Cardoso lists CBN’s reforms gains as net external reserves hit $40b

The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso yesterday listed the gains of the bank’s key policies in the last three years, including significant rise in net external reserves from $3 billion to $40 billion.

Speaking at the BusinessDay CEO Forum in Lagos, the CBN boss put the gross external reserves position at $52 billion as of Wednesday.

“When we started, the net external reserves figure was in the region of about $3 billion- plus. And if you remember, that was a figure that was published at the time by J.P. Morgan and created a lot of panic in the system,” he stated.

Speaking on the theme: “From Stability to Shared Prosperity”, he said the apex bank’s policies over the last three years have significantly improved the foreign exchange market in Nigeria, moving from one with opacity to a transparent market with its unified exchange rate.

“This has eliminated the need for Nigerians to scramble for foreign exchange and has made it easier for businesses to access foreign currency. The reforms have also improved the international perception of Nigeria’s currency, as naira cards now work abroad. Additionally, the central bank’s reforms have led to a substantial increase in Nigeria’s foreign exchange reserves, from around $3 billion to over $40 billion, reflecting the success of these policies,” he stated.

He said that the reforms and rising confidence in the economy pushed diaspora remittances to $600 million plus monthly, adding that the remittances will hit $1 billion monthly by year end.

“We are expecting that by the end of the year, the diaspora remittances will hit about $1 billion a month from diaspora businesses,” he said.

He said the robust liquidity in the forex market has motivated foreign investors to take investment decisions that favour the country because of the free entry and exit policy.

He said the reserves position will cover 10 months of import, adding that such indicators boost foreign investors’ confidence in the economy.

According to Cardoso, the recovery in net reserves underscores the impact of the reforms undertaken to restore confidence in the economy and strengthen the country’s external position.

“So, in a nutshell, I do believe that where we are now, we’ve achieved that hard-earned stability, and with stability comes potential for investment, and with investment comes growth, and all our local CEOs should be part and parcel of that train that is moving,”

He urged Nigerian business leaders to take advantage of the improved macroeconomic stability and participate actively in the next phase of the country’s economic growth.

Cardoso said the restoration of stability was not an end in itself but a foundation for increased investment, economic expansion and broader prosperity.

The CBN governor’s comments came as Nigeria continues to rebuild its external reserves and improve liquidity in the foreign exchange market following reforms aimed at addressing distortions in the in the FX Market.

He said the progress made so far should create greater confidence for businesses and investors to commit capital to the Nigerian economy.

On bank’s exposure to oil and gas sector, he said the lenders would have learnt their lessons.

Cardoso advised banks to lend to areas where they have expertise to achieve a better performing loans.

“Banks should take risks where they have expertise,” he advised. Cardoso said the apex bank has created more buffers to withstand shocks adding that recapitalization has created strong and resilient banks that would take the economy to position of sustainable growth.

“Indeed, let us not even forget something, and it’s something that many people tend to forget. Our banking system is very different from many others. On the African continent, we more or less dominate. We more or less dominate. Our banks are everywhere,” he said.

Cardoso expressed confidence that despite the challenges and exogenous shocks in the global markets, inflation, and exchange rates in Nigeria will come down.