Definitely, probably the most seen signal of renewed confidence in Nigeria’s financial system is the transformation of the FX market. FX reforms pushed by the Central Financial institution of Nigeria (CBN) attracted overseas capital inflows price US$20.98 billion within the first 10 months of 2025. This represents 70 per cent enhance over whole inflows for 2024 and a 428 per cent surge in comparison with the US$3.9 billion recorded in 2023. CBN Governor, Olayemi Cardoso says the surge in FX inflows mirror a transparent resurgence in investor confidence within the financial system and expects better milestones within the months forward.
The continuing surge in foreign exchange inflows into the financial system, is an indication of monetary sector stability and rising traders’ confidence within the home financial system.
Already, the monetary markets is witnessing curiosity in Nigeria belongings from home and international traders, as seen within the newest capital inflows to the nation.
The rising traders’ curiosity is linked to fallout of essential reforms instituted by the Central Financial institution of Nigeria (CBN) beneath the Olayemi Cardoso management.
Upon assuming workplace in October 2023, the apex financial institution management had prioritised reforms to rebuild Nigeria’s financial buffers and strengthen resilience.
CBN’s insurance policies, together with the foreign money reforms, led to funding inflows from overseas, and lowered interventions within the home foreign exchange market.
The unification of alternate charges and the clearing of over $7 billion FX backlog raised the nation’s funding outlook, with multilateral organizations, just like the World Financial institution describing it as daring intervention to enhance the financial system’s sustainability in the long term.
Additionally, Nigeria’s sovereign threat unfold has fallen to the bottom stage since January 2020, erasing the premium gathered through the pandemic and subsequent pressure on its financial system. All these are deliberate efforts to woo traders and maintain capital inflows to the financial system.
CBN Governor, Olayemi Cardoso defined that over the previous yr, the apex financial institution has sustained the unification of the a number of alternate‑price home windows.
He mentioned that at current, the as soon as‑crippling multi-billion greenback FX backlog has been absolutely cleared, restoring credibility and giving companies the boldness to plan.
Overseas capital inflows reached US$20.98 billion within the first ten months of 2025, a 70% enhance over whole inflows for 2024 and a 428% surge in comparison with the US$3.9 billion recorded in 2023, reflecting a transparent resurgence in investor confidence.
The journey thus far
Cardoso mentioned story of Nigeria’s financial restoration can’t be appreciated with out first recalling the place “we began, as a result of the reforms of as we speak are borne out of a dedication to alter the situations we met”.
“When this management crew assumed workplace, our financial system confronted extreme macroeconomic distortions. Inflation was surging. FX liquidity had evaporated. Exterior reserves had been non-existent . Belief in financial administration had weakened. Unorthodox financial practices had eroded confidence. Companies couldn’t plan or worth. Traders couldn’t commit.”
Persevering with, he mentioned: “The overseas alternate market was in paralysis. A backlog of over US$7 billion in unmet FX obligations undermined market integrity. The unfold between official and parallel market charges had blown out to greater than 60 per cent, creating distortions and hire‑in search of alternatives.”
“Excessive inflation had develop into normalised, caught in double digits for many of the final 35 years and risen to 34.6% as of November 2024. Meals costs had been crippling households. Liquidity situations had been unstable. Many companies confronted an existential risk”.
Additionally, the banking sector, although essentially sound, was liable to being dragged into misery by a deteriorating macro setting and inconsistent coverage indicators.
“This was the Nigeria we inherited, not one standing on the fringe of a macroeconomic precipice, however one which had already gone over the cliff. You will need to recall this not for drama, however for context: the progress we cautiously acknowledge as we speak is significant solely when measured in opposition to the depth of the challenges that got here earlier than it,” he mentioned.
Learn additionally: Cardoso says Nigeria’s foreign reserves hit $46.7bn, highest level in nearly seven years
Reaching financial turnaround
In response to Cardoso, over the previous 12 months, Nigeria’s financial system has transitioned from disaster administration to laying the groundwork for a sustainable restoration.
“After almost a decade through which actual GDP progress averaged about 2%, reforms have restored momentum and confidence in our broad macroeconomic setting. Our financial system grew by 4.23% within the second quarter of 2025, the strongest tempo in 4 years, pushed by enhancements in telecommunications, monetary companies, and oil manufacturing,” he mentioned.
“Extra importantly when it comes to long-term stability, inflation, whereas nonetheless excessive, has moderated constantly. From a peak of 34.6% in November 2024, it has greater than halved to 16.05 per cent in October 2025. This marks seven consecutive months of disinflation. Meals inflation, the most important single element 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 mentioned.
This important, regular decline in inflation is restoring actual buying energy for households and companies. It additionally demonstrates disciplined execution and Nigeria’s return to orthodox financial coverage.
“We proceed with dedication to convey inflation down additional. The present double-digit price can’t be acceptable. Worth stability is the muse of sustainable progress. Our transition to an inflation‑concentrating on framework is gaining traction. Now we have improved knowledge analytics, strengthened communication, and ended financial financing of fiscal deficits. These actions have strengthened financial coverage transmission and anchored expectations”.
“Our fashions challenge continued disinflation in 2026, helped by stronger home manufacturing, improved FX liquidity, and extra disciplined liquidity administration. As inflation moderates and turns into firmly anchored, we’ll calibrate the coverage price in step with evolving knowledge”.
“Home and worldwide observers alike have famous Nigeria’s “enormous turnaround” in macroeconomic administration. Our dedication stays clear: financial coverage will keep evidence-based, data-driven, and unwavering in its pursuit of worth stability”.
Larger, stronger rebased GDP
Nigeria’s hope of reaching $1 trillion financial system by 2030 will achieve important assist from the banking sector.
Nigeria’s Statistician-Normal, Adeyemi Adeniran, had defined how the financial system fared within the rebased Gross Home Product (GDP) report. He mentioned: “In nominal phrases, the rebased GDP for 2019 stood at N205.09 trillion N213.63 trillion in 2020, N243.30 trillion in 2021, N274.23 trillion in 2022, N314.02 trillion in 2023, and N372.82 trillion in 2024”.
The NBS famous that in 2019, the rebased nominal GDP at fundamental costs represented a rise of 41.7 per cent over the nominal GDP of 2019 of the previous base yr (2010), 39 per cent in 2020, 38.7 per cent in 2021, 36.1 per cent in 2022, 34.6 per cent in 2023 and 35.4 per cent in 2024.
“The outcomes present that the construction of the Nigerian financial system has modified considerably with an increase within the share of agriculture and companies sectors and a fall within the share of the industries sector in nominal phrases, indicating a shift within the construction of the Nigerian financial system than earlier reported,” the NBS mentioned.
Adeniran additional defined that the rebasing permits the nation to higher mirror the realities of the financial system. “It’s not nearly an even bigger quantity however about correct, well timed knowledge that helps smarter coverage and financial planning,” he mentioned.
Banking sector contributions
A well-recapitalised banking sector is undeniably essential for the expansion of the home financial system. Therefore, Olayemi Cardoso, Central Financial institution of Nigeria (CBN) governor, suggested banks to arrange for a brand new spherical of recapitalisation to make sure they’ve the required capital to assist the Federal Authorities’s plan to attain $1 trillion Gross Home Product (GDP) goal by 2030.
He mentioned that President Bola Ahmed Tinubu’s financial plan goals to achieve a $1 trillion GDP by 2030, emphasising that the present financial institution capitalisation is inadequate to assist such a big financial scale.
Cardoso requested: “Will Nigerian banks have adequate capital relative to the monetary system’s wants in servicing a $1 trillion financial system within the close to future? In my view, the reply is “No!” except we take motion. That motion was the continued recapitalisation of banks, meant to arrange them for enlargement and appeal to huge ticket transactions to assist financial progress”.
The Coverage Advisory Council report on the nationwide financial system, had set an bold purpose of reaching a GDP of $1 trillion, with clearly outlined precedence areas and techniques.
Adeniran revealed that integrated new and rising sectors, consumption baskets replace, and knowledge assortment refining strategies helped produce a extra full image of nationwide output.
Aliyu Ilias, developmental economist, famous that a number of sectors have beforehand remained un-captured in official knowledge, significantly leisure. “By rebasing our GDP now, included these areas correctly. This new visibility will make Nigeria seem a lot stronger to overseas traders, which can naturally assist us appeal to extra capital,” he mentioned.
He defined that the train may also reveal untapped financial potential and information authorities useful resource allocation. “It’ll present the place we’re strongest structurally, equivalent to in mining or different rising sectors. That perception will assist the federal government focus its efforts extra strategically.”
“Lastly,” he added, “it can assist financial coverage formulation, serving to us align our technique with the truth on the bottom. We’ll know precisely the place to place extra effort.”
Ilias defined that whereas this statistical adjustment doesn’t immediately generate new income, it creates a extra dependable framework for fiscal planning, funding methods, and improvement interventions.
For him, by aligning financial knowledge with present realities, the federal government and personal sector can extra successfully goal insurance policies that stimulate job creation, enhance productiveness, and maintain long-term progress.
Seun Onigbinde, director of Civic Expertise Group BudgIT, mentioned the earlier rebasing underscored the substantial impression of coverage adjustments within the companies and ICT sectors, equivalent to telecommunications deregulation and banking sector recapitalisation. “Rebasing of the GDP should mirror adjustments within the financial system, that are a product of public insurance policies over time,” he added.
Rebasing can be important for home coverage. It permits the federal government to higher assess tax assortment effectivity, measure sectoral contributions, and design social programmes which can be data-driven and results-oriented.
Gabriel Okeowo, nation director for BudgIT, mentioned, “Rebasing permits planners to be extra intentional about fixing Nigeria’s greatest issues: poverty, infrastructure gaps, and job creation.”
Lagos-based economist, Nelson Adedeji, defined that regardless of the bump in GDP measurement, the rebasing by no means a silver bullet.
“We should acknowledge that real financial progress extends past statistical changes. For strange Nigerians to expertise significant enchancment in dwelling requirements, the President Bola Tinubu administration should complement GDP rebasing with substantive insurance policies addressing infrastructure deficits, safety challenges, agricultural productiveness, manufacturing capability, and the general ease of doing enterprise,” he said.
Views from stakeholders
Whereas US President Donald Trump’s widening commerce conflict has taken rising markets on a wild experience, Nigeria has quietly held its personal, attracting overseas capital reassured by foreign money reforms and different measures designed to revive the financial system of Africa’s most-populous nation.
“Nigeria seems to be again in enterprise as long-awaited financial reforms take form,” mentioned Emre Akcakmak, portfolio supervisor at East Capital. Key measures embody improved foreign money liquidity, leeway for traders to repatriate their revenue, and the steady naira.
“We really feel the Central Financial institution of Nigeria will proceed to stem any sharp appreciation of the naira to restrict revenue taking from the quick cash neighborhood,” Akcakmak mentioned.
“Portfolio inflows have possible been supported by improved confidence amid key structural reforms, higher FX market functioning and moderating dollar-naira volatility, in addition to the still-robust nominal yield buffer,” mentioned Samir Gadio, head of Africa technique at Normal Chartered Plc informed Bloomberg.
“Moreover, Nigeria’s native market is seen as much less correlated with international threat situations than extra liquid EM friends,” he mentioned.
The Nigeria’s financial system and companies may have so many issues to cheer in 2025 and the impression of the financial reforms in FX market, alternate and large budge outlays start to repay for them.
Nwadike, a monetary analyst, writes from Abuja
