The Central Bank of Nigeria has received global recognition for a reform programme that has reshaped the country’s monetary landscape, earning the apex bank the “Central Bank of the Year” title at the 2026 Central Banking Awards.
The honour reflects a sweeping set of policy and institutional changes introduced over the past two years to stabilise Nigeria’s financial system and rebuild confidence among investors and businesses. According to the awards committee, the recognition acknowledges a decisive return to orthodox monetary policy, improved governance, and reforms that have strengthened market stability.
The award comes after a period when Nigeria’s economy was under significant pressure. By 2023, inflation had climbed to 22.4 per cent, foreign exchange liquidity had deteriorated, and the country faced about $7bn in unmet foreign exchange obligations. At the same time, the difference between the official and parallel market exchange rates widened to over 60 per cent, reflecting deep distortions within the currency market.
The broader economic context further underscored the urgency of reform. Nigeria, which held the position of Africa’s largest economy in 2014, had fallen to fourth place behind South Africa, Egypt, and Algeria. The combination of monetary financing and subsidy-related interventions had pushed economic management into what the awards committee described as an unsustainable position.
One former senior central bank official, quoted in the committee’s statement, recalled that the situation had become so concerning that analysts feared Nigeria might be drifting toward the economic turmoil experienced in Venezuela and Zimbabwe, as worries intensified over fiscal instability, currency depreciation, and weakening institutional independence.
A shift began in October 2023 when Olayemi Cardoso assumed office as Governor of the Central Bank of Nigeria. His administration quickly introduced wide-ranging reforms aimed at restoring credibility to the institution and strengthening macroeconomic stability.
Central to the reform programme was a commitment to end quasi-fiscal interventions, reinforce institutional independence, and restore discipline to monetary policy. Clearing the country’s foreign exchange backlog and improving transparency within the financial system were also identified as immediate priorities.
One of the most visible changes came in the restructuring of Nigeria’s foreign exchange market. For years, multiple exchange-rate windows had created inefficiencies and uncertainty for investors and businesses. The CBN replaced this fragmented structure with a unified, market-driven system operating on a willing-buyer, willing-seller framework, supported by an electronic FX matching platform designed to enhance transparency and improve price discovery.
The impact of the reforms became evident in the behaviour of the naira. According to Cardoso, the currency now trades within a much narrower and more stable band, while the gap between official and parallel market rates has reduced dramatically to under 2 per cent, compared with over 60 per cent before the reforms.
Another major step involved clearing outstanding foreign exchange commitments owed to key sectors such as aviation and manufacturing, a move that helped restore liquidity and ease long-standing concerns within the business community.
As liquidity improved, Nigeria’s external buffers strengthened. The country’s gross external reserves rose to $46.7bn by November 2025, representing the highest level recorded in nearly seven years and providing more than 10 months of import cover. The improvement was supported by stronger capital inflows and increased non-oil exports, which helped reinforce stability within the foreign exchange market.
In its July 2025 Article IV assessment, the International Monetary Fund commended the reforms, noting that they had strengthened confidence in Nigeria’s markets and improved liquidity conditions within the foreign exchange system.
At the same time, the CBN pursued an aggressive strategy to rein in inflation where Interest rates were raised from 18.75 per cent in 2023 to 27.5 per cent by November 2024, marking one of the most assertive tightening cycles in the bank’s recent history.
Although inflation initially rose to 34.80 per cent in December 2024, largely due to subsidy removal and currency liberalisation, the tightening measures gradually began to take effect.
By January 2026, inflation had declined significantly to 15.10 per cent, while food inflation moderated to 8.9 per cent, reflecting improved price stability across the economy.
With inflation easing, the central bank cautiously adjusted its stance, lowering the benchmark interest rate to 26.5 per cent in February 2026. Even so, Cardoso has stressed that the bank remains committed to bringing inflation down further, emphasising that double-digit inflation cannot be acceptable in the long term. The CBN is now working toward a more structured inflation-targeting framework, supported by stronger data systems and clearer policy communication.
Beyond monetary policy, reforms also targeted the resilience of the banking sector. In 2024, the central bank introduced a recapitalisation programme requiring banks to meet higher capital thresholds designed to strengthen the financial system.
Since then, more than 33 banks have raised fresh capital, while at least 30 institutions have already met the new requirements ahead of the March 31, 2026 deadline. Institutions that fail to comply may face licence downgrades, acquisitions, or liquidation.
Supervisory oversight has also been strengthened through the transition toward Basel III standards, which aim to improve risk management and liquidity monitoring within the banking industry.
Financial inclusion has also expanded during the reform period. Microfinance lending grew by more than 14 per cent, while digital credit products reached over 1.2 million small businesses in 2025, widening access to finance for entrepreneurs and small enterprises across the country.
The digital payments ecosystem has grown rapidly as well. The CBN introduced measures to improve cash management systems, increase ATM efficiency, and enhance supervision of payment agents nationwide. Currently, more than 12 million contactless cards are in circulation, while about 40 fintech companies operate within the CBN’s regulatory sandbox, where new financial technologies are tested under regulatory oversight.
Governance reforms have also played a critical role in restoring international confidence. The central bank established a dedicated compliance department and strengthened anti-money laundering controls, efforts that contributed to Nigeria’s removal from the Financial Action Task Force grey list in 2025.
The policy improvements have been reflected in global credit ratings. Fitch upgraded Nigeria’s rating from B- to B with a stable outlook in April 2025, while Moody’s raised its rating from Caa1 to B3 in May, citing stronger economic fundamentals and improved policy credibility.
Investor confidence was further demonstrated when Nigeria returned to the international capital market in 2025, issuing a $2.35bn Eurobond that was oversubscribed more than five times, highlighting renewed global interest in the country’s debt.
Despite the progress, the awards committee cautioned that the reform process is still ongoing. Sustaining disinflation, completing the banking sector recapitalisation programme, and strengthening institutional frameworks remain critical tasks.
Nevertheless, the committee concluded that the transformation achieved by the central bank has been significant. As one former official observed, “What the CBN has achieved is nothing short of remarkable.”
For Nigeria, the recognition marks an important moment in the country’s economic journey, signalling that determined reforms can begin to restore stability, rebuild confidence, and reshape the trajectory of one of Africa’s most influential economies.