Governor of the Central Bank of Nigeria, Olayemi Cardoso | Credit: CBN The decision to clear over $7bn in unsettled foreign exchange obligations has boosted investor confidence, as rising diaspora remittances, portfolio investments, and non-oil export earnings have strengthened reserves and accelerated recovery in Nigeria’s foreign exchange market, JIDE AJIA writes The decision by the Central Bank of Nigeria to clear more than $7bn in unsettled foreign exchange obligations has continued to bolster investor confidence in the Nigerian economy, strengthen dollar inflows, and support the accretion of external reserves.
Almost three years after the clearance of the backlog, foreign exchange inflows into the Nigerian economy rose sharply, reaching $112bn in 2025, according to data from the Financial Markets Dealers Association’s latest report. Analysts said the growth in autonomous inflows, including diaspora remittances, foreign portfolio investments, and non-oil export proceeds, reflected the positive impact of ongoing reforms in attracting foreign capital into the domestic economy.
The improvement in investor confidence followed a systematic policy direction and commitment to due process driven by coordinated measures from the Central Bank of Nigeria and fiscal authorities. CBN Governor, Olayemi Cardoso, said the apex bank’s move to clear the outstanding FX backlog was central to restoring confidence in Nigeria’s economy and attracting foreign investment.
According to him, the decision reinforced the credibility of the country’s monetary authorities and assured investors that Nigeria would honour its obligations. Cardoso had explained that although the funding strategy for settling the obligations was uncertain when he assumed office, he believed paying the verified claims was necessary to rebuild trust in the economy.
He said, “Credibility is at the heart of any central bank. If you don’t have credibility, people do not trust you, and they do not invest in your economy. When I took office, I made a promise that we would pay the backlog, the verifiable backlog of monies that were owed by Nigeria to third parties.
And it was, at the time, estimated at over $7bn. And to be honest with you, I had no idea how I was going to do it, but I just felt it was not something to be negotiated.” According to Cardoso, maintaining Nigeria’s integrity in the global financial system was essential.
He explained that the apex bank commenced a forensic audit to properly assess the claims and determine the legitimacy of the outstanding obligations. Following the recommendations of the audit, the bank proceeded with the settlement of verified FX transactions despite the huge financial sacrifice involved.
He stated that, “as a going concern, the CBN knows that if it expects people to continue to trust and invest in our economy, you’ve got to keep your promises.” Market observers noted that these measures, alongside exchange rate reforms and efforts to improve market transparency, have continued to encourage foreign investors to channel funds into the economy.
$112bn inflows A report by the Financial Markets Dealers Association showed that forex inflows into the Nigerian economy climbed to $112bn in 2025, underscoring the increasing confidence of investors and market participants in the country’s economic reforms. The report indicated that autonomous inflows accounted for 64.94 per cent of total FX inflows during the year, highlighting the growing role of private capital flows outside the direct control of the CBN.
It also showed that the Central Bank of Nigeria’s FX sales increased by 126.37 per cent during the period under review, rising to $8.94bn from $3.95bn recorded in the previous year. Autonomous inflows surged to $72.91bn in 2025, compared to $59.29bn in 2024 and $41.80bn in 2023, reflecting a sharp increase in private-sector foreign exchange inflows within two years.