From Volatility to Stability: Three Years of Painstaking Reforms, by Rahma Olamide Oladosu
Leadership at a central bank is rarely measured by a single policy or one headline achievement. It is often found in the quieter changes that gradually reshape how money moves, how financial institutions operate, how businesses access capital and how confidently people interact with the financial system.
Since assuming office as Governor of the Central Bank of Nigeria on September 22, 2023, Olayemi Cardoso has presided over a period of significant reforms that have touched major parts of the financial system. From banking and foreign exchange to payments, consumer protection, financial markets and external reserves, the reforms have been directed towards building a system that is more resilient, transparent and better equipped to support economic activity.
The scale of these changes is worth examining, not simply as a list of what the Central Bank has done, but in terms of what they could mean for the wider economy.
One of the most significant developments has been the completion of the banking recapitalisation exercise. By March 31, 2026, 33 banks had met the revised minimum capital requirements, raising approximately ₦4.65 trillion in fresh capital, with about 72.55 per cent sourced domestically.
For an economy seeking stronger financial institutions capable of supporting large-scale investment, this is an important development. Banks with stronger capital positions are generally better placed to absorb shocks, manage risks and undertake financing that may be beyond the capacity of weaker institutions.
But the real significance of recapitalisation will ultimately be measured beyond bank balance sheets. The question is what the additional capacity will finance. If stronger banks can translate increased capital into more productive lending for businesses, infrastructure, manufacturing, energy, agriculture and technology, then the reform could have consequences far beyond the banking sector.
The same principle applies to the reforms in the foreign exchange market.
The introduction of the fourth edition of the Foreign Exchange Manual, reforms affecting Bureau de Change operations, changes to diaspora remittance settlement and the liberalisation of export proceeds all point towards a financial environment where transparency, traceability and market efficiency are receiving greater attention.
Foreign exchange remains an important transmission channel between monetary policy and the real economy. Businesses need access to foreign currency to import machinery, raw materials and other inputs, while investors need confidence that the market operates according to clearer and more predictable rules.
The reforms involving International Money Transfer Operators and International Oil Companies are therefore significant not merely because of their technical nature, but because they address how foreign currency enters and moves through the economy.
There is also a growing recognition that the future of banking cannot be separated from technology.
The launch of Payments System Vision 2028 represents another important step in that direction. Built around interoperability, security, inclusion, innovation, trust and collaboration, the roadmap seeks to position the payments ecosystem for a more integrated digital economy.
For ordinary Nigerians, some of the most noticeable changes may actually come from this area.
Whether it is the introduction of stronger controls around agent banking, PoS geo-fencing, dual connectivity or enhanced security for instant payments, these reforms speak directly to the everyday experience of financial consumers.
Digital payments have become part of daily life. People transfer money, pay bills, receive salaries, make purchases and run businesses through electronic channels. As dependence on these systems grows, so does the importance of making them secure and reliable.
That makes strengthened consumer protection and cybersecurity measures particularly relevant.
The revised cash policy, for instance, removed restrictions and charges on cash deposits while introducing new cash withdrawal thresholds. At the same time, financial institutions have been directed to improve their response to electronic fraud, strengthen advertising compliance and enhance identity verification through frameworks such as BVN and watchlist controls.
The deployment of the Cybersecurity Self-Assessment Tool and the introduction of automated standards for anti-money laundering, counter-terrorism financing and counter-proliferation financing further demonstrate the extent to which the financial system is becoming more technology-driven.
For a financial system becoming increasingly digital, cybersecurity is fundamental to public confidence.
Another less visible but important area of reform has been the modernisation of financial markets.
The introduction of the Nigerian Overnight Financing Rate provides a new transaction-based benchmark intended to improve price discovery, transparency, monetary-policy transmission and risk management. Reforms around the fixed-income market, discount window and liquidity management similarly point to efforts to strengthen the mechanisms through which monetary policy affects the wider economy.
These may sound technical to the average citizen, but financial-market infrastructure often determines how efficiently decisions made by a central bank eventually reach banks, businesses and households.
Then there is the question of reserves and financial stability.
The addition of locally sourced gold refined to international standards to Nigeria’s external reserves introduces another dimension to reserve diversification. More notably, external reserves have crossed the US$50 billion mark, the highest level in approximately 17 years, according to the CBN timeline.
Stronger external reserves do not automatically solve every economic problem, nor should they be viewed in isolation from other indicators. However, larger external buffers can provide greater capacity to manage external shocks and may support confidence in the economy.
Taken together, these reforms suggest that the current CBN administration has been attempting to address the financial system from several directions at once. The objective is not simply to make banks stronger, foreign exchange transactions more transparent or digital payments more secure. It is about developing a financial architecture capable of supporting a more complex and ambitious economy.
For me, however, the most important part of this story is what happens next.
Reforms are most meaningful when their benefits eventually become visible beyond institutions and policy documents. A stronger banking system should translate into greater financing opportunities. A more transparent foreign exchange market should provide businesses with greater predictability. A more secure payments ecosystem should give consumers greater confidence. Stronger reserves should provide a more durable external buffer. Better financial markets should improve the transmission of monetary policy.
That is where the public will ultimately assess the impact of these reforms, not only by the number of policies introduced or milestones recorded, but by how effectively those policies improve economic activity and confidence.
The accolades and international recognition that have followed Cardoso’s tenure may be noteworthy, but perhaps the more enduring recognition will come from the strength and stability of the financial architecture that remains after individual policies have moved beyond the headlines.
A central bank cannot single-handedly solve every economic challenge. But it can create conditions within which banks, businesses, investors and consumers can operate with greater confidence.
The period since Cardoso assumed office has seen considerable movement across Nigeria’s financial system. The task now is to ensure that the reforms do not remain impressive figures and policy milestones on paper, but continue to translate into a financial system that works more effectively for the economy and the people who depend on it.
That, ultimately, is where the real measure of reform lies.