Nume Ekeghe writes on the series of reforms undertaken by the Central Bank of Nigeria under Governor Olayemi Cardoso in his three years in office, and how the changes are reshaping the country’s financial system
Three years ago, Olayemi Cardoso took over as Governor of the Central Bank of Nigeria (CBN) at a time when confidence in the country’s financial system had been badly tested.
The foreign exchange market was fragmented, the naira was under severe pressure, inflation was eroding household incomes, and the banking industry was operating with a capital base that the new CBN leadership believed would be inadequate for the size of economy Nigeria aspired to become.
Cardoso assumed office on September 22, 2023. What followed was not one big-bang reform, but a succession of changes across virtually every important part of the financial system.
The banking industry has been recapitalised. The foreign-exchange market is undergoing a fundamental reform. Payments regulation is being tightened even as the system is redesigned for a more digital economy. Financial-market infrastructure is being modernised, while the CBN has stepped up its defences against fraud, cyber threats and financial crime. And, perhaps most visibly, the country’s external reserves have climbed above $50 billion.
Since assuming office, Cardoso has therefore led a series of profound reforms at the Bank and, by extension, the Nigerian economy, which has seen a significant turnaround in financial stability and market confidence.
The reforms have not gone unnoticed as President Bola Ahmed Tinubu has repeatedly commended Cardoso’s stewardship, while international recognition followed in March 2026, when the CBN was named Central Bank of the Year 2026 by Central Banking in London. The award was later formally presented to Cardoso in June.
But perhaps more revealing than the accolades is the timeline itself. It shows a central bank that has spent the past three years trying to change not merely individual policies, but the way the financial system works.
A Stronger Capital Base for Nigeria’s Banks
The banking sector was always going to be one of the biggest tests of Cardoso’s tenure. On March 28, 2024, the CBN announced its recapitalisation programme, setting new minimum capital requirements of ₦500 billion for banks with international authorisation, ₦200 billion for national banks and ₦50 billion for regional banks.
The deadline was March 31, 2026. The rationale was straightforward enough: Nigerian banks needed stronger balance sheets if they were going to finance a bigger economy and remain capable of absorbing shocks.
Cardoso had previously framed the question around the possibility of Nigeria becoming a $1 trillion economy, asking whether the existing capital base of the banking system would be enough. And by March 31, 2026, 33 banks had met the revised capital requirements and raised approximately N4.65 trillion in new capital. More strikingly, 72.55 per cent of the funds came from domestic sources, with the remaining 27.45 per cent sourced internationally.
The significance went beyond compliance, for Cardoso: “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
However, the longer-term question is what banks do with the money because a stronger capital base gives lenders more room to absorb losses, take larger positions and finance businesses. But ultimately, the success of the exercise will be judged not by how much money was raised, but by whether that money helps expand productive credit and supports investment.
The recapitalisation has also been accompanied by other governance reforms. One of which is that by September 2025, the CBN introduced a succession framework for Domestic Systemically Important Banks, requiring orderly succession arrangements for chief executives of institutions whose disruption could have wider consequences for the financial system. Also, in February 2026, the CBN approved the Bank of Industry’s Non-Interest Banking Window, widening the range of financing structures available to businesses and households.
Taken together, the measures suggest a CBN concerned not only with whether banks are adequately capitalised, but whether the industry is governed well enough and diversified enough to support the economy.
RESTORING ORDER TO THE FOREIGN EXCHANGE MARKET
If one reform defined the early part of the Cardoso years, it was the attempt to fix Nigeria’s foreign-exchange market. The CBN inherited a market where the gap between the official and parallel rates had become wide enough to distort economic decisions and encourage arbitrage.
Cardoso’s response was to move towards a more market-driven system and gradually dismantle some of the arrangements that had kept the official and parallel markets apart.
The transition was painful and on March 24, 2026, the CBN introduced new naira-settlement requirements for International Money Transfer Operators, aimed at improving the transparency and traceability of remittance flows. The following day, March 25, international oil companies were permitted to repatriate 100 per cent of their export proceeds through authorised dealer banks.
The significance of the IOC reform is difficult to miss. Oil remains Nigeria’s largest source of foreign exchange and improving the route through which export earnings enter the formal market directly affects liquidity.
The CBN also strengthened the framework for Bureau de Change operators in 2026, giving licensed BDCs structured access to FX through authorised dealer banks while introducing the FX BDC Purchase Tracker to improve monitoring and compliance.
Then, on May 15, 2026, Cardoso launched the fourth edition of the Foreign Exchange Manual. The cumulative effect is an attempt to make the FX market less opaque and less dependent on administrative discretion. With all these developments, the gap between the official exchange rate and BDC rates had narrowed to below two per cent, while reserves remain above $52.5 billion. That is a long way from the market Cardoso inherited.
TAKING NIGERIA’S PAYMENTS SYSTEM TO THE NEXT LEVEL
Nigeria’s payments system has changed dramatically over the past decade, but the CBN under Cardoso has increasingly focused on a new question: how do you make a rapidly growing digital ecosystem safe, reliable and genuinely inclusive?
The answer began taking shape on September 9, 2025, when the committee for the Payments System Vision 2028 project was inaugurated. A month later October 6, 2025, the CBN also introduced revised agent-banking guidelines, tightening requirements around customer protection, agent oversight, transaction controls, location monitoring and sanctions.
Then came the bigger milestone as on June 1, 2026, the CBN launched Payments System Vision 2028, a roadmap built around interoperability, security, inclusion, innovation, trust and collaboration.
Cardoso’s language at the launch was revealing. He described payment infrastructure as the “invisible roads that move money”, arguing that efficient payment systems were increasingly central to economic growth, competitiveness and poverty reduction.
The ambition is considerable: 95 per cent financial inclusion by 2028, bringing another 15 million Nigerians into the formal financial system.
But Cardoso also made an important admission. “The success of this vision will not be measured by the document, but by execution.”
By 2026, the CBN was also introducing PoS geo-fencing and dual-connectivity requirements, while on July 1, 2026, enhanced instant-payment security measures gave customers greater control over transaction preferences and limits and strengthened device authentication, identity verification and real-time fraud monitoring.
The objective is no longer simply to get Nigerians onto digital platforms. It is to make them confident enough to stay there.
STRONGER CONSUMER PROTECTION, FRAUD & CYBERSECURITY
The rapid growth of digital banking has changed the meaning of financial stability. A bank can be well capitalised and liquid and still face a serious threat if its systems are vulnerable to fraud or cyberattack. That is why the Cardoso CBN has increasingly treated consumer protection, cybersecurity and financial crime as part of the stability agenda.
On December 2, 2025, the apex bank introduced a revised cash policy, changing cash-withdrawal thresholds while removing restrictions and charges on cash deposits. Then on November 2025, financial institutions were directed to withdraw misleading or non-compliant advertisements and strengthen transparency in financial communications.
Then came a series of more technical reforms in March 2026. On March 10, the CBN introduced automated AML/CFT/CPF standards aimed at improving real-time monitoring of financial-crime risks. On March 12, the BVN and watchlist framework was strengthened. And on March 30, the CBN deployed the Cybersecurity Self-Assessment Tool to help regulated institutions identify weaknesses in their cybersecurity posture.
There was also a stronger push for banks to respond more rapidly to electronic fraud with a clear vision that the Nigerian financial system is becoming increasingly digital. Its defences therefore must become increasingly digital too.
This is perhaps one of the less visible changes under Cardoso, but it could become one of the most important as the regulator is moving from simply asking whether a financial institution is solvent to asking whether it is resilient enough to withstand the modern risks facing financial institutions.
MODERNISING NIGERIA’S FINANCIAL MARKETS
The most technical reforms are often the ones least noticed outside the financial markets. But they can have an outsized effect on how efficiently the system operates.
On April 17, 2026, the CBN formally introduced the Nigerian Overnight Financing Rate (NOFR) in collaboration with the Financial Markets Dealers Association.
NOFR is transaction-based and designed to provide a more reliable benchmark for overnight funding, improving price discovery, transparency, liquidity management and monetary-policy transmission.
Cardoso described it as a significant reform in the development of a more resilient and credible financial sector. “The introduction of NOFR represents a significant reform that reinforces the Central Bank of Nigeria’s commitment to building a more resilient, efficient and credible financial services sector.”
The significance becomes clearer when viewed alongside the CBN’s broader fixed-income market reforms. The Bank has been working to strengthen its oversight of trading and settlement infrastructure, with the aim of creating a more transparent and efficient market.
This matters because monetary policy does not operate in isolation. When the CBN changes interest rates, the decision has to travel through the financial system into money markets, bond markets, bank funding costs and eventually the wider economy.
STRONGER RESERVES, FINANCIAL STABILITY
Perhaps the most visible sign of the changing financial landscape has been the improvement in Nigeria’s external buffers.
In 2026, external reserves crossed $50 billion, reaching a level not seen in roughly 17 years and as of 17 September, the reserves remained above $54billion.
The reserve accumulation has coincided with a more functional FX market, improved inflows and tighter management of external liquidity. But Cardoso has been careful about how the reserves should be viewed. They are not simply dollars available for defending any exchange-rate level. They are a buffer. That distinction is important.
This is because a country with inadequate reserves is vulnerable to external shocks because every fall in oil prices or reversal in capital flows immediately becomes a currency crisis. And a country with a stronger reserve position has more room to absorb the shock.
The CBN has also begun diversifying the composition of the reserve portfolio. In 2026, locally sourced gold refined to international LBMA Good Delivery standards was added to Nigeria’s reserve assets.
It is a relatively small component compared with the dollar reserves, but symbolically important. It says the CBN is thinking about reserves not simply in terms of accumulation, but diversification. And that is consistent with the wider philosophy of the Cardoso reforms: build buffers before they are needed.
THE REFORM STORY BEHIND THE AWARDS
It is against this backdrop that the international recognition of the CBN becomes easier to understand. In March 2026, the CBN was named Central Bank of the Year 2026 by the Central Banking Awards in London.
When Cardoso received the award in London in June 2026, he deliberately played down the personal dimension, dedicating the honour to the Board, management and staff of the CBN.
He described it as recognition of the institution’s collective efforts towards reform and economic stability. That is perhaps fitting, the achievements credited to Cardoso are the product of an institution.
The same applies to the commendation from President Tinubu, who has publicly backed the direction of the CBN’s monetary policies. The awards are useful because they indicate that the reforms are being noticed outside Nigeria.
THREE YEARS ON, THE REFORM STORY CONTINUES
Three years into Cardoso’s tenure, the CBN has moved from stabilising the system to laying the foundations for a stronger and more resilient financial sector. The ₦4.65 trillion raised through bank recapitalisation, stronger external reserves, a more transparent FX market, modernised payments infrastructure and tighter safeguards around fraud, cybersecurity and financial crime all point to an institution that has been deliberate about fixing long-standing weaknesses while preparing the financial system for the economy ahead.
What makes the reform story particularly significant is that the changes have not been confined to one area; they have touched the banks, the FX market, payments, financial markets and the wider framework for financial stability. For a governor who took office on September 22, 2023, the past three years have therefore been less about isolated policy announcements and more about rebuilding confidence in the system, strengthening its foundations and giving the CBN greater room to respond to shocks.
The next phase is about deepening these gains and ensuring that a stronger financial system becomes an increasingly powerful engine of growth, investment and economic opportunity.