The reforms instituted by the Central Bank of Nigeria (CBN) in the foreign exchange (FX) market continue to yield the desired results, with the latest of such being the ongoing reactivation of international transactions on their naira-denominated debit cards by the country’s banks, which is bringing great benefits to travelers and businesses, reports Ibrahim Apekhade Yusuf
Clearly, before the Olayemi Cardoso-led management team of the Central Bank of Nigeria (CBN) assumed office in October 2023, one of the biggest challenges that the country’s economy was grappling with was forex scarcity.
To deal with the challenge, businesses and travelers had to resort to the parallel FX market to source for funds, a situation which allowed FX speculation to thrive. Thus, one of the first key major steps that the CBN, led by its Governor, Cardoso, took in 2023, was to embark on a series of bold reforms to attract more foreign capital to the economy, achieve price and exchange rate stability.
Specifically, the apex bank liberalized the foreign exchange market, stopped central bank financing of the fiscal deficit, resulting in increased investor confidence in the Nigerian economy and allowing the country to successfully return to international capital markets last December and being upgraded by rating agencies.
Also, the implementation of the reforms has significantly boosted the nation’s FX reserves as well as liquidity in the Fx market. Banks resume use of naira debit cards for international transactions Indeed, reflecting the rising dollar liquidity, Nigerian banks recently started lifting the over three-year moratorium on the use of naira-funded debit cards abroad.
For instance, three Tier-1 banks and a mid-tier bank, United Bank for Africa (UBA) Plc, FirstBank, GTBank and Wema Bank Plc respectively, have announced the resumption of international transactions on their naira debit cards. Thus, in a notice to customers, UBA said the resumption aligns with its continued commitment to providing clients with seamless and enhanced banking experiences.
“In line with our continued commitment to providing you with seamless and enhanced banking experiences, we are pleased to inform you that all UBA Premium Naira Cards, including Gold, Platinum, and World variants are now enabled for international transactions,” the bank said.
“This means you can now use your Premium Naira Card for everyday payments, online shopping, POS, and ATM transactions across the world, with more ease and flexibility. “If you haven’t used your card recently, now’s a great time to rediscover the convenience and prestige that comes with being a UBA premium cardholder.
Also in a recent statement, Wema Bank said customers can now “pay in dollars” with their naira cards. “Your Wema Naira Mastercard just went global! Now you can pay in dollars on all your favourite international platforms; Amazon, eBay, AliExpress? Netflix, Spotify, YouTube,” the bank said.
Similarly, in an emailed note to its customers, FirstBank said its Naira Mastercard can now be used for international transactions. “Shop online or spend up to $500 every month on your preferred channel seamlessly,” the bank said. For its part, Guaranty Trust Bank pegged its quarterly transaction limits across different channels at $1,000 for online and PoS transactions while ATM transactions are limited to $500.
Commenting on the development in a report, Head of financial institutions ratings at Agusto & Co, Ayokunle Olubunmi, said the improved liquidity in the FX market supported banks’ decision to reactivate their naira cards for global transactions. “The moderating premium on the parallel market transactions and the reduced arbitrage opportunities is also responsible for the decision,” he said.
Analysts said that by allowing travelers and owners of businesses use their naira-cards abroad, the banks are making it easy for cardholders to pay their hotel bills, make reservations and carry out other transactions using their naira debit cards.
Surge in forex inflow Further highlighting the rising dollar liquidity, an analysis of FX inflows in the last few months showed that Nigeria attracted $5.96 billion monthly inflows from May 2025 till date. Industry reports indicate that Nigeria’s foreign exchange market witnessed a significant boost in May, with total inflows rising by 62.0 per cent month-on-month (M-o-M) to $5.96 billion, driven largely by increased participation from domestic and foreign investors.
This marked one of the highest inflow levels in recent months and signals improving market sentiment amid macroeconomic reforms and a relatively stable naira.
Diaspora remittances to Nigeria, estimated at $23 billion annually, remain a reliable source of forex to the domestic economy
In an emailed note to investors, analysts at Financial Derivatives Company Limited (FDC) attributed rising FX inflows to a surge in oil prices and multiple inflow channels created by the CBN. Particularly, the apex bank, has in recent months, activated multiple FX sources to increase dollar inflows, boost dollar access to manufacturers and retail end users and support naira recovery across markets.
From measures to improve diaspora remittances through new product development, the granting of 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 CBN has simplified dollarinflow channels for authorized dealers and other players in the value chain.
FX reserve accretion
The rising forex liquidity has equally impacted positively on the country’s dollar buffers as Cardoso, recently, announced a quantum leap in the Net FX Reserve (NFER) position at $23.11 billion at the end of last year. According to the apex bank data, NFER stood at $23.11 billion, the highest level in over three years, a marked increase from $3.99 billion at year-end 2023, $8.19 billion in 2022, and $14.59 billion in 2021.
The NFER, which adjusts gross reserves to account for near-term liabilities such as FX swaps and forward contracts, is widely regarded as a more accurate indicator of the foreign exchange buffers available to meet immediate external obligations. According to Cardoso, the increase in reserves reflects a combination of strategic measures undertaken by the CBN, including a deliberate and substantial reduction in short-term foreign exchange liabilities – notably swaps and forward obligations.
He noted that the strengthening was also occasioned by policy actions to rebuild confidence in the FX market and increase reserve buffers, along with recent improved foreign exchange inflows – particularly from non-oil sources. The result is a stronger and more transparent reserves position that better equips Nigeria to withstand external shocks.
The expansion occurred even as the CBN continues to reduce short-term liabilities, thereby improving the overall quality of the reserve position. “This improvement in our net reserves is not accidental; it is the outcome of deliberate policy choices aimed at rebuilding confidence, reducing vulnerabilities, and laying the foundation for long-term stability,” Cardoso stated, adding: “We remain focused on sustaining this progress through transparency, discipline, and market-driven reforms.”
In fact, New Telegraph’s findings show that the reserves have continued to strengthen in 2025. While the first quarter figures reflected some seasonal and transitional adjustments, including significant interest payments on foreign-denominated debt, underlying fundamentals remain intact.
Also, analysts expect the reserves to continue improving over the second quarter of this year. With foreign capital inflows into the domestic economy being key elements in the drive to achieve monetary and fiscal policy stability, the CBN has said that it is cultivating more sources of FX to increase dollar inflows, boost access to manufacturers and retail end users.
In a recent chat with journalists, President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said the CBN’s forex measures showed the level of creativity, policy and hard work that the Cardoso-led apex bank puts into ensuring that more forex flows into the economy and remain accessible to businesses. He said diaspora remittances to Nigeria, estimated at $23 billion annually, remain a reliable source of forex to the domestic economy.
e-Naira set for return
The CBN says it is working on reviving the eNaira project as it reaffirms its commitment to building trust and expanding digital financial services access in the country.
Nigeria’s Central Bank Digital Currency, eNaira, was launched in October 2021 as one of the country’s initiatives to drive financial inclusion, but its acceptance level remained very low. The apex bank attributed the low acceptance and use to poor awareness on its operations, reaffirming commitment to reviving the payment infrastructure.
Speaking during the CBN Fair held in Lagos, with theme: “Driving Alternative Payment Channels as Tools for Financial Inclusion, Growth and Accelerated Economic Development” Branch Controller, Central Bank of Nigeria, Lagos, Sunday Daibo, said the apex bank is taking steps to ensure more people are brought into the digital payment network.
He said: “In a world where technology is reshaping economies and redefining how people interact with financial services, alternate financial services have emerged not as an option, but as a necessity. They are the bridges connecting the underserved populations to the formal financial system,” he said.
“ Today’s gathering brings together policy makers, financial institutions, FinTech innovators, merchants and the public, all stakeholders in a single mission to make financial access to the person and to ensure that every Nigerian, regardless of location or status, can participate in and benefit from our nation’s economic project progress.
“Over the years, we have seen our mobile money platforms, agency banking networks, USSD services, internet banking contracts, contactless payments, central bank digital currency and, most recently, open banking, have broken the barriers of distance costs and complexity. These channels are more than just tools for transaction. They are instruments for empowerment,” he said.
He described the programme as a celebration of Nigeria’s collective commitment to economic stability, financial inclusion and national development.
Also speaking, CBN Acting Director, Corporate Communications Department, Mrs. Hakama Sidi Ali, said the Management of the CBN, under the leadership of Olayemi Cardoso, is committed to stimulating productivity and financial inclusiveness as well as delivering on its core mandate of monetary and price stability.
This has resulted in significant increase of inflow in foreign investments, positive trade balances and quantum leap in financial inclusion rate in recent times.
She said: “Over the past 22 months, the CBN has, among others, rolled out exchange rate unification policy to minimize arbitrage opportunities and reduce volatility in the foreign exchange market and cleared over $7 billion of verified backlog of FX forwards”.
She explained that the launch of Nigeria Foreign Exchange (FX) Code has improved governance in the forex market management, adding that the ongoing recapitalisation of banks will strengthen the resilience and global competitiveness of the banking sector, positioning it to support the $1 trillion dollar economy.
Ali said the core objective of this engagement, therefore, is to sensitize members of the public on how the bank’s policies and innovations can enhance their lives and livelihood and contribute to the growth and development of the Nigerian economy.
She explained that as a means of protecting banks’ customers and ensuring that they are not short-changed, the CBN launched the Unified Complaints Tracking System (UCTS), aimed at streamlining and improving the management of consumer complaints against financial institutions. The system, alongside a USSD code (*959#) for verifying licensed institutions, enhances transparency and consumer protection in the Nigerian financial sector.
“The core objective of this engagement, therefore, is to sensitize members of the public on how the Bank’s policies and innovations can enhance their lives and livelihood and contribute to the growth and development of the Nigerian economy,” she said.
She said the CBN will continue to ensure availability of clean currency. “We, however, urge you to see the Naira as our critical symbol of national identity. Respect and keep it clean. Do not spray, hawk, mutilate or counterfeit the Naira,” she advised.
Other stakeholders insisted that at the heart of the CBN strategy is its commitment to maintaining economic stability.
