The Central Bank of Nigeria (CBN’s) decision to clear over $7 billion unsettled FX backlogs raised investors’ confidence in the economy, supporting dollar inflows and foreign reserves accretion, CBN Governor, Olayemi Cardoso announced.
He spoke on Friday (yesterday) at the Inaugural Lagos Business School Lecture Theme: “Next Generation Leadership in Monetary Policy & Nation Building” held in Lagos.
The CBN boss said although he had no idea where the fund for the backlog clearance would come from, when he assumed office, but he believed it was the right thing to do, and gave investors his word.
He said: “Credibility is at the heart of any central bank. If you don’t have credibility, people do not trust you and they do not invest in your economy. When I took office, I made a promise we would pay the backlog, the verifiable backlog of monies that were owed by Nigeria to third parties.”
“And it was, at the time, estimated at over $7 billion US dollars. And to be honest with you, I had no idea how I was going to do it, but I just felt it was not something to be negotiated”.
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Cardoso explained that Nigeria needed to ensure that its integrity is maintained. He said the apex bank stared with a forensic audit to understand the issues better and based on the recommendations, the backlog of foreign exchange transactions was paid, which was a huge sacrifice.
He explained that as a going concern, the CBN knows that if it expected people to continue to trust and invest in our economy, you’ve got to keep your promises.
“I have no idea in my mind either that that particular action contributed in no small way, and it may not appear to many as such, but it contributed in no small way to the rise in foreign exchange reserves that we have been able to acknowledge,” he stated.
Cardoso said the increased forex liquidity has supported naira stability and made it easier for many commercial banks to approve use of their naira-debit cards abroad.
He said the use of naira-debit cards abroad is definitely a step in the right direction. It’s transformative. It is here to stay, and you can be sure that going forward, you will continue to see this kind of initiative in the country.
He said the event marks the first edition of the Central Bank of Nigeria Governor’s Lecture, part of our new Knowledge Acceleration and Thought Leadership Series.
“This platform is a deliberate effort to bridge policy and practice, and to nurture a culture of informed, values-driven leadership. It is also the first of what we hope will become a series of engagements with institutions of higher learning across Nigeria,” he said.
Cardoso disclosed that when he assumed office as Governor in 2023, Nigeria’s economy faced formidable headwinds.
“Inflation was spiraling, external reserves were strained, investor confidence was shaken, and nearly every macroeconomic indicator was under pressure. It was a moment that demanded not just technical skill, but leadership rooted in courage, credibility, and accountability. We had to act decisively,” he said.
To rein in inflation, the CBN tightened policy aggressively, raising rates by more than 800 basis points and strengthening liquidity management.
“We restored orthodoxy by halting central bank financing of government beyond statutory limits and re-anchoring monetary policy on its core mandate. On foreign exchange, we introduced a willing-buyer, willing-seller framework, unified exchange rate windows, and cleared the backlog of verifiable FX commitments, restoring market confidence,” he said.
“We strengthened reserves, now standing above $42 billion, and created new channels for diaspora remittances and investments, including the Non-Resident BVN platform, which allows Nigerians abroad to open accounts seamlessly from anywhere in the world,” he said.
Continuing, he said the real task is to ensure that these hard-won gains translate into durable prosperity, especially for the next generation. And this is where leadership becomes critical.
“That said, we cannot also ignore the reality that life remains hard for many Nigerians, nor deny that leadership has sometimes fallen short. Yet reputation matters. When it falters, confidence weakens and opportunities narrow, but when it is rebuilt, confidence returns, capital flows, and stability takes root”.
“I have seen this at the Central Bank, where restoring credibility has opened new possibilities. And it is you, the next generation of Nigerians, who will carry this reputation forward, shaping how our nation is seen, and showing the world a nation that is resilient, creative, and determined to rise,” he stated.