Dr Olayemi Michael Cardoso, acting Governor of CBN
Nigeria’s external reserves hit $49bn, CBN Governor declares FX crisis easing
Cardoso says nation now a net buyer, parallel market premium collapses to under two per cent as reforms take hold
Central Bank of Nigeria Governor Olayemi Cardoso has announced that Nigeria’s protracted foreign exchange shortages are abating, with external reserves climbing to $49 billion and the country transitioning from acute FX stress to becoming a net buyer in the market.
Speaking Monday at the second National Economic Council Conference in Abuja, Cardoso disclosed that the reserve position as of February 5, 2026, represents a 4.93 per cent increase from $46.7 billion and a dramatic departure from the circumstances the current CBN management inherited.
“This is obviously a very important statistic. When we took over, the net reserve figure was about $3 billion. As at the end of last year, the net reserve figure had gone up strongly into the 30s. And as I said, as of February 5, 2026, it is $49 billion. We are now net buyers,” Cardoso stated.
According to the CBN governor, the turnaround stems largely from foreign exchange market reforms that allow market forces to determine prices, with intervention deployed only to smooth volatility.
He described the collapse of the parallel market premium to under two per cent as evidence of improved transparency and predictability.
“The premium between the official and parallel market rates has collapsed to under two per cent,” Cardoso said.
He credited diaspora remittances as a critical contributor to reserve growth, following deliberate engagement with Nigerians abroad and streamlined remittance channels.
“Remittances have made a big difference to how we have grown our reserves,” he noted. “The diaspora come from every single state represented here. We have engaged with them and made it easier for them to remit money back to Nigeria.”
Cardoso asserted that reforms are now tangible in everyday transactions, particularly for international travellers who can use naira cards abroad without scrambling for foreign currency.
He contrasted this with a period when the naira was widely rejected across West Africa.
“In those days, if you went around West Africa and gave them naira, nobody wanted to touch it,” he recalled. “That has all gone now. There is predictability and you can plan.”
The CBN governor issued a warning against speculative currency holdings, stating that Nigerians retaining foreign exchange without genuine economic need face mounting losses.
“Those holding unnecessary foreign exchange reserves are losing money every day,” he said.
On banking sector reforms, Cardoso said ongoing recapitalisation is strengthening financial institutions and enhancing their capacity to support Nigeria’s $1 trillion economy ambition. “Banks are recapitalising, investors are earning positive real returns, and equity markets are recovering due to improved earnings and stability,” he said, adding that the CBN is developing clearer succession rules for banks to ensure continuity during uncertain periods.
Cardoso cited recent macroeconomic indicators as further evidence of stabilisation, including GDP growth of 3.98 per cent, a current account surplus of $3.42 billion in the third quarter of 2025, and inflation moderating to approximately 15.15 per cent.
“We haven’t had this kind of current account strength in a very long time,” he observed.
The CBN chief outlined a 2026–2030 roadmap designed to translate macroeconomic stability into sustained growth and productivity, focusing on reducing inflation, normalising the FX market, strengthening external reserves and safeguarding the naira.
“Without stability, there will be no growth,” Cardoso said. “If there is something positive that has come out of this, it is the fact that we now have stability. We will continue doing the things we have done. We will do whatever it takes to safeguard the value of the naira.”
Acknowledging persistent risks, Cardoso warned of excess liquidity in the system and potential spending pressures during election cycles. “There is still a lot of liquidity in the system and we must manage it very carefully. We are not out of the woods yet.”
He stressed that monetary policy alone cannot resolve all structural challenges, pointing to food supply shocks, high energy costs and weak infrastructure as continuing inflationary drivers. “Monetary policy is necessary, but it is not enough on its own. Monetary stability requires fiscal discipline and credibility. Policy coherence is a strong anchor for stability.”
Cardoso called for alignment between fiscal authorities, subnational governments and national stability objectives, noting that states control significant public revenue and can shape macroeconomic outcomes.
“Subnational governance can significantly affect macroeconomic outcomes,” he said.
Projecting toward 2030, Cardoso said success would manifest as single-digit inflation, growing FX reserves driven by non-oil exports, foreign investment and remittances, and a robust, inclusive financial system. “Our view is that the future is looking bright,” he affirmed.
In his welcome address, Minister of Budget and Economic Planning Senator Abubakar Atiku Bagudu commended President Bola Ahmed Tinubu for reforms that have strengthened the fiscal position of states and local governments.
“Today, a more united federation is gathered here because of the choices you made,” Bagudu said. “Your reforms have improved the fiscal condition of states and local governments, while much of the burden is borne by the Federal Government.”
He added that governors across party lines have broadly endorsed the reform direction, noting enhanced collaboration with the Federal Government on security, infrastructure, fiscal and monetary coordination, domestic production and efforts to curb oil theft.
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