Cardoso to replicate remittance reforms for FX diversification

The Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, has said Nigeria will replicate the reforms that boosted diaspora remittances to diversify its foreign exchange (FX) earnings and reduce dependence on crude oil exports. He made the remarks on 15 October 2026 during discussions at the IMF–World Bank Annual Meetings in Bangkok, where he highlighted Nigeria's macroeconomic stability and rising external buffers.

Cardoso said the CBN engaged Nigerians abroad, international investors and other stakeholders to remove obstacles to regular remittance transfers, drawing lessons from countries such as India and Egypt. That initiative helped raise monthly diaspora remittance inflows from about $200 million at the start of 2025 to $600 million by the end of the first year, and subsequently to about $950 million monthly by July 2026, close to the CBN's target of $1 billion. He noted that the bank would apply the same approach to other sectors, including commodities and oil, to unlock additional sources of FX.

Strengthening external buffers

Cardoso also pointed to Nigeria's growing external reserves, which stood at $55.1 billion as of 13 October 2026, the highest level in 18 years, according to CBN data. He said the reserve build-up, alongside the relative stability and appreciation of the naira, had helped shield Nigerians from global economic shocks, including the effects of war and tariff uncertainties. The CBN's efforts to improve market functioning through a willing-buyer, willing-seller approach and reduced reliance on direct intervention had also narrowed the premium between the official and parallel exchange rates to below two per cent.

The governor emphasised that the benefits of these reforms extended beyond financial markets to households and businesses. He said lower inflation remained a key priority, noting that a stable and appreciating exchange rate helped ease price pressures. These outcomes, he argued, were laying the foundation for renewed investor confidence and stronger economic growth. Alongside monetary reforms, Cardoso highlighted domestic refining, particularly the Dangote Refinery, as an opportunity to shift away from exporting crude oil and importing refined products, retaining more value in the domestic economy.

Implications for policy

Cardoso's comments reflect the CBN's focus on expanding non-oil sources of FX and sustaining macroeconomic stability. The increase in formal remittance inflows through improved channels is a structural shift that, if sustained, supports reserve accumulation and reduces reliance on volatile oil receipts. Replicating that playbook for commodities and other sectors will require continued policy consistency, transparency in FX markets and efforts to bring more transactions into formal channels.

As Nigeria continues to implement its reform agenda, the challenge remains translating these gains into tangible improvements in living standards. With reserves at their highest level in 18 years and remittances approaching $1 billion monthly, the CBN sees diversification as the next frontier in building resilience against external shocks while supporting long-term economic stability.