File: CBN Building, Abuja
The Central Bank of Nigeria has been announced the global “Central Bank of the Year” at the 2026 Central Banking Awards, following sweeping monetary and structural reforms that have helped stabilise the country’s economy after years of policy distortions.
This was disclosed in a statement by the Central Banking Awards Committee which credited the apex bank’s policy reset and institutional reforms for restoring confidence in Nigeria’s financial system.
According to the statement, the award reflects a decisive return to orthodox monetary policy, improved governance, and reforms that strengthened investor confidence and market stability.
Nigeria’s economy had been under severe strain prior to the reforms, with rising inflation, weakening foreign exchange reserves, and widening gaps between official and parallel market exchange rates.
The committee noted that by 2023, inflation had climbed to 22.4 per cent, while foreign exchange liquidity deteriorated significantly, with a backlog of about $7bn in unmet obligations and a spread of over 60 per cent between official and parallel market rates.
It added that economic stagnation and policy inconsistencies had pushed Nigeria from being Africa’s largest economy in 2014 to fourth position behind South Africa, Egypt, and Algeria, while monetary financing and subsidy-related interventions left policy in an “unsustainable position.”
A former senior central bank official, whose name was not mentioned, was quoted in the statement as saying the country had appeared to be “heading the way of Venezuela and Zimbabwe,” amid concerns over fiscal instability, currency depreciation, and loss of central bank independence.
However, following the appointment of Olayemi Cardoso as Governor in October 2023, the apex bank embarked on wide-ranging reforms aimed at restoring macroeconomic stability and rebuilding credibility.
The committee stated that the new leadership prioritised ending quasi-fiscal interventions, tightening monetary policy, clearing foreign exchange backlogs, and re-establishing institutional independence, forming the foundation of a broader reform agenda anchored on transparency and discipline.
A major component of the reforms was the overhaul of the foreign exchange market. The CBN replaced multiple exchange rate windows with a unified, market-driven system based on a willing-buyer, willing-seller model, while introducing an electronic FX matching platform to improve price discovery and transparency.
Cardoso was quoted as saying, “The naira now trades within a narrow, stable range. The once-substantial gap between the official and parallel markets has shrunk to under 2 per cent, down from over 60 per cent.”
The statement noted that the central bank also cleared outstanding FX obligations owed to sectors such as aviation and manufacturing, helping to restore business confidence.
As a result of improved FX liquidity, stronger capital inflows, and increased non-oil exports, Nigeria’s gross external reserves rose to $46.7bn by November 2025, representing the highest level in nearly seven years and providing more than 10 months of import cover.
The International Monetary Fund, in its July 2025 Article IV assessment, was quoted as commending the reforms, noting that the measures taken had improved market confidence and supported liquidity in the foreign exchange market.
On inflation, the committee stated that the CBN adopted aggressive monetary tightening, raising interest rates from 18.75 per cent in 2023 to 27.5 per cent by November 2024. Although inflation initially surged to 34.80 per cent in December 2024 following subsidy removal and currency liberalisation, it later declined to 15.10 per cent by January 2026.
Food inflation also moderated to 8.9 per cent, reflecting improved price stability and tighter monetary conditions.
The easing inflation trend enabled the apex bank to begin a cautious policy easing cycle, reducing the benchmark rate to 26.5 per cent by February 2026.
Cardoso said the bank remained committed to further reducing inflation, adding that “the current double-digit rate cannot be acceptable,” while emphasising a transition towards an inflation-targeting framework supported by improved data and communication tools.
Beyond monetary policy, the committee highlighted structural reforms in the banking sector, including a recapitalisation programme introduced in 2024 requiring banks to meet higher capital thresholds.
It stated that more than 33 banks had raised fresh capital, with at least 20 already meeting the new requirements ahead of the March 31, 2026 deadline, while non-compliant banks risk licence downgrade, acquisition, or liquidation.
The apex bank also strengthened supervision by transitioning towards Basel III standards to improve risk management and liquidity monitoring.
In addition, microfinance lending expanded by over 14 per cent, while digital credit products reached more than 1.2 million small businesses in 2025, supporting financial inclusion.
On payments and digitalisation, the CBN reviewed the cash management system, introduced measures to improve ATM efficiency, and strengthened oversight of payment agents nationwide.
The committee noted that over 12 million contactless cards are now in circulation and that about 40 fintech firms are supported through the CBN’s regulatory sandbox.
The statement further highlighted improvements in governance and compliance, including the establishment of a dedicated compliance department and enhanced anti-money laundering controls, which contributed to Nigeria’s removal from the Financial Action Task Force grey list in 2025.
International rating agencies also acknowledged the impact of the reforms. Fitch upgraded Nigeria’s rating from B- to B with a stable outlook in April 2025, while Moody’s raised its rating from Caa1 to B3 in May, citing improved fundamentals and policy credibility.
Nigeria’s return to the international capital market was also marked by a $2.35bn Eurobond issuance in 2025, which was oversubscribed more than five times.
Despite the progress, the committee noted that challenges remain, including sustaining disinflation, completing banking sector recapitalisation, and strengthening institutional frameworks.
It, however, concluded that the scale of reforms undertaken by the apex bank had been significant, with a former official stating, “What the CBN has achieved is nothing short of remarkable.”
