Nigerian Central Bank Governor Cardoso is highlighting the investment opportunities that have emerged from the currency reforms introduced in 2023, which coincided with a 41% depreciation of the naira during the year.
Appointed in September 2023, Governor Cardoso moved quickly to stabilize the financial system. The Central Bank of Nigeria implemented a series of decisive measures, including an 875-basis-point increase in the policy rate to 27.5%, clearing long-standing foreign exchange backlogs, and overhauling exchange rate policy to reduce fragmentation and improve price discovery.
Those steps helped restore confidence and drew significant foreign capital. Over $6 billion in foreign investment flowed into Nigeria last year, attracted by clearer policy direction, higher yields, and the prospect of a more unified exchange rate environment. Financial analysts, including those at Deutsche Bank, have suggested that the naira could find a new equilibrium in the region of 1,500 to the dollar as markets adjust to the reforms.
Looking ahead, the central bank has signaled further reforms in 2024 intended to deepen market transparency and strengthen the foreign exchange framework. Planned measures include the introduction of new forex codes to improve transaction tracking and reporting, which should help reduce distortions and enhance investor confidence in Nigeria’s currency and financial markets.
By addressing structural imbalances—through tighter monetary policy, settlement of FX backlogs, and clearer exchange-rate mechanisms—the central bank aims to create a more predictable environment for both domestic and foreign investors. Continued policy clarity and implementation will be crucial to sustaining inflows, stabilizing the naira, and supporting broader economic recovery.