Central Bank of Nigeria (CBN) Governor Olayemi Cardoso says the clearing of outstanding foreign exchange (FX) obligations was a key factor behind the recent rise in Nigeria’s foreign reserves, underscoring his administration’s focus on credibility and investor confidence.
Speaking at the CBN Governor’s Annual Lecture Series at Lagos Business School, Cardoso said his commitment to settle inherited FX debts, which stood at over $7 billion when he assumed office, was non-negotiable despite uncertainty about how to fund it.
“When I took office, I made a promise that we would clear the verifiable backlog of monies that were owed by Nigeria to third parties,” he said. “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. We needed to ensure that we protected and maintained our integrity.”
The CBN announced in March that it had fully settled all outstanding FX obligations. Cardoso said the decision, though difficult, helped restore market confidence. “That particular action contributed in no small way to the rise in foreign exchange reserves that we have been able to accomplish,” he said.
The governor revealed that a forensic audit was commissioned to validate the backlog, and that payments were made strictly on its recommendations. “Some people would have argued that why pay it? It didn’t take place when you came there. Put existing obligations first and worry about that. But I said no, we cannot afford to do that,” Cardoso said.
He stressed that keeping Nigeria’s word was crucial to attracting capital. “People come to you, they invest in you when you have credibility and they trust you. They don’t put things with you and go away and come back and ask for it back and you say, oh, I don’t have it,” he said.
Cardoso added that credibility and trust will remain central to the CBN’s strategy for stabilising Nigeria’s economy and boosting investor confidence.
