Gold, Grit and Vision: How Cardoso is Pushing Nigeria’s Reserve Reawakening, by Rahma Olamide Oladosu
In a time when confidence in economic governance often hangs by a thread, the Central Bank of Nigeria’s recent decision to diversify the country’s external reserves away from an overwhelming dependence on the United States dollar deserves a closer, more generous look. For decades, the greenback has reigned supreme in Nigeria’s reserve composition, serving as both shield and shackle in an increasingly uncertain global financial architecture. But Governor Olayemi Cardoso, in a series of calculated and methodical moves, is challenging the orthodoxy. Under his leadership, the apex bank has announced a measured but bold plan to expand Nigeria’s reserve holdings to include the Euro, Chinese Yuan, Japanese Yen, Gold, and Special Drawing Rights from the International Monetary Fund (IMF). It is not just an economic maneuver. It is a recalibration of Nigeria’s monetary compass and a noteworthy act of economic statesmanship in turbulent times.
The idea of shifting away from the United States Dollar, which accounts for the majority of global trade invoicing and reserves, may initially seem counterintuitive. After all, the dollar’s liquidity, perceived safety, and network effects have made it the default store of value for many emerging markets. But therein lies the risk. Nigeria, like several other developing economies, has become increasingly exposed to the vulnerabilities that accompany overdependence. From the rapid interest rate hikes by the United States Federal Reserve that tightened global liquidity, to sanction regimes and geopolitical frictions that disrupt dollar access, the Naira has too often found itself as collateral damage in battles it did not choose. Cardoso’s reserve diversification plan is a deliberate step away from that vulnerability. It sends a message to markets and institutions alike that Nigeria is willing to look beyond tradition and move towards pragmatism.
To be clear, the economic rationale behind diversification is not new. Many countries have been pursuing it, but few have done so with the clarity and transparency that now defines Nigeria’s evolving monetary policy under Cardoso. Countries like India, Russia, Brazil, and even oil-rich Gulf states have gradually expanded their reserves into gold and non-dollar assets, not out of ideological opposition to the dollar but out of strategic necessity. In this global reordering, Nigeria’s move is not just timely. It is also imperative.
However, diversification is not without its tradeoffs. Nigeria’s current foreign reserves are still modest, hovering between thirty five and thirty eight billion dollars, with significant portions already committed to obligations such as swaps and debt servicing. The allocation of limited resources into a broader basket of currencies and gold introduces management complexity. Gold, though historically a reliable store of value, is non-yielding and entails storage and security costs. The Euro and Yen are relatively stable but can also be subject to sharp regional downturns. The Yuan, despite China’s economic size, carries risks due to Beijing’s strict capital controls and recent signs of economic slowdown.
Even so, diversification does not mean abandonment. The United States dollar will still likely dominate Nigeria’s reserve profile for the foreseeable future. What the Central Bank is doing is adding layers of insulation, reducing mono-exposure while building resilience into the system. This is forward-thinking monetary policy, reflective of a world no longer governed by single-pole economic power but a patchwork of interdependent centers.
Critics may argue that this pivot is cosmetic without a strong export base, fiscal prudence, and macroeconomic stability to support it. They are not entirely wrong. Diversifying reserves without addressing foundational issues such as low revenue mobilisation, excessive import dependence, and anemic productivity would be akin to rearranging the furniture in a burning house. But it would be unfair to view Cardoso’s actions in isolation. The Central Bank under his leadership has shown commendable coherence, discipline, and realism in confronting a mountain of inherited challenges. The unification of the exchange rate, the renewed focus on transparency, the reining in of fiscal dominance, and now the strategic shift in reserves management are all part of a broader vision of long-term macroeconomic stability.
Rather than dismiss this diversification as a desperate hedge bet, it is more accurate to describe it as a hedge built on thoughtful anticipation. It acknowledges global realignments, the rise of the BRICS bloc, the politicisation of dollar access, the volatility of commodity cycles, and prepares Nigeria to navigate them with greater dexterity. It is also a signal to international investors that Nigeria is willing to adapt, to think in decades rather than election cycles, and to govern with both hands on the wheel.
There are symbolic and psychological benefits too. For a country that has suffered multiple episodes of dollar scarcity, the idea that its reserves are not tethered to a single foreign monetary authority can build internal confidence. It sends a message to Nigerians that the apex bank is not reactive but proactive. And in a time when central banking credibility is often in question, perception is half the battle.
Governor Cardoso’s stewardship of the Central Bank is gradually revealing itself as an exercise in stability over spectacle. He has resisted the temptation of flashy interventions and chosen instead to invest in the less glamorous but more essential architecture of resilience. The reserve pivot is not just about numbers in a ledger. It is a signal of intent, a philosophical shift toward self-determination in monetary affairs.
What remains crucial is consistency. Diversification must not be a one-off headline but a sustained policy supported by skilled reserve managers, sophisticated risk assessment tools, and continuous market engagement. The Central Bank must deepen its communication strategy so that Nigerians and the wider world understand not only what is being done but why. The true hedge, in the end, lies not only in the composition of assets but in the credibility of those managing them.
This move may not immediately solve the problem of naira depreciation or transform Nigeria’s economic landscape overnight. But great outcomes are often the result of cumulative shifts, of small but deliberate turns toward the right direction. In that context, the decision to pivot reserves toward gold and other non-dollar assets may well be one of the most consequential policy moves of this era.
In all of this, Cardoso and the Central Bank of Nigeria deserve praise. Not for defying convention but for recognising that convention, when no longer effective, must give way to innovation. Not for chasing applause but for anchoring the future. Not for running from the storms of global finance but for equipping Nigeria with the tools to weather them with dignity and confidence.
The question of whether this is a hedge or a hedge bet may linger for analysts and skeptics. But for now, it is a hedge against stagnation. A hedge against helplessness. A hedge for a better and more balanced monetary future. And that, by every reasonable standard, is a move in the right direction.
Oladosu is a Staff Writer with the Economic Confidential