Three years after assuming the helm as governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso has steered the institution through a profound transformation, reasserting its role as a pillar of macroeconomic stability. The CBN, once grappling with credibility crises, has reoriented its focus toward orthodox monetary policy, foreign-exchange market reforms, and stricter banking supervision. These efforts have yielded measurable results, including a surge in foreign reserves, a more stable naira, and a marked decline in inflation. Yet, as Nigeria transitions from stabilization to growth, the limitations of monetary policy in addressing structural economic challenges have become increasingly apparent.
Cardoso’s tenure has been defined by a return to fiscal discipline and institutional accountability. Upon taking office in 2023, he outlined a 10-point agenda emphasizing compliance with the CBN Act, monetary stability, and the withdrawal from quasi-fiscal interventions. This reset extended to internal governance, with a focus on corporate accountability and transparency. By 2025, the CBN’s reforms had earned Nigeria a critical milestone: its removal from the Financial Action Task Force’s (FATF) grey list, a testament to improved anti-money-laundering frameworks and regulatory oversight.
One of the most visible achievements has been the overhaul of Nigeria’s foreign-exchange (FX) market. The previous system, characterized by multiple exchange rates and administrative allocations, was replaced with a market-oriented framework. The introduction of the Electronic Foreign Exchange Matching System (EFEMS) and the Nigerian FX Code aimed to enhance transparency and price discovery. Cardoso described the shift as eliminating “huge distortions” that had plagued the economy, allowing businesses to make more informed investment decisions. The naira’s strength in both official and parallel markets—reaching the N1,300s per dollar—reflects the success of these reforms.
The CBN’s foreign-exchange reforms have also bolstered Nigeria’s international reserves, which reached $55.25 billion as of September 18, 2026—the highest level in 18 years. This reserve buffer, sufficient to cover 11.3 months of imports, has provided the CBN with greater flexibility to manage market stress and external obligations. The IMF acknowledged the progress, noting that “strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience.” However, the sustainability of these gains hinges on factors like oil production, export earnings, and fiscal discipline.
Monetary tightening has been another cornerstone of Cardoso’s strategy. The CBN raised its policy rate to 27.5% to curb inflation, which had peaked at over 20% in 2024. By September 2026, the Monetary Policy Rate (MPR) had been reduced to 23%, signaling a gradual easing cycle. The central bank emphasized that this adjustment aimed to align the MPR with money-market rates rather than signal a shift in its restrictive stance. The World Bank praised the progress, citing improved inflation, external balances, and FX stability as key indicators of macroeconomic recovery.
The CBN’s banking sector recapitalization program, spanning 24 months, saw 33 of 37 licensed banks meet new capital thresholds. Collectively, banks raised N4.65 trillion, with 72.55% from domestic investors. Muda Yusuf of the Centre for the Promotion of Private Enterprise described the exercise as “orderly, non-disruptive, and confidence-enhancing.” However, experts caution that recapitalization alone cannot guarantee increased lending or investment; the real test lies in how banks deploy their enhanced capital.
Cardoso’s retreat from quasi-fiscal interventions has also been significant. The CBN had previously financed government operations through ways and means advances, accumulating N23.7 trillion in liabilities. By 2023, most of this debt was securitized, shifting responsibility to fiscal authorities. This move, according to Abdullahi Sani, CBN deputy governor, “restores the CBN’s core mandate of monetary and financial stability.” It also places greater onus on the federal government to fund operations through revenues and structured borrowing.
Payment-system reforms have further strengthened Nigeria’s financial infrastructure. The CBN’s Payments System Vision 2028 aims to enhance interoperability, security, and digital inclusion. By 2024, over 11.2 billion electronic transactions worth N1.07 quadrillion were processed, reflecting the rapid expansion of digital finance. Sani called this “remarkable,” underscoring the CBN’s role in enabling a modern, resilient financial ecosystem.
Despite these achievements, the CBN’s influence is limited in sectors like agriculture and energy. Food inflation remains a supply-side challenge, exacerbated by insecurity, poor infrastructure, and high input costs. The World Bank links inadequate transport networks to farmers’ limited access to markets, highlighting the need for fiscal and state-level interventions. Similarly, unreliable electricity hampers manufacturing and small businesses, requiring investment in power generation and distribution.
The IMF has emphasized the need for stronger fiscal management, noting Nigeria’s 4.4% consolidated government deficit in 2025 and the high share of revenue absorbed by interest payments. Paul Alaje of SPM Professionals argues that fiscal authorities must complement the CBN’s work by ensuring timely budget execution and financing critical sectors. “Stability is not an end in itself,” he said. “It must drive prosperity, empowerment, and poverty reduction.”
The CBN’s stabilisation efforts have created a foundation for growth, but sustained progress depends on addressing structural bottlenecks. The World Bank’s April 2026 Nigeria Development Update stresses the need to leverage reforms for inclusive growth, human-capital investment, and productivity. This includes improving agricultural productivity, reducing transport costs, and diversifying the economy beyond oil. “The next chapter is execution,” said Alaje, underscoring the shift from monetary to fiscal priorities.
Cardoso’s legacy is clear: he has repaired the “monetary plumbing” of Nigeria’s economy, restoring credibility and stability. However, the unfinished work now lies with fiscal policymakers, state governments, and institutions responsible for infrastructure, energy, and agriculture. As the CBN’s role evolves, the challenge is to ensure that macroeconomic stability translates into tangible improvements in livelihoods and economic resilience.
The CBN’s achievements over the past three years demonstrate the power of disciplined policy and institutional reform. Yet, as Nigeria moves beyond stabilization, the true test will be whether fiscal authorities can build on this foundation to address the deeper challenges of productivity, poverty, and economic diversification. The saddle is shifting, and the next chapter of Nigeria’s economic story will depend on coordinated action across all sectors.
The CBN’s reforms have not only stabilized the economy but also set a precedent for institutional accountability and transparency. As the central bank continues to refine its policies, the focus must now turn to ensuring that these gains are sustained and expanded through collaborative efforts with fiscal authorities and private-sector stakeholders.
The path forward requires a delicate balance between monetary discipline and fiscal innovation. While the CBN has laid the groundwork for stability, the broader economic transformation will depend on the ability of policymakers to address the structural challenges that underpin Nigeria’s development. This includes investing in infrastructure, enhancing agricultural productivity, and creating an environment conducive to private-sector growth.
As the CBN’s three-year milestone approaches, the narrative shifts from what the central bank has achieved to what remains to be done. The next phase of Nigeria’s economic journey will be defined by the ability of all stakeholders to translate stability into sustainable growth, ensuring that the gains of the past three years are not squandered but built upon for the benefit of all Nigerians.
The CBN’s transformation under Cardoso has been a testament to the power of strategic leadership and institutional reform. However, the true measure of success will be the extent to which these reforms contribute to a more prosperous, inclusive, and resilient Nigerian economy. The next chapter is not just about maintaining stability but about creating the conditions for long-term growth and development.
The journey of the CBN under Cardoso has been one of resilience and reinvention. As the central bank continues to navigate the complexities of a dynamic economy, its role will remain critical in shaping Nigeria’s future. Yet, the ultimate success of these efforts will depend on the collective commitment of all sectors to drive the nation toward a more stable, equitable, and prosperous future.