The Central Bank of Nigeria, CBN, says its foreign exchange reforms and banking sector recapitalisation have strengthened the country’s financial system and improved market stability.
The CBN Deputy Governor, Corporate Services, Dr Muhammad Abdullahi, disclosed this on Tuesday at the 38th Seminar for Finance Correspondents and Business Editors Association of Nigeria, FICAN, in Abuja.
The seminar was themed “Towards a Robust and Resilient Financial System in the Banking Sector Recapitalisation Era.”
Abdullahi said the CBN financial reforms were introduced against the backdrop of significant economic challenges inherited by the current leadership of the apex bank in 2023.
According to him, the measures were designed to restore stability, rebuild confidence and refocus the CBN on its core mandate.
Abdullahi said Nigeria’s foreign exchange market was heavily administered and fragmented in 2023, with multiple trading windows operating alongside a parallel market.
He said the difference between official and parallel market exchange rates averaged more than 60 per cent in 2022 and exceeded 100 per cent at certain periods.
“The World Bank estimated that the implicit subsidy from the exchange-rate regime cost Nigeria about three per cent of GDP in 2022.
“Net usable foreign reserves stood at 859 million dollars in the second quarter of 2023 after accounting for identified short-term obligations.
“The outstanding foreign exchange forward claims exceeded seven billion dollars, further increasing uncertainty for businesses and investors,” he said.
The deputy governor also said Ways and Means financing had reached N26.6 trillion by 2023, while legacy development finance exposures exceeded N10 trillion.
He said the resulting liquidity pressures made inflation more difficult to contain and weakened monetary policy transmission.
In response, the CBN consolidated existing foreign exchange windows in June 2023 and removed restrictions affecting 43 categories of imports.
The bank also reviewed outstanding foreign exchange claims and settled valid claims worth more than $5 billion.
According to Abdullahi, new foreign exchange trading and reporting rules were subsequently introduced to improve market transparency.
The apex bank also introduced an electronic foreign exchange matching system for interbank transactions and established the Nigeria FX Code.
Abdullahi said the reforms had contributed to greater stability in the foreign exchange market.
He said the average gap between official and parallel market rates fell from 68.2 per cent between January and May 2023 to less than two per cent currently.
He added that foreign exchange inflows had become more diversified, with autonomous sources accounting for $7.3 billion of the $10.8 billion recorded in July.
Remittances through international money transfer operators also reached $950 million in July, while gross external reserves rose to $55.6 billion as of September 11.
The deputy governor said inflation, which peaked at 34.8 per cent in December 2024, moderated to 15.43 per cent in July 2026.
He also said real GDP grew by 4.43 per cent in the second quarter of 2026, driven largely by non-oil activities.
Abdullahi, however, acknowledged that these improvements had not eliminated pressures facing households and businesses.
On banking sector recapitalisation, Abdullahi said 33 banks had met the revised minimum capital requirements and raised N4.65 trillion by the end of the two-year programme.
He said stronger capitalisation was necessary to support Nigeria’s ambition of building a $1 trillion economy by 2030.
According to him, well-capitalised banks would be better positioned to finance infrastructure, industrial expansion and international trade while maintaining stronger buffers against economic shocks.
He added that banks must strengthen corporate governance, internal controls and risk management alongside increased capital.
The CBN would continue monitoring governance, asset quality, liquidity and large exposures across the banking sector, he said.
Abdullahi also stressed the importance of cybersecurity, data protection, disaster recovery and business continuity as digital financial services expand.
The deputy governor said the benefits of recapitalisation should extend beyond stronger bank balance sheets to improved services and increased productive lending.
He urged banks to provide appropriate financing for agriculture, manufacturing, services and infrastructure.
He also called for greater access to financial services for rural communities, women and young entrepreneurs.
According to him, consumer protection and financial inclusion remain essential to building a resilient financial system.
“Businesses should engage more closely with banks while improving transparency, governance and sustainability.
“The financial press has an important role in explaining reforms, identifying challenges and helping the public assess their impact.
“I commend financial correspondents and business editors for their contribution to public understanding of financial sector developments,” he said.
Abdullahi said accurate and objective reporting could strengthen markets, improve investor education and encourage informed public debate.
The deputy governor said the foundations of monetary and financial stability had become stronger three years into the reform programme.
He, however, stressed that maintaining the progress would require disciplined supervision, responsible banking and continued attention to the needs of businesses and households.
Abdullahi described financial stability as a shared responsibility involving regulators, financial institutions, businesses, investors, the media and the public.
He expressed optimism that stronger banks and deeper financial markets could support sustainable economic growth and create wider economic opportunities.
Earlier, the Director of Stakeholder Engagement and Institutional Relations at the CBN, Mrs Hakama Sidi-Ali, commended the media for supporting communication between the apex bank and the public.
Sidi-Ali said journalists’ feedback had contributed to improving the bank’s communication and stakeholder engagement over the past three years.
She also pledged continued collaboration with the media and urged journalists to extend similar support to the new Director of Corporate Communications, Michael Akuka.
Akuka said the banking sector had entered a new phase following the recapitalisation exercise.
He said the key question was now how banks would deploy the additional capital rather than simply whether they could raise it.
“The concern is how stronger balance sheets can translate into a financial system that can block shops, finance real economic activities, and maintain the confidence of the Nigerian people,” Akuka said.
He urged finance correspondents and business editors to look beyond headlines when reporting monetary and financial-sector developments.
“Go past the headline, ask follow-up questions. You can ask the second question, the third, the fourth and as many as you need to ask,” he said.
