Nigeria’s recovery shows how reserves and credible reforms can restore investor confidence. L-R: Randall Duran, CEO of Catena Technologies and Senior Lecturer of Information Systems at Singapore Management University; Dr Olayemi Cardoso, Governor of the Central Bank of Nigeria/HANDOUT L-R: Randall Duran, CEO of Catena Technologies and Senior Lecturer of Information Systems at Singapore Management University; Dr Olayemi Cardoso, Governor of the Central Bank of Nigeria/HANDOUT Nigeria’s recovery from a foreign exchange crisis offers Kenya a lesson in rebuilding investor confidence that financial stability requires strong reserves, credible reforms and predictable policies.
The country’s net foreign reserves have risen to $46 billion from less than $1 billion at their lowest point, while inflation has fallen from above 30 per cent in 2023 to about 15 per cent, according to Central Bank of Nigeria Governor Olayemi Cardoso. “The gains reflect reforms aimed at restoring stability after years of foreign exchange shortages and declining investor confidence,” Cardoso said at the Nigeria-Asia Financial Connectivity Dialogue in Singapore on October 8.
For Kenya and other African economies competing for global capital, Nigeria’s recovery raises a critical question: can economic reforms deliver lasting stability and convince investors that the risks of doing business are manageable? Cardoso said the turnaround had been supported by tighter monetary policy, changes to the foreign exchange market and reforms to strengthen commercial banks.
The experience underscores the importance of predictable regulations and functioning currency markets, which allow businesses to plan and investors to commit capital with greater confidence. Nigeria also demonstrated the importance of domestic financing. Cardoso said about 72 per cent of funds raised by Nigerian banks during a recapitalisation exercise came from local sources.
For Kenya and its East African neighbours, strengthening domestic capital markets and mobilising local savings could reduce reliance on foreign financing and protect businesses from sudden shifts in international investment flows. Nigeria is also seeking Asian investment in financial technology and digital services, an area where Kenya has established a strong presence.
Cardoso said regulators must encourage innovation without compromising financial stability.