The Central Bank of Nigeria’s (CBN) recent reforms have started yielding positive results, as foreign investors increasingly show confidence in the Nigerian market. According to senior officials of a reputable international bank with significant exposure to Africa, the lender’s strategy for 2025 is to “sell everything and buy Nigeria.”
The CBN’s reforms, led by Governor Olayemi Cardoso, have introduced greater transparency in the foreign exchange market, including the launch of the Electronic Foreign Exchange Matching System (EFEMS) in December last year. This move has attracted dollar inflows, stabilized the naira, and increased interest rates on treasury bills.
The naira has hit an eight-month high of 1474.78/$ at the official foreign exchange, making it an attractive investment opportunity for foreign investors and local manufacturers. Market rates have also been rising since last year, with one-year treasury bills yielding 27% and seven- and 10-year bonds selling at around 22.50% at a recent auction.
J.P. Morgan’s recent report, “Emerging Market Frontier Local Markets Compass,” notes that Nigeria’s reforms have made its securities more attractive, predicting a strong performance for the naira in 2025. Local analysts believe that these reforms may pave the way for Nigeria’s readmission into the JPMorgan Government Bond Index-Emerging Markets (GBI-EM).
The CBN’s reforms have also included removing the cap on transactions done by International Money Transfer Operators (IMTOs) to attract diaspora dollars and asking banks to offload excess dollars. These moves have contributed to the naira’s stability and increased investor confidence in the Nigerian market.
