From uncertainty to certainty: How Cardoso transformed Nigeria’s financial institution
Since September 22, 2023 when Mr Olayemi Cardoso assuming office as Governor of Nigeria Central Bank, series of meaningful reforms has taken place at the apex Bank and the reforms that have shaping the Nigerian economy, which has witnessed a monumental turnaround in terms of financial stability.
These reforms have earned him public commendation from President Bola Ahmed Tinubu and accolades from international partners, the latest being the “Central Bank of the Year Award” by Central Banking, London. No doubt, Yemi Cardoso and his team have managed the economy, through the Orthodox monetary instruments available to him.
The Nigerian economy was facing severe microeconomic instability, rising inflation, unstable exchange rate and foreign exchange backlog, he took the bold steps to address the crisis bedeviling the economy by introducing some reforms that have shaped the economy today by stabilized the market, attracted foreign direct investment.
Three years down the line, the stronger monetary policy has given birth to institutional overhaul and we are overcoming the era of uncertainty that can’t stand to protect the local economy amidst external threat.
How the policy restored credibility to the foreign exchange.
The multiple exchange rate windows had created unprecedented irregularities, rising inflation
In a decisive move towards transparency, the bank unified multiple exchange rate windows, allowing for the market-driven to determined the rate. To prove Nigeria ‘s financial capacity to the world investors, the Central Bank of Nigeria systemically cleared the $7 billion Foreign Exchange backlog, which resulted to external liquidity
The external reserves improved external reserves to $52 billion, providing up to 10 months of import cover
And net of foreign reserve rocketed from meager $3.99 billion to $40 billion, drastically improving Nigeria’s ability to handle short-term plans and increasing the global investors confidence.
Stronger & more resilient banking system
The Successes recorded in the recapitalisation policy:
The Central Bank of Nigeria (CBN) successfully concluded it’s 24-months Recapitalization program on March 31, 2026, with 33 out of 37 banks meeting the revised minimum capital requirements.
A total fresh capital raised is approximately N46.65 trillion, representing 0.6.1
Locally source capital was about 72.55% , while external source capital stands at 27.45% . The capital adequacy ratios maintained above baseline benchmark.
Strategic implementation of the Recapitalisation
• Improved Asset Quality: Capital injections directly strengthen balance-sheet transparency and absorb potential credit losses.
• Enhanced shock absorption and balance sheet transparency.
• Shift toward risk-based supervision and mandatory stress testing.
• Gradual phase-out of previous regulatory forbearance measures.
• Boosted Economic Capacity: Stronger balance sheets position the banking sector to finance large-scale industrial projects targeting a $1 trillion Nigerian economy by 2030.
• Strong Domestic Confidence: About 72.55% (approx. N3.37 trillion) was sourced locally, demonstrating deep domestic investor trust and liquidity.
On September 16, 2025, the Central Bank of Nigeria (CBN) issued a landmark corporate governance circular introducing strict timelines for the succession of Managing Directors and Chief Executive Officers (MD/CEOs) of Domestic Systemically Important Banks (DSIBs).The framework which imposes two major structural deadlines on DSIBs, such as Access Bank, Zenith Bank, GTBank, UBA, and First Bank to secure leadership continuity in the sector.
The 6-Month Regulatory Approval mandated banks to obtain formal regulatory approval from the CBN for an incoming successor MD/CEO at least six months before the incumbent executive’s tenure officially expires.
The guide line 3-Month Public Announcement of DSIBs policy must publicly disclose and announce the approved successor no later than three months prior to the outgoing CEO vacating the office.
The directive builds upon Section 2.14 of the CBN Corporate Governance Guidelines (2023). Because DSIBs are categorized as “too big to fail” due to their massive footprint in the domestic economy, sudden leadership vacuums or abrupt handovers can trigger sector-wide instability that could lead to major crisis in the sector.
The Central Bank of Nigeria instituted these proactive framework to eliminate market speculation, provide incoming leaders adequate time to prepare, and foster overall institutional resilience.
The Central Bank of Nigeria approved the Bank of Industry’s Non-Interest Banking Window in February 2026 to provide ethical, asset-backed, and risk-sharing financial options. The initiative is introduced to deepen financial inclusion and tap into ethical funding. This is targeted at underserved MSMEs and high-impact industrial projects that can enhance the economy.
The Prohibition of Interest aspect is to replace the conventional interest with asset-backed financing, while promotes shared risk between the institution and the borrower. The asset and Material Financing will directly funds equipment, raw materials, and physical assets through the initiative.
Expected benefits:
Ethical Funding: Attracts investors avoiding traditional interest-based loans.
Inclusivity: Reaches religious or ethically constrained business segments.
Economic Growth: Supports Nigeria’s broader industrial and developmental targets.
Deeper, more transparent foreign exchange market
The launching of the Fourth Edition of the Foreign Exchange Manual on May 15, 2026, by the Central Bank of Nigeria (CBN) which became effective on June 1, 2026, to modernize forex administration and deepen market transparency has gained momentum as it’s distributed free to authorized dealers to replaces the 2018 edition for market-driven operations and liquidity.
The reform has attracted 100% unfettered access to export proceeds for foreign companies, import Advance Payment Upward review of allowable advance payments from 15% to 30%., the tuition Remittances maximum threshold increased from $15,000 to $25,000 per semester (up to two semesters yearly), while turnover growth daily, the FX turnover targeted/reported between $400M–$600M+ under the updated market structure.
The Manual clearly defines International Money Transfer Operators as CBN-licensed entities facilitating cross-border transfers into Nigeria. Their substantive operational obligations continue under the extant International Money Transfer Operator (IMTO) Guidelines.
Notably, the Manual also names “the Public” among market participants. That inclusion confirms a point businesses sometimes overlook. Unlicensed individuals who engage in FX transactions for personal, business or investment purposes carry compliance obligations of their own. Those cover documentation, use of official channels and transaction limits.
The Central Bank of Nigeria (CBN) launched the FX BDC Purchase Tracker (FXBT) in July 2026 to provide real-time oversight of Bureau de Change operations.
This is to improve weekly purchase cap of BDC operators as it face strict limit of $150,000 per week, all licensed BDCs must register and submit real-time or same-day data on the central portal, utilization and resale of unused foreign exchange within 24 hours after the expiry of the utilization period, authorised dealer banks conduct Know Your Customers and enhanced due diligence before fulfilling orders.
The objective is to strengthen compliance, detects multiple bank allocations or diversion of funds outside approved channels, to enhance transparency, eliminates opacity and fragmented reporting via transaction-level tracking, while supporting structured access to dollar supplies via the Nigerian Foreign Exchange Market (NFEM).
The Central Bank of Nigeria (CBN) in March 25, 2026 issued a circular granting International Oil Companies (IOCs) unfettered, immediate access to repatriate 100% of their export proceeds through Authorised Dealer Banks (ADBs) to reverses the 2024 “50/50 rule cash pooling restrictions, removes the mandatory 90-day retention period for half of earnings and the guideline supersedes all prior CBN cash pooling circulars immediately.
The market implication is that, it will boosts confidence of investor and foreign exchange market liquidity and eases capital repatriation friction for upstream oil and gas operators.
Diaspora remittance reform
The Central Bank of Nigeria requires all International Money Transfer Operators (IMTOs) to route all diaspora remittances through designated naira settlement accounts with authorized dealer banks. It requires Naira Accounts be open and maintain designated naira settlement accounts, Exclusive Routing of all remittance inflows must be credited directly into these accounts, Local Payouts Beneficiaries receive disbursements exclusively in naira.
The objective is to enhance traceability and monitoring of foreign exchange flows, boosts official foreign exchange supply to ease market and phases out older, unmonitored or non-bank cash payout channels.
The Cardoso’s reform to strengthened crude-oil export monitoring in mid-2026 by allocating additional terminals to independent pre-shipment inspection agents. This policy aims to improve compliance, track export proceeds, and plug foreign exchange revenue leakages. With the foreign exchange impact improving export proceeds repatriation, stabilizing national foreign exchange reserves.
Transforming Nigeria’s payments ecosystem
The inaugurated the Payments System Vision 2028 (PSV 2028) Project Committee in Lagos on September 9, 2025, by the Central Bank of Nigeria (CBN) to create a secure, inclusive, and globally competitive digital financial framework. The goal of the national assignment led by Mr Musa Itopa Jimoh, Director of the Payments System Policy Department (PSPD) is to building on past milestones, succeeds earlier strategic roadmaps like PSV 2020 and PSV 2025 to deepen financial inclusion, enhance infrastructure interoperability, and drive secure payment innovations.
Payments system vision 2028 launched
The Central Bank of Nigeria launched the Payments System Vision 2028 on June 1, 2026, targeting a 95% financial inclusion rate and near-zero fraud losses by 2028. This would be driven by Infrastructure, inclusion, innovation, cross-border payments, and system integrity, with the guiding principles of interoperability, security, inclusion, innovation, trust, and collaboration. The key support of regional integration of trade under the African Continental Free Trade Area (AfCFTA).
Revised agent banking guidelines
The revised Agent Banking Guidelines released on 6 October 2025 overhaul regulatory oversight, enforcing strict operational controls with a compliance deadline of 1 April 2026 for major structural provisions.
The regulatory change:
Geo-Fencing & Location: POS terminals must be technologically tagged to operate exclusively within an agent’s registered physical premises starting 1 April 2026 with a restriction to working with only one financial institution (Principal), ending the multi-affiliation model from 1 April 2026, in transaction control, Imposes defined transaction thresholds and limits to curb fraud and misuse of non-designated accounts.
It Shifts strict accountability and board-level liability directly to the licensed financial institutions for agent compliance breaches. The principals are mandated to publish and display updated registers of their authorized agents online and across physical branches.
The Instant-Payment Security Guidelines of the Central Bank of Nigeria implemented to enhanced instant-payment security guidelines on July 1, 2026, to curb electronic fraud and improve customer control.
Stronger consumer protection, fraud & cybersecurity
The Central Bank of Nigeria (CBN) revised its cash policy effective January 1, 2026, setting individual weekly withdrawal limits at ₦500,000 and corporate limits at ₦5 million while removing all restrictions and fees on cash deposits. Setting the ₦500,000 Weekly Limit (Individuals): Max cash withdrawal across all channels combined, ₦5,000,000 Weekly Limit (Corporates) Max cash withdrawal across all business channels. 3% & 5% Excess Fees: Charges on withdrawals above individual (3%) and corporate (5%) caps.
The bank in another development in November 27, 2025 directed banks, payment service banks, and financial institutions to immediately withdraw non-compliant or misleading advertisements, this is secure thematic industry review found widespread inconsistencies in marketing disclosures, exaggerated benefits, obscured risks, and unaudited financial, this measures are applies to deposit money banks, payment service banks, and other financial institutions.
The Central Bank of Nigeria (CBN) further directed banks to reduce electronic fraud response times to under 30 minutes, leveraging Bank Verification Number (BVN) and National Identification Number (NIN) data by migrating to ISO 20022 for real-time transaction traceability. This can be achieved in real-time access to mobile network data via NCC agreements to catch SIM swaps early.
The implemented stricter Bank Verification Number (BVN) regulations on May 1, 2026, to combat digital fraud and SIM-swap scams. The policy is that, you can change your BVN-linked phone number only once in your lifetime, mobile banking apps are now restricted to one active device at a time and transactions on newly activated devices are capped at ₦20,000 for the first 24 hours and any suspicious BVNs face a 24-hour temporary restriction while banks verify activity, that is because BVN database access is strictly limited to CBN-licensed financial institutions.
The deployment of the Cybersecurity Self-Assessment Tool (CSAT) on March 30, 2026, by Central Bank of Nigeria to evaluate and strengthen cyber resilience across regulated financial institutions. The measure is applicable to entities like Payment Service Banks, Microfinance Banks, Payment Service Providers, Finance Companies, and Development Finance Institutions, with compliance deadlines of 3 weeks from March 30, 2026 for Deposit Money Banks and 5 weeks for Other Regulated Institutions from March 30, 2026.
The Central Bank of Nigeria (CBN) issued landmark Baseline Standards for Automated AML/CFT/CPF Solutions on March 10, 2026, requiring all regulated financial institutions to adopt real-time, technology-driven financial crime monitoring, with core aim at shifting from manual, paper-based compliance to intelligent, real-time detection, The technology scope mandates AI and machine learning integration across 12 capability areas to reduce false positives and it covers Deposit Money Banks, fintechs, mobile money operators, and payment service providers.
Modernising Nigeria’s financial market
The Central Bank of Nigeria launched the Nigerian Overnight Financing Rate (NOFR) on April 17, 2026, as a new transaction-based benchmark to measure actual interbank overnight funding costs.
NOFR is transaction-based overnight secured interbank financing rate, to developed with the Financial Markets Dealers Association (FMDA).
The bank began a phased operational overhaul in late 2025 to assume direct control over fixed-income trading platforms and end-to-end settlement processes, to centralize oversight that will improve monetary policy transmission and market transparency and migrated operations from private platforms like FMDQ to CBN-managed systems (such as RTGS and S4)
The Central Bank of Nigeria (CBN) overhauled its liquidity framework on August 12, 2026, removing punitive restrictions on its Discount Window and expanding Open Market Operations (OMO) participation to deepen the financial markets and improve policy transmission. With this development, banks accessing the Standing Lending Facility (SLF) no longer lose trading rights in the Nigerian Foreign Exchange Market (NFEM) or primary government auctions. The strategy is designed to dismantle borrowing stigma, ease liquidity friction, and ensure the Monetary Policy Rate (MPR) effectively anchors market interest rates.
Stronger reserves & financial stability
The Central Bank of Nigeria (CBN) added locally sourced gold refined to international standards to its foreign reserves, bringing total gold holdings to $3.5 billion. Managed by the Solid Minerals Development Fund (SMDF) through the National Gold Purchase Programme. This is a shifts reliance away from conventional foreign currency assets, by incorporating domestic artisanal and small-scale miners into a formal, responsible sourcing framework
Nigeria’s external reserves reached approximately $54.08 billion as of early September 2026, representing a peak not seen since December 2008, highest reserve level recorded in nearly 18 years. The core driver is the improved liquidity and clearer pricing mechanisms, increased portfolio and non-oil capital subscriptions, steady production outputs and supportive global energy realizations.
The economic implications is that, it provides a robust buffer exceeding 12 months of import requirements, currency stability reduces near-term volatility pressures on the Nigerian Naira and it reinforces the investor confidence as a result of broader structural advancements, aligning with global market.
