By Bassey Udo
Were Olayemi Cardoso not a rugged professional made of sterner stuff, he would have buckled and rejected his appointment on September 22, 2023 by President Bola Tinubu for him to sit at the helm as the governor of Central Bank of Nigeria (CBN).
Economy in crisis
The appointment coincided with the time the country’s economy was at its most precarious state. Confidence was at all time low, particularly in the financial sector. The Central Bank was in serious crisis. What the Bank inherited bore little semblance to a conventional monetary authority.
The Naira was in freefall, as devaluation stripped value from savings and discouraged investments. International ratings agencies did not reckon much with Nigeria. The country’s overall economic outlook was downgraded, as capital flight and investors turned their attention elsewhere in the continent.
At the root of the crisis was a Ways and Means overdraft that ballooned to about ₦23.7 trillion, compelling the CBN to indulge in the printing of money with reckless abandon to fund government huge deficits. This quasi-fiscal financing arrangement fed directly into galloping inflation, which pushed the apex Bank into injecting more than ₦10 trillion into series of emergency intervention schemes to strengthen price and ensure financial stability.
The foreign exchange market was in complete disarray. Multiple and conflicting exchange rate windows between official and interbank rates created a gap that thrived on arbitrage. Analysts estimated the attendant losses at about 3 percent of GDP. The widening gap discouraged genuine investment.
Spiralling inflation and foreign exchange shortage resulted in significant distortions in the exchange rate, with the gap between official and parallel rates in excess of 60 percent.
That distortion had a direct fiscal cost, with fuel subsidy losses relating to the exchange rate gap estimated at about 2.2 percent of GDP, a situation that could scare the bravest man. Not Cardoso!
Cardoso stepped in unfazed
Like a grand chessmaster, he must have taken a fleeting moment to assess the situation before his move.
When Cardoso assumed office in September 2023, rather than attempt to singlehandedly turnaround the situation, he took his most important first step, by assembling a crack team of reformers.
He reconstituted the Monetary Policy Committee (MPC) made up of seasoned professionals from academia, technocrats from research institutions, international consulting firms, and the banking and financial sectors.
The agenda to the committee was straightforward but consequential: deploy and apply the depth of your expertise and experience to reset and recalibrate monetary policy with the strictest sense of professionalism the moment demanded.
As expected, members of the MPC team rolled up their sleeves and got to work. They became the engine room for the aggressive reforms that followed. Apart from the adoption of an uncompromising inflation-targeting monetary policy stance designed to pull the economy back from unprecedented uncertainty and volatility, the team took other surgical steps that would set the system toward measurable macroeconomic stability.
Three years of landmark achievements
As the CBN marks the third anniversary of the Cardoso era, not a few analysts and observers see it as a turning point for Nigeria’s monetary and financial system. They describe the last 36 months as one characterized by bold and decisive actions to move the economy from the edge of a precipitous crisis of confidence toward a more resilient, rules-based operational environment.
Perhaps, one of the most significant reforms initiated by Cardoso was his decision to unify the widening exchange rate to restore market confidence, followed by the overhaul of the entire foreign exchange framework.
The CBN adopted a willing-buyer, willing-seller model that allowed the foreign exchange market to determine the Naira’s real value rather than the application of administrative fiat.
The strategy did not only eliminate the arbitrage-driven distortions that plagued the economy for years, it launched the country’s foreign exchange market on a strong pedestal toward genuine price discovery and stability.
The results of the initiative were visible and measurable. The Central Banking magazine credited Cardoso as the imitator of the reforms that narrowed the gap between the official and parallel market exchange rates from over 60 percent to less than 2 percent, after years of policy distortions, market uncertainty, multiple exchange rate windows and a significant foreign exchange backlog estimated at over $7 billion.
By May 2026, the CBN had gone ahead to consolidate the gains of its reforms by unveiling the Fourth Edition of the Foreign Exchange Manual to reinforce transparency, efficiency, credibility, and market-driven FX operations — codifying the new orthodoxy rather than leaving it to informal practice.
Similar complementary reforms deepened the market’s credibility. Licensed Bureaux de Change gained structured access to foreign exchange through authorised dealer banks, supported by an FX BDC Purchase Tracker for real-time oversight.
Also, international oil companies were permitted to repatriate 100 percent of export proceeds through authorised dealer banks, a liberalisation policy that further widened the pool of dollar liquidity feeding into the official market.
Besides, the CBN facilitated the allocation of additional crude-oil export terminals in 2026 to strengthen monitoring and compliance across the export value chain, with the understanding that FX stability in the upstream sector of the oil and gas industry underpinned stability everywhere else in the economy.
Rebuilding reserves and taming inflation
The discipline in the strict implementation of the monetary policy strategy by carefully applying the relevant tools to adjust the fundamental parameters yielded huge dividends to most ordinary Nigerians and the markets.
The fruits built through a consistent and disciplined monetary policy approach rather than one-off windfalls reflected in rising accretion in the country’s foreign reserves, which climbed above the $55 billion mark as at July 2026, the highest level attained in over 18 years.
The economy, which fell to fourth place the perking order as Africa’s largest, trailed behind South Africa, Egypt and Algeria, with inflation surging from about 15.4 percent in November 2021 to over 22 percent before the Cardoso reform programme took off. This can only serve as a solemn reminder to how far the financial system shifted ground and how far it has recovered since Cardoso came.
For instance, inflation, which rose above 33 percent at the time, maintained a sustained downward climb, decelerating to 15.39 percent as of July 2026. That is not a straight line back to the comfort zone. As at the end of August 2026, inflation declined by 0.71 per cent, from 16.89 percent in July 2026, marking 20 consecutive months of moderation, an indication of sustained easing in the underlying price pressures.
Although inflation has broken decisively from the runaway trajectory that threatened to spiral out of control and torpedo the entire system, it still impact heavily on households.
The impact of diaspora remittances
Another significant benchmarker for the Cardoso administration in the last three years has been the impact of diaspora remittances on the overall health of the country’s foreign reserves.
The introduction of Naira-settlement requirements for International Money Transfer Operators (IMTOs) massively improved the transparency and traceability of remittance flows, and the effect on volumes has been dramatic. Available data show that monthly diaspora inflows grew from roughly $200 million to almost $1 billion by July 2026. That record highlights the fact that as a result of the incentives introduced by the CBN to encourage diaspora remittances real dollars now flow through formal, trackable channels rather than parallel networks, directly reinforcing the resilience of the financial sector.
The most structurally significant achievement of Cardoso’s tenure in the last three years may, perhaps, be the recapitalisation of the country’s banking sector, which was successfully completed by March 31, 2026 as the first exercise of its kind in more than two decades.
Although the announcement of the commencement of the exercise was heralded with skepticism, the outcome at the end was profound, as 33 banks met the revised minimum capital requirements, raising approximately ₦4.65 trillion in fresh capital, with about 72.55 percent of that sourced domestically.
The domestic-sourcing figure from the recapitalization exercise eloquently testified to the fact that Nigerian capital markets and investors, not just foreign portfolio flows, now have the confidence and depth to fund the banking system’s expansion and growth.
This was reinforced by governance reforms that addressed a long-standing weak point in Nigerian banking: leadership continuity.
By September 2025, the CBN had introduced a Domestic Systemically Important Banks (D-SIB) succession framework that required orderly Chief Executive Officers’ transitions at the country’s most consequential lenders.
This was an important safeguard quietly introduced by Cardoso against the kind of leadership vacuums that have historically destabilised financial individual institutions and, by extension, public confidence in the sector.
Consumer protection and financial integrity measures followed in parallel. The Revised Cash Policy introduced cash-withdrawal thresholds while removing restrictions and charges on cash deposits, redirecting the system toward more efficient cash management and greater digital-payment adoption.
Besides, financial institutions were directed to withdraw misleading advertisements and tighten the accuracy of their communications with customers, while banks were pushed to build faster response mechanisms against electronic fraud.
The CBN under Cardoso was in the vanguard of efforts to revamp the bank verification number (BVN) system and Watchlist Framework to strengthen identity verification and fraud controls, as well as the introduction of the new Automated anti-money laundry, Combating the Financing of Terrorism, and Countering Proliferation Financing (AML/CFT/CPF) standards to ensure real-time monitoring of financial-crime risks. The system modernised the country’s defences against a threat landscape that grew more sophisticated by the year.
Digital payments and financial inclusion
Beyond stabilisation, the CBN under Cardoso has built for the future of Nigeria’s payments architecture capable of guaranteeing digital payments and financial inclusion.
The launch of the Payments System Vision 2028 laid out a strategic roadmap anchored on interoperability, security, inclusion, innovation, trust, and collaboration framework to reposition Nigeria’s digital economy for deeper global integration.
Again, the Revised Agent Banking Guidelines strengthened consumer protection, agent oversight, transaction controls, and geo-location requirements, while new PoS geo-fencing and dual-connectivity rules improved the traceability and reliability of point-of-sale transactions as a direct response to the fraud risks that undermined trust in agent banking channels.
Also, policies to promote financial inclusion were advanced through structural channels, starting for February 2026 when the CBN approved the Bank of Industry’s Non-Interest Banking Window, to expand access to alternative and Sharia-compliant financing options for businesses and individuals who had previously been underserved by conventional banking products.
Nigeria’s exit from the Financial Action Task Force (FATF’s) grey list further underscored the credibility gains under Cardoso in the last three years. The landmark signalled to global financial institutions and correspondent banks that the country’s anti-money-laundering and counter-terrorism-financing controls had reached an internationally acceptable standard — a prerequisite for deeper integration with global capital markets.
A flurry of recognitions, and accolades
Cardoso’s achievements were not only acknowledged locally. They also earned the CBN global acclaim, with recognitions that signalled the impact of the cumulative effect of the reform initiatives in the fin system and the economy
On June 10, 2026, the CBN was named Central Bank of the Year at the Central Banking Awards in London, in recognition for sweeping reforms by the Bank under Cardoso which restored credibility, stabilised markets and repositioned the country’s economy.
In accepting the award, Cardoso struck a note of institutional humility rather than personal credit, telling the audience that the award was not a destination, but an encouragement to continue the work ahead.
He dedicated the award to the Bank’s board, management, and staff, which he said gave him the filip to thrive when it mattered most.
On its part, the International Monetary Fund (IMF) separately welcomed the CBN’s steps to build the country’s foreign reserves and support market confidence, while praising the foreign exchange reforms for supporting price discovery and liquidity.
Fiscal-monetary coordination: the quiet enabler
Perhaps, none of these achievements would have been achieved or sustained without closer coordination, cooperation and partnership between fiscal and monetary authorities in the economy.
Years of monetary financing of deficits in budgets by successive governments was a major driver of the crisis Cardoso inherited. Turning around that situation required the CBN and the fiscal authorities to work from a shared understanding of the trade-offs involved.
That institutionalised coordination showed that rather than the CBN acting as an unconditional backstop for government spending, the financial system regulator under Cardoso became a quiet but essential enabler of the inflation-targeting regime that allowed monetary tightening to work without being immediately offset by fiscal expansion.
The human cost and the road ahead
None of this progress has come without pain. The disciplined monetary tightening that rebuilt reserves and narrowed the FX gap also meant higher interest rates and a more difficult borrowing environment for businesses; the removal of multiple exchange-rate distortions initially pushed up the naira cost of imports; and inflation, even after its decline, remains a heavy burden on households still adjusting to a repriced economy. Critics have also argued that headline gains in reserves and rate unification have yet to fully translate into lower food prices or broad-based job creation, and that the pace of disinflation, while real, has been slower than many Nigerians would like. These are legitimate tensions in any credible stabilisation programme, and they will likely shape the debate over CBN policy in the years ahead.
What is obvious in all of this is that the reforms initiated by the CBN under Cardoso in the last 36 months were not part of an individual agenda, but products of collective effort involving the Board, management, and staff of the CBN, alongside the patience and resilience of ordinary Nigerians who bore the transitional costs of adjustment.
Three years solid reforms gives hope for the future
Three years at the helm of the institution Cardoso inherited amid crisis, has been substantially rebuilt through the collaboration and coordination between the fiscal and monetary authorities, with a unified, market-driven exchange rate in place, along with a strong recapitalised banking sector; record foreign reserves; decelerating inflation, and a payments and governance architecture designed with the next decade in mind.
The test now is whether these gains can be consolidated into durable, stable, broad-based growth that Nigerians feel not just in the headline statistics, but in their daily economic lives in line with mandates of the CBN as the architect of financial system stability and economic growth.
