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Economy

CBN Reforms Drive FX Inflows To $112b, Investors’ Confidence Rises

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The Central Bank of Nigeria (CBN’s) decision to clear over $7bn unsettled FX backlogs raised investors’ confidence in the economy, supporting dollar inflows and foreign reserves accretion. Nearly three years after the backlog clearance, FX inflows into the economy rose significantly hitting $112bn in 2025.

Market analysts said rising autonomous inflows, including diaspora remittances, foreign portfolio investment, non-oil export proceeds shows positive effect of the reforms in attracting foreign capital to the domestic economy.

The rising investors’ confidence in the economy started with a systematic planning and commitment to due process through policies initiated by a combination of Central Bank of Nigeria (CBN) and fiscal authorities.

The CBN’s decision to clear over $7bn unsettled FX backlogs raised investors’ confidence in the economy, supporting dollar inflows and foreign reserves accretion, CBN Governor, Olayemi Cardoso said.

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The CBN boss had explained that although he had no idea where the fund for the backlog clearance would come from, when he assumed office, but he believed it was the right thing to do, and gave investors his word.

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 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”.
Cardoso explained that Nigeria needed to ensure that its integrity is maintained.

He said the apex bank started with a forensic audit to understand the issues better and based on the recommendations, the backlog of foreign exchange transactions was paid, which was a huge sacrifice.

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He explained that “as a going concern, the CBN knows that if it expected people to continue to trust and invest in our economy, you’ve got to keep your promises”.

Some of these moves, including reforms in the exchange rate are key factors that continues to attract global investors into the economy.
Expectedly, forex inflows into the domestic economy closed 2025 at $112bn, a new report from Financial Markets Dealers Association (FMDA) has shown.

The forex inflows were dominated by autonomous sources — private capital flows outside the Central Bank of Nigeria (CBN’s) direct control — accounting for 64.94 per cent of total FX inflows during the year.

The report, which also showed that the Central Bank of Nigeria’s own FX sales rose by 126.37 per cent within the coverage period, hitting $8.94bn from $3.95bn recorded in the previous year.

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Autonomous inflows surged to $72.91bn in 2025, up from $59.29bn in 2024 and $41.80bn in 2023, reflecting a near-doubling of private-sector dollar flows in two years.

The FMDA data reveals a market in which rising autonomous inflows are progressively displacing CBN-supplied liquidity as the primary driver of FX availability, even as the apex bank continues to play a stabilising role.

Total FX utilisation reached $47.17bn in 2025, driven by a dramatic surge in invisible-related transactions and sustained industrial-sector demand. The data reveal a significant compositional shift in how Nigeria consumes its foreign exchange.

Invisible-related FX utilisation surged to $27.27bn in 2025 from $11.10bn in 2024, with financial services alone accounting for $21.22bn.

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Also, total import-related FX demand rose more moderately, from $15.54bn in 2024 to $19.90bn in 2025 while the industrial sector remained the largest merchandise-related source of demand at $8.43bn, up from $7.96bn in 2024.
“Oil-sector FX demand nearly doubled, from $2.26bn in 2024 to $4.98bn in 2025. Business services demand leapt from $702.38m to $3.48bn, while educational services demand fell sharply from $396.40m in 2023 to just $55.16m in 2025,” the report said.

The data indicates that invisible transactions — services, financial flows, and cross-border payments — have now eclipsed merchandise imports as the dominant driver of FX demand in Nigeria.

In the foreign exchange market, the country faced a backlog of over $7bn in unfulfilled commitments and a fragmented FX regime characterized by multiple forex rates, which had encouraged arbitrage opportunities.

This regime stifled much needed foreign investment, and led to the depletion of our external reserves which fell to $33.22bn in December 2023. It must also be understood that the cost of the FX subsidy regime is estimated to far exceed that of fuel subsidies.

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The apex bank has also undertaken critical reforms to unify Nigeria’s exchange rate, eliminating distortions and restoring transparency. This unification has enabled it to clear the outstanding foreign exchange obligations, giving businesses—ranging from manufacturers to airlines—the confidence to plan and invest in the future.

To further enhance the functionality of the foreign exchange market, the CBN introduced an electronic FX matching system, which has proven effective in other markets.

With these developments came positive Fitch Ratings on Nigeria economy, signaling positive fallout from the reforms.

The global rating agency said that from exchange rate unification to reduce arbitrage in the markets, introduction of electronic FX matching platform and a new FX code to enhance transparency and efficiency in the market as well as deployment of monetary policy tightening to keep inflation on check, the Central Bank of Nigeria (CBN) has demonstrated commitment to achieving sustainable economy growth and exchange rate stability.

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Already, the Fitch rating moved Nigeria’s long-term foreign-currency issuer default rating (IDR) from negative to stable, meaning that the country stands a better chance of attracting foreign investment, borrow money on international markets at better interest rates, and boost investor confidence.

Fitch also applauded government’s commitment to policy reforms implemented since its move to orthodox economic policies in June 2023, including exchange rate liberalisation, monetary policy tightening, and steps to end deficit monetisation as well as fuel subsidies removal.

“These have improved policy coherence and credibility and reduced economic distortions and near-term risks to macroeconomic stability, enhancing resilience in the context of persistent domestic challenges and heightened external risks,” the agency stated.
The S&P Global Ratings, also revised its outlook on Nigeria to “positive” from “stable” on Friday, backing the country’s ongoing economic reforms, and also affirmed the country’s rating at “B-/B”.

“The monetary, economic, and fiscal reforms being implemented by Nigerian authorities will yield positive benefits over the medium term,” S&P said.
Moody’s also upgraded Nigeria’s rating by one notch to “B3” from “Caa1”, citing notable improvements in the country’s external and fiscal positions, while Fitch last month kept its “B” rating and “stable” outlook.

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The rating agencies continue to cite FX reforms instituted by Central Bank of Nigeria (CBN) as crucial in the current macroeconomic stability and push to tame inflation.

President, Association of Bureaux De Change Operators of Nigeria, Dr. Aminu Gwadabe, applauded the rating upgrade.

He said the FX reforms have really supported the stability in exchange rate, and is helping the economy to achieve desired growth.

Other analysts described the S&P rating as ‘a significant step forward in restoring investor confidence and economic stability.”

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According to them, the development means an improvement in Nigeria’s creditworthiness, which could open up new opportunities for the country across several sectors.

Dr. Muda Yusuf, Convener of the Centre for the Promotion of Private Enterprise (CPPE), said the data pointed unambiguously to the impact of reform.
“The autonomous inflows are driven by the reform. Remittances from the diaspora, inflows from foreign portfolio investors, non-oil export proceeds — all manner of things outside the traditional sources of our forex. This reflects the fact that the reform has positioned the economy to attract those inflows,” he said.

On the rebound in CBN FX sales, Yusuf was careful to place the development in proper context.
“It is not necessarily because the CBN has significantly increased its intervention. A lot of inflows are coming in. Those are not CBN funds. In fact, there was a time the CBN was even buying forex on the market because of the liquidity. The bigger factor is the supply side — the fact that autonomous inflows have increased significantly,” he said.

The erstwhile Director General of the Lagos Chamber of Commerce and Industry (LCCI) also addressed the surge in invisible-related demand, noting that greater caution was needed before drawing conclusions.

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“Invisible covers a lot of things. When you are paying foreign debt, it is a financial services transaction. When airlines come to Nigeria, when shipping companies operate here, when expatriates come into oil and gas and tech — all of these services have to be paid for in foreign currency. There is a lot of international transaction going on now because of the confidence the reform has restored. That is what I think is behind that increase,” he explained.

Mr. Charles Fakrogha, CEO of ECL Asset Management, said the recovery in both FX sales and autonomous inflows was consistent with what the capital market was also signaling.

“The kind of activity we are seeing from the FX market shows there are a lot of activities in terms of imports and exports. Most of these companies import raw materials, some export finished products — all of this will account for the increase we are seeing,” he said.

However, Fakrogha expressed concern about the dominance of financial services in FX utilisation.

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“Financial services — you have seen a lot of activities. We have seen so many financial institutions springing up. And yet the real sector is not being carried along. When it is tough for financial services to give out loans and recover them, what happens? They go to the treasury bills market — safe investment. And the real sector suffers. These are the structural imbalances in the economy that we are seeing,” he noted.

On the role of exchange rate unification in driving inflows, Fakrogha was emphatic. “That is the fundamental of it. The unification has closed the gap for unnecessary speculation. The CBN has done quite a lot in terms of maintaining stability. If not for that unification, the dollar-naira rate would have gone beyond what we are seeing,” he said.

Mr. Aruna Kebira, CEO of Globalview Capital, argued that improved regulation and recapitalisation of financial institutions had been equally pivotal in attracting capital inflows.

“There is no direct investor that would not like to do business with a well-capitalised stockbroking firm. The regulation is so strong. All the banks are recapitalised, insurance companies are in the process of recapitalisation, and PFAs are also being recapitalised. Things have actually opened up,” he said.

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“Do you know that Nigerians in diaspora now have serious confidence in the Nigerian stock market? The movement from 58,000 to 250,000 points — it is not magic. Money is coming in. It is for investment,” said Kebira.

According to him, there is a growing confidence of diaspora investors as a structural source of autonomous inflows, stressing that several of them have already set aside funds for investing in upcoming Dangote Refinery’s Initial Public Offer (IPO).

Recall that on assuming office in October 2023, Cardoso had prioritised reforms to rebuild Nigeria’s economic buffers and strengthen resilience.

CBN’s policies, including the currency reforms, led to investment inflows from abroad, and reduced interventions in the domestic forex market.

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Over 5,000 fibre cuts recorded in six months – NCC

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The Nigerian Communications Commission (NCC) has disclosed that more than 5,000 fibre-optic cable cut incidents were recorded across the country in the first six months of 2026, with road construction, excavation and related civil works identified among the major causes.

The Executive Vice-Chairman of the NCC, Dr Aminu Maida, disclosed this on Tuesday at a stakeholders’ workshop on the protection of fibre-optic cables during road construction, excavation and other activities in Nigeria.

Maida said the high number of incidents required stronger collaboration between telecommunications operators, road contractors, government agencies, regulators and security institutions to prevent further damage to critical telecommunications infrastructure.

According to him, many of the incidents occurred because of inadequate coordination among stakeholders involved in road and other construction activities. He said the consequences of fibre cuts extended beyond the immediate physical damage to cables, stressing that they could disrupt essential services and affect millions of Nigerians.

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The NCC boss recalled the nationwide telecommunications disruption in February 2024, when fibre cuts, including those caused by road construction, affected one of the major telecommunications operators. He said millions of subscribers were unable to make calls, send messages or access the internet for several hours, while subscribers who moved to alternative networks caused congestion on those networks.

According to him, the incident demonstrated how damage to one network could quickly have wider national consequences.

“In the first six months of this year alone, more than 5,000 fibre cut incidents were reported from road excavation, construction, and related civil work. A damaged fibre cable is therefore not simply a cost to an operator, it is a cost to Nigerians and to the wider economy.

“Those affected were not numbers in an incident report. They were parents, businesses, workers, and citizens cut off from people and services on which they depended on,” Maida said.

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He stressed that preventing fibre cuts should be prioritised rather than waiting to repair damaged infrastructure after incidents had occurred.

Maida said telecommunications operators must provide accurate information on the location of their infrastructure and respond promptly when contacted before construction begins. He added that contractors must check for underground infrastructure before excavation and make adequate plans for its protection.

The NCC chief also urged regulators and security agencies to provide guidance and ensure accountability, stressing that coordination should form part of the design and execution of every relevant infrastructure project.

He said the commission remained committed to working with public and private stakeholders to make coordination a standard practice in road construction and other civil works.

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Earlier, the Director of Critical National Assets and Infrastructure Protection in the Office of the National Security Adviser, AVM Effiong Ewa, said the protection of fibre-optic infrastructure was a shared national responsibility.

Ewa noted that telecommunications infrastructure had been designated as Critical National Information Infrastructure, warning that negligence or interference that exposed the assets to damage could constitute an offence under Nigeria’s legal framework.

He called for strict adherence to established protocols, guidelines and procedures during construction and maintenance activities.

Also speaking, the Permanent Secretary, Federal Ministry of Works, Mr Rafiu Adeladan, said the ministry recognised that road and telecommunications infrastructure often operated within the same physical space.

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He said excavation, grading, reconstruction, utility relocation and other road activities could inadvertently damage vital fibre-optic infrastructure where adequate coordination and precautions were not in place.

Adeladan called for stronger mechanisms for coordination and information sharing before and during road construction activities. He said road contractors, consultants and relevant agencies should have access to accurate information on the location of telecommunications infrastructure before excavation begins.

On his part, the Permanent Secretary, Federal Ministry of Communications, Innovation and Digital Economy, Engr Nadungu Gagare, said protecting telecommunications infrastructure was not the responsibility of one institution, but required collaboration among government ministries, regulators, security agencies, construction companies, utility providers and other stakeholders.

Gagare said the Federal Government had established a tripartite standing committee on the protection of fibre-optic infrastructure to strengthen collaboration and promote a coordinated approach to infrastructure protection.

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He said the committee would also promote compliance with established standards and right-of-way regulations, improve information sharing and support measures to prevent avoidable damage.

The workshop, organised by the Federal Ministry of Communications, Innovation and Digital Economy in collaboration with the Federal Ministry of Works, NCC, Office of the National Security Adviser and Nigeria Security and Civil Defence Corps, is aimed at developing practical measures to protect fibre-optic cables during road construction and other civil works.

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NRS boss, Adedeji under fire over Nigerian economy comment

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Nigerians have tackled the Executive Chairman of the Nigeria Revenue Service, Zacch Adedeji, over his recent comment about critics of economic reforms under President Bola Ahmed Tinubu.

DAILY POST reports that in a viral video, Adedeji questioned critics of Tinubu’s economic reforms about what they would have done differently.

“That is what I get worried about when I listen to some people about the economy and everything.

“Just ask them, what would they do differently? Mr President, I don’t want you to wonder. You have elevated the system from what they know and wonder,” Adedeji told President Tinubu.

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Adedeji’s comment triggered reactions from Nigerians on X.

Reacting, a development professional and former Director-General of the Bureau of Public Service Reforms, Joe Abah, described Adedeji’s comment as insensitive.

“If true, this is a deeply insensitive statement.

“But to answer the question of what I would have done differently, I can just look at the UK’s Andy Burnham, who is trying to tackle the cost of living.

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“In just 19 days, he has removed the 5 percent VAT on domestic electricity (it is 7.5 percent in Nigeria); capped bus fares at £2 per ride by reimbursing private sector operators for the difference in real costs; pledged a 20 percent cut in business rates for pubs and clubs (an important part of British social life); maintained and adjusted Universal Credit to favour the poorest and most vulnerable.

“So, I would have used the increasing tax revenue to tackle the cost of living. That is what I would have done differently at my own level. Hope that helps,” he said on X on Saturday.

Similarly, a lawyer known, Vena Ikem wrote on X: “He should ask himself what all the millions of dollars he is spending mean to the tax he is collecting even from poor people. If karma truly fulfils, this man will get his just deserts in the land of the living. This arrogance is from getting away with stealing tax money.”

Also, Adekunle Oderinde wrote on X: “The entire convoy of Zacch Adedeji is more expensive and longer than the convoy of UK Prime Minister, yet he is talking about suffering Nigerians complaining about the effects of the policies of his principal, President Tinubu, who drives an expensive and long convoy on scarce resources.”

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RMAFC gives NUPRC 48 hours to dissolve host community trust

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The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has ordered the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to dissolve a disputed Host Community Development Trust within 48 hours, following allegations that it was established without proper consultation with the affected oil-producing communities.

The order was issued during an investigative hearing in Abuja into the operations of Sterling Oil Exploration and Energy Production Company (SEEPCO) and the implementation of the Host Community Development Trust provisions of the Petroleum Industry Act (PIA).

Speaking at the hearing, RMAFC Chairman Dr Mohammed Bello Shehu said the Commission would continue to protect the interests of oil-producing host communities and ensure they receive the benefits guaranteed to them under the law.

According to a statement issued on Friday by the Commission’s Head of Information and Public Relations Unit, Maryam Umar Yusuf, Dr Shehu described the investigation as a national assignment aimed at promoting accountability in the management of Nigeria’s petroleum resources.

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He said the Commission would continue to strengthen its oversight of oil companies and government institutions responsible for implementing the provisions of the Petroleum Industry Act, adding that transparency and accountability remain essential to protecting national revenue and restoring public confidence in the petroleum sector.

Dr Shehu commended members of the Commission’s Investment Monitoring Committee for their work and expressed optimism that the investigation would help ensure that host communities receive the full benefits provided for under the Petroleum Industry Act.

The Chairman of the Investment Monitoring Committee and Federal Commissioner representing Anambra State, Dr Ekene Enefe, led the investigation into SEEPCO’s compliance with the law establishing Host Community Development Trusts.

He said the era in which oil-producing communities endured environmental degradation and social hardship without corresponding development must end.

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According to him, both petroleum operators and regulatory agencies must fully fulfil their legal responsibilities to affected communities.

The Committee also expressed concern about SEEPCO’s repeated failure to honour invitations to appear before it, despite earlier engagements.

Dr. Enefe warned that no operator would be allowed to evade legitimate oversight by the Commission.

Addressing officials of the NUPRC, he said RMAFC’s constitutional responsibility requires it to hold every institution in the petroleum industry accountable for the proper discharge of its duties.

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He then issued a direct order to the regulator, saying: “We are going to give you 48 hours to dissolve that host community development trust.”

Dr. Enefe also faulted SEEPCO for what he described as its failure to meet obligations owed to host communities.

He said the company would receive a formal notice directing it to settle all outstanding obligations. “We are going to write them, and we are going to give them an ultimatum to pay up what is owed the host communities,” he said.

Enefe added that after completing its investigation, the Committee would forward its findings and recommendations to the appropriate authorities, insisting that the Commission would carry out its constitutional responsibilities without fear or favour.

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Earlier, the NUPRC delegation, led by the Director of Host Communities, Mrs. Ufondu Ejiro, defended the Commission’s handling of the Host Community Development Trust.

She told the Committee that the trust had been legally incorporated, properly funded and established in line with the Petroleum Industry Act.

According to her, the Commission received and reviewed documents covering community consultations, governance arrangements, funding plans and Community Development Plans before approving the trust.

She also presented records of contributions to the trust and maintained that the regulator had carried out its responsibilities in accordance with the Petroleum Industry Act and the Host Community Development Regulations.

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However, the affected host communities rejected the regulator’s position. Speaking on their behalf, legal representative Mr. Peter Chukwudi argued that several individuals presented as community representatives were not recognised by the affected communities.

He also disputed claims that adequate consultations had taken place before the trust was established.

Chukwudi questioned the level of development in the oil-producing communities despite years of petroleum exploration and urged the Committee to thoroughly investigate the issues raised by residents.

Also speaking, the Anambra State Commissioner for Petroleum and Mineral Resources, Prof. Charles Ofoegbu, called for stronger cooperation between the NUPRC and the Anambra State Government in verifying genuine community representatives and monitoring compliance with legal obligations.

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He also called for greater openness in the calculation of statutory contributions, operational expenditure and the execution of community development projects, saying the state government has a responsibility to protect the interests of its oil-producing communities.

The Federal Commissioner representing Rivers State, Ambassador Desmond Akawor, said there appeared to be a communication gap between the regulator and state governments, adding that closer cooperation would improve oversight of petroleum operations.

He also expressed disappointment at SEEPCO’s absence from the hearing and urged all parties to cooperate fully with the ongoing investigation.

The Federal Commissioner representing Kogi State, Abdulazeez Idris King, questioned whether documents submitted by operators alone were sufficient to confirm that genuine consultations had taken place before community representatives were recognised.

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Similarly, the Federal Commissioner representing Jigawa State, Hauwa Umar Aliyu, called on regulatory agencies to maintain professionalism, fairness and impartiality while carrying out their statutory duties.

She said regulators must inspire public confidence by giving equal attention to the interests of host communities as well as those of oil companies.

In his closing remarks, Dr. Enefe assured all stakeholders that every submission and documentary evidence presented before the Committee would be carefully examined before recommendations are made.

He said the Committee would continue its work until all relevant facts had been established, adding that the investigation forms part of RMAFC’s broader efforts to improve transparency, strengthen accountability and ensure that oil-producing communities receive the benefits guaranteed to them under the Petroleum Industry Act.

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