The Central Bank of Nigeria (CBN) says its foreign exchange reforms and banking sector recapitalisation have strengthened Nigeria’s financial system.
The CBN Deputy Governor, Corporate Services, Dr Muhammad Abdullahi, said this at the 38th Seminar for Finance Correspondents and Business Editors Association of Nigeria (FICAN) in Abuja on Tuesday.
Abdullahi said the reforms were introduced against the backdrop of significant economic challenges inherited by the current CBN leadership in 2023.
According to him, the reforms sought to restore stability, rebuild confidence and refocus the apex bank on its core mandate.
He commended financial journalists for scrutinising the reforms and explaining their implications to businesses, households and the wider public.
He said the theme of the seminar, “Towards a Robust and Resilient Financial System in the Banking Sector Recapitalisation Era,” was timely.
The deputy governor said that Nigeria’s foreign exchange market was heavily administered and fragmented in 2023, with multiple windows operating alongside a parallel market.
Abdullahi said that the gap between official and parallel market exchange rates averaged more than 60 per cent in 2022.
He said that the gap exceeded 100 per cent at certain periods, making pricing and business planning difficult.
“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 said that the ways and means financing reached N26.6 trillion by 2023, while legacy development finance exposures exceeded N10 trillion.
He said that the resulting liquidity pressures made inflation difficult to contain and weakened the transmission of monetary policy.
“The CBN consequently 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 five billion dollars.
“The CBN subsequently strengthened foreign exchange trading and reporting rules to make the market more transparent,” he said.
He said that the apex bank also introduced an electronic foreign exchange matching system for interbank transactions and established the Nigeria FX Code.
He said the code provided clearer standards of conduct and discouraged speculative behaviour in the foreign exchange market.
The deputy governor said monetary policy was also tightened while liquidity management was strengthened and development finance interventions gradually reduced.
Abdullahi said that the banking sector recapitalisation, announced in 2024, addressed the need for stronger banks capable of supporting economic growth.
According to him, the reforms have contributed to greater stability in the foreign exchange market.
He said that 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.
The deputy governor said that the foreign exchange inflows had also become more diversified, with autonomous sources accounting for 7.3 billion dollars of 10.8 billion dollars recorded in July.
Abdullahi said that the remittances through international money transfer operators reached 950 million dollars in July.
He said that gross external reserves rose to 55.6 billion dollars as of Sept. 11.
The deputy governor said that inflation, which peaked at 34.8 per cent in December 2024, moderated to 15.43 per cent in July 2026.
He said real GDP grew by 4.43 per cent in the second quarter of 2026, driven largely by non-oil activities.
He, however, said the improvements did not mean pressures on households and businesses had disappeared.
Abdullahi said that the CBN’s priority was to make the gains more durable while deepening investment and foreign exchange sources.
On recapitalisation, he 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 bank capital was necessary to support Nigeria’s aspiration of building a one trillion dollar economy by 2030.
According to him, well-capitalised banks would be better positioned to finance infrastructure, industrial expansion and international trade.
He said that stronger capital buffers would also enable banks to absorb losses during economic stress and invest in innovation and digital transformation.
The deputy governor said that banks must strengthen corporate governance, internal controls and risk management alongside increased capital.
He urged boards and management teams to demonstrate integrity, accountability and transparency while protecting depositors, investors and other stakeholders.
He said that risk management should cover credit, market, liquidity and operational risks, as well as cybersecurity and third-party dependencies.
Abdullahi said that the CBN would continue to monitor governance, asset quality, liquidity and large exposures within the banking sector.
He said that banks would be expected to protect customer data, maintain reliable payment services and recover quickly from disruptions.
He said increased digital financial services required greater investment in cybersecurity, data protection, disaster recovery and business continuity.
The deputy governor said that the benefits of recapitalisation should extend beyond stronger balance sheets to improved services and 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 integral 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 that accurate and objective reporting strengthened markets, supported investor education and promoted informed public debate.
He said three years into the reform programme, the foundations of monetary and financial stability had become stronger.
He, however, said that sustaining the progress would require disciplined supervision, responsible banking and continued attention to 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 broaden economic opportunities.
Earlier, the Director, Stakeholder Engagement and Institutional Relations Department, CBN, Mrs Hakama Sidi-Ali, commended the media for its support in strengthening communication between the apex bank and the public.
Sidi-Ali said journalists’ counsel and feedback contributed significantly to improving the bank’s communication and stakeholder engagement over the past three years.
She said several awards received by the CBN during the period were partly a reflection of the media’s contribution to the apex bank’s communication efforts.
She expressed appreciation to the media for its continued support, saying journalists remain strategic stakeholders in communicating the bank’s policies to Nigerians.
The director also pledged continued collaboration with the media in her new role and urged journalists to extend similar support to the new Director, Corporate Communications, Michael Akuka.
She said that the CBN remained united in pursuing its mandate and would continue engaging stakeholders to promote effective communication and understanding of its policies.
Also, Akuka said that the banking sector had entered a new phase following the recapitalisation exercise.
The new director of corporate communications said that the central question was no longer whether banks could raise the required capital, but what they would do with the additional capital.
“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 participating in the seminar to go beyond headlines and seek the context behind 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.
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