financial ecosystem for Nigerians globally.

    Cardoso explained that a fully connected system will ensure that every Nigerian in the diaspora can confidently contribute to national development through trusted and cost-effective channels. He emphasised that the launch was not the final destination, but the beginning of a broader journey.

    “The NRBVN is a dynamic initiative, one that will continue to evolve in response to the needs of its users. It presents a unique opportunity to learn, to innovate, and to adapt. We encourage all stakeholders to engage actively, share insights, and help shape a system that serves millions of Nigerians across geographies and generations. The NRBVN is not just a tool; it is a bridge between Nigeria and its global citizens,” he said.

    He reiterated the CBN’s commitment to reducing the cost of remittances, currently averaging over seven percent in Sub-Saharan Africa. Lowering these costs, he stated, will enhance the safety and appeal of formal channels while amplifying the socioeconomic impact of diaspora remittances on Nigerian households and the broader economy.

    Statistics on dollar inflows via IMTOs

    The value of foreign exchange inflows to the economy through the IMTOs rose sharply in 12 months to $4.76 billion, the apex bank’s quarterly statistical bulletin showed.

    The report, which covered inflows in 2024, represents a significant 44.5 per cent increase from the $3.30 billion recorded in 2023. The IMTO inflows continue to be a vital source of foreign currency for Nigeria, supporting families, businesses, and the broader economy amid ongoing FX market challenges.

    The year began with a strong performance in January 2024 as inflows surged 32.5 per cent year-on-year to $390.86 million, compared to $295.21 million in January 2023. This early momentum was maintained in February, with inflows increasing by 67.3 per cent, rising to $326.91 million from $195.23 million the previous year.

    March continued the positive trend, with IMTO inflows hitting $363.76 million in 2024, up 30 per cent from $279.79 million in March 2023. April saw a leap, with inflows reaching $466.11 million, an 83.3 per cent increase from April 2023’s $254.26 million, marking the highest year-on-year percentage growth in the first half of the year.

    May recorded inflows of $404.75 million in 2024, a 45.3 per cent rise compared to $278.54 million the year before.

    June was a relatively flat month-on-month but still strong year-on-year, with inflows at $389.79 million, up 40.2 per cent from $278.04 million in June 2023. July and August were the standout months for IMTO inflows, posting the highest volumes of the year. In July 2024, inflows jumped to $552.94 million, more than double the $240.35 million recorded in July 2023, representing a 130% year-on-year increase.

    August maintained this peak momentum with inflows rising to $585.21 million, a 116 per cent increase from $271.24 million in August 2023.

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    These two months alone accounted for nearly a quarter of the total inflows for the entire year, highlighting their critical role in Nigeria’s FX ecosystem.

    The final four months of 2024 showed a mixed pattern of inflows, reflecting broader economic uncertainties and seasonal effects. September recorded $336.61 million in IMTO inflows, up 40.8 per cent from $238.98 million in the same month of 2023.

    October’s inflows rose modestly to $378.85 million, a 29.1 per cent increase year-on-year. However, November saw a sharp decline, with inflows dropping by 22.1 per cent to $252.28 million from $324.20 million in November 2023.

    December ended the year on a more positive note, with inflows rebounding to $316.59 million, a 9.1 per cent increase compared to $348.33 million in December 2023. The surge in IMTO inflows is closely tied to the reforms introduced by the CBN under Governor Cardoso since his assumption of office in September 2023.

    Impact on diaspora remittances

    According to President, Association of Bureaux De Change Operators of Nigeria, Aminu Gwadabe, there are over 1.24 million Nigerian Migrants abroad and 50 per cent of them live within the African neighbourhood, and the figure is expected to rise in the coming years.

    Gwadabe listed the importance of migrant remittances to the economy to include serving as a lifeline for the recipients small household in the economy and used for health, nutrition, education and societal needs.

    The remittances are also higher than both Foreign Direct Investment and foreign aid flow to the economy and still, are cheaper sources of funds.

    He said that remittances can be used in infrastructural developments as seen in India and Lebanon while in the Dubai UAE, the remittances are stable sources of liquidity in the Market. The remittances, he added, can also serve as an excellent  source of investment funds in the economy  even as it represents 83 per cent of the Federal Government budget in 2018.

    The remittances were 11 times higher than the FDIs in the same period and 7.4 per cent larger than the net official development assistance received in 2017 of $3. 34 billion in the economy.

    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.