CBN’s Money Crisis and Cardoso’ Magic
By Zekeri Idakwo Laruba
From a $7 billion backlog and a collapsing naira to $46.8 billion in external reserves and sustained disinflation, Nigeria’s foreign exchange stabilisation effort stands as one of the most consequential monetary recalibrations in its modern history.
Yet beyond the numbers lies a deeper story — one of restored confidence. And in financial systems, confidence is not rebuilt by policy alone. It is earned through clarity, consistency, and credibility in communication.
For much of the period following the appointment of Olayemi Cardoso, Nigeria’s foreign exchange market faced more than a liquidity shortage. It confronted a crisis of trust. The naira was under sustained pressure, businesses struggled to plan, investors hesitated, and households bore the burden of rising prices.
At the height of the turbulence, the Central Bank of Nigeria faced a dual challenge: stabilising the currency and stabilising expectations. The latter, in many respects, was the more complex task.
From Distortion to Disclosure
From his earliest public statements, Cardoso made it clear that the era of multiple exchange rates, opaque interventions, and administrative distortions had to end.
For years, Nigeria had maintained an artificial valuation of the naira through administrative controls — a system that, much like the fuel subsidy regime, created the illusion of stability while imposing hidden economic costs. These included depleted reserves, reduced investor confidence, and restricted access to foreign exchange for productive sectors.
By openly acknowledging these distortions, the Central Bank signalled a decisive break from the past. In communication terms, this was foundational: aligning official narrative with economic reality.
This honesty marked the first step in rebuilding credibility.
Monetary Tightening and Message Discipline
Throughout 2024, the Monetary Policy Committee implemented one of the most aggressive tightening cycles in Nigeria’s recent history. The February 2024 meeting alone delivered a 400 basis point increase in the Monetary Policy Rate — from 18.75 per cent to 22.75 per cent. By the end of the cycle, cumulative increases totalled 1,525 basis points, raising the MPR to 27.5 per cent.
Yet the significance of these decisions extended beyond their numerical impact.
Each policy move was accompanied by structured communication — detailed communiqués, press briefings led by the Governor, and forward guidance that explained both rationale and expected outcomes. These engagements transformed technical decisions into confidence signals.
They acknowledged pain, clarified intent, and provided markets with the predictability required for rational behaviour. From a public relations perspective, this consistency was critical. It repositioned the Central Bank from a reactive institution to a credible policy anchor.
Clearing the Backlog: Action Meets Narrative
Perhaps the most decisive intervention was the clearance of the $7 billion verified foreign exchange backlog.
For businesses and investors, this backlog symbolised institutional unreliability — a breakdown in the system’s ability to honour commitments. Its clearance was therefore more than a financial adjustment. It was a reputational reset.
By systematically settling these obligations — and communicating progress transparently — the Central Bank sent a clear message: commitments would be honoured.
Complementing this was the restructuring of the Bureau de Change segment, including the revocation of licences for over 4,000 non-compliant operators and the introduction of a more disciplined regulatory framework. Together, these measures reinforced a narrative of clean-up and forward discipline.
From Volatility to Measurable Stability
The results of this combined strategy, policy reform reinforced by disciplined communication — are now evident.
External reserves rose from approximately $33.6 billion in October 2023 to $46.8 billion by early 2026, a near $13 billion improvement. Import cover expanded significantly. Headline inflation declined sharply from 34.8 per cent in December 2024 to 15.15 per cent by December 2025, while food inflation moderated.
The naira stabilised, trading around ₦1,385 to the dollar, with modest recovery from its weakest levels. Nigeria’s removal from the Financial Action Task Force grey list in 2025 further strengthened investor confidence, signalling improved financial governance.
Foreign portfolio inflows increased, and risk perception around Nigerian assets began to ease.
These outcomes reflect more than technical success. They demonstrate the reinforcing role of communication in sustaining reform credibility.
Communication as a Stabilisation Instrument
Throughout the reform period, the Central Bank maintained a steady and deliberate communication posture.
It engaged financial journalists, addressed market participants, participated in international forums, and utilised digital platforms to explain policy direction. This continuous engagement reduced misinformation, shaped expectations, and prevented panic-driven behaviour.
In volatile markets, silence creates space for speculation. The Central Bank’s decision to communicate consistently ensured that its narrative remained authoritative.
From a communication standpoint, this is a defining lesson: credibility is built not only through action, but through explanation. Facts delivered early and clearly can stabilise markets as effectively as direct intervention.
From Crisis to Credibility
At the height of the crisis, the Central Bank did not rely on policy tools alone. It deployed communication — deliberate, disciplined, and consistent — as an integral component of its stabilisation strategy.
It spoke when silence would have fuelled uncertainty. It explained when complexity could have confused. It reassured when anxiety was at its peak. And in doing so, it helped restore order to a market driven as much by perception as by fundamentals. The Work Ahead
Despite these gains, the reform journey remains incomplete.
Macroeconomic stability must translate into tangible improvements in everyday life, lower prices, increased purchasing power, and accessible credit. Inflation, though declining, remains above long-term targets. Structural pressures on the naira persist.
The next phase is therefore clear: moving from stabilisation to growth.
This transition will require sustained policy discipline, institutional alignment, and a communication strategy that bridges macroeconomic progress with lived experience.
A Foundation Rebuilt
After the storm, what remains is not merely a calmer foreign exchange market.
It is a stronger institutional foundation, built on policy credibility, reinforced by communication clarity, and anchored in renewed trust.
In modern financial systems, where perception moves as quickly as capital, that alignment is not optional. It is essential.