Cardoso: Foreign Capital Inflows Rise by 70% to $20.98bn in October

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Nume Ekeghe

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, yesterday, disclosed that foreign capital inflows in Nigeria surged to $20.98 billion in the first ten months of 2025 a, 70 per cent rise above 2024 levels and 428 per cent higher than the $3.9 billion recorded in 2023.

He noted that the surge reflects growing investor confidence, driven by structural reforms that have restored order, transparency and price discovery in the foreign exchange market. He also described Nigeria’s exit from the FATF grey list as one of the country’s most significant achievements in 2025, reiterating that grey listing carried a high cost, with countries typically facing a 7.6 per cent of GDP in inflows in the first year, equivalent to more than $30 billion in potential investment in Nigeria’s case.

He said this at the Chartered Institute of Bankers of Nigeria (CIBN) 60th annual bankers’ dinner in Lagos, yesterday.On Foreign Capital Inflow, he said: “Foreign capital inflows reached US$20.98 billion in the first ten months of 2025, a 70 per cent increase over total inflows for 2024 and a 428 per cent surge compared to the $3.9 billion recorded in 2023, reflecting a clear resurgence in investor confidence.”

He added: “Nigeria’s grey-listing carried a significant cost: countries in this category typically experience a 7.6 per cent of GDP drop in capital inflows in the first year, for Nigeria, that translates to more than $30 billion in potential investment.“Exiting the list therefore signals a major restoration of confidence and eases compliance frictions for correspondent banks.  The global financial community has welcomed Nigeria’s exit, noting improved access to international finance and smoother cross-border payments.”

He further projects that with the recent monetary reforms, disinflation would continue in 2026.“Recent reforms have begun to ease inflationary pressures, stabilise the exchange rate, and restore investor confidence. Our vision is clear: a Central Bank of Nigeria that is trusted and respected.“As we transition towards a full-fledged inflation-targeting framework, this partnership will deepen, ensuring fiscal and monetary policies reinforce each other in delivering durable price stability.”He further noted that Nigeria was beginning to reap the benefits of economic diversification, pointing to a marked decline in the dominance of the oil sector.

“A case in point is Nigeria’s improved economic diversification: with oil now accounting for a smaller share of our GDP, 33 per cent of government revenue, and 51 per cent of exports significantly reducing our vulnerability to oil price shocks.”On the country’s external reserves, he reiterated that the ongoing build-up reflects genuine economic strength rather than external borrowing.

He added: “What is most important here is that our FX reserves are being rebuilt organically, not by borrowing, but through improved market functioning, stronger non-oil exports, and robust capital inflows.”On the banking sector, Cardoso disclosed that the CBN was redesigning Nigeria’s credit-risk framework as recapitalisation progresses.

He said: “Our decisive actions on regulatory forbearance mark another turning point. As recapitalisation progresses, we are redesigning the credit-risk framework to enforce stronger governance, greater transparency, and firmer accountability across the sector.

“We are determined to break the boom-and-bust cycle that has accompanied past recapitalisation efforts.”He added that MSMEs remain central to the CBN’s strategy, noting that microfinance lending expanded.“MSMEs remain central to our efforts. This year alone, microfinance lending expanded by over 14 per cent, and new digital-credit products reached more than 1.2 million small enterprises evidence of the sector’s growing depth and capacity. We are improving access to credit, supporting microfinance institutions, and expanding financial products tailored to smaller enterprises.”On the exchange-rate framework, he affirmed the Bank’s commitment to stability, noting: “We are committed to maintaining the current flexible exchange-rate framework that allows the naira to act as a shock absorber while limiting excessive volatility.“To strengthen this framework further, we will shortly be unveiling the revised FX Manual to expand market participation and tighten documentation standards, enhance EFEMS surveillance, and ensure consistent implementation to avoid any possibility of policy reversal.”

Providing an update on the recapitalisation exercise, he stressed that the process remains firmly on schedule.Cardoso said: “With just four months to the conclusion of the recapitalisation exercise, I am pleased to report that the process is firmly on track. Several banks have already met the new capital thresholds, while others are advancing steadily and are well-positioned to comfortably meet the March 31, 2026 deadline.

“To date, twenty-seven banks have raised capital through public offers and rights issues, and sixteen have already met or exceeded the new requirements, a clear testament to the depth, resilience, and capacity of Nigeria’s banking sector.”He also made it clear that a key policy shift is now firmly entrenched, stating: “There will be no return to the practice of financing fiscal deficits by the Central Bank.

Cardoso outlined six strategic priorities for 2026, including strengthening banking-sector supervision, delivering durable price stability, modernising payments, fostering responsible fintech innovation, building institutional capacity, and deepening collaboration with domestic and international partners.