Nigeria’s current account balance rose 85% to $5.28bn in Q2, bolstering external buffers – Cardoso

Nigeria’s external position has strengthened significantly on the back of a sharp rise in the current account balance, which grew by more than 85 per cent to $5.28bn in the second quarter of 2024, according to the Governor of the Central Bank of Nigeria, Olayemi Cardoso.

Cardoso, speaking at the 60th Bankers’ Dinner of the Chartered Institute of Bankers of Nigeria (CIBN) on Friday, said the improvement in external buffers – alongside rising reserves and stronger market fundamentals – shows that Nigeria is now better positioned to withstand global economic shocks.

He disclosed that the country’s foreign reserves rose to $46.7bn by mid-November, the highest level in nearly seven years, providing more than 10 months of forward import cover.

“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,” he said.

Recapitalisation drive on track

Cardoso also provided an update on the bank recapitalisation programme, revealing that 27 banks have accessed the market to raise fresh funds since the exercise began.

“With just four months to the conclusion of the recapitalisation exercise, the process is firmly on track,” he said. “Sixteen banks have already met or exceeded the new capital requirements, while others are advancing steadily and are well positioned to meet the March 31, 2026 deadline.”

The CBN in March 2024 directed commercial banks with international authorisation to raise their capital base to N500bn, national banks to N200bn, regional banks to N50bn, and non-interest banks to N20bn and N10bn depending on licence category.

Cardoso said stress tests conducted this year confirm that the banking sector remains “fundamentally robust”, with key prudential indicators comfortably within regulatory benchmarks.

Financial reforms boosting resilience

The CBN governor noted that reforms undertaken in 2024 – including the shift to a single market-determined exchange rate regime, deployment of the Electronic Forex Market Surveillance System, and enhanced risk-based supervision – have strengthened the economy’s shock-absorbing capacity.

“With oil now a smaller share of GDP and fiscal revenues, a sharp oil-price decline would be cushioned by the flexible FX regime, rising non-oil exports, and growing services trade,” he said.

He reaffirmed the CBN’s commitment to disciplined monetary policy and price stability, stressing that stability is the foundation for investment and sustained growth.

Cardoso also called for stronger collaboration to address rising insecurity, which he said remains a critical threat to economic progress.

Industry leaders highlight progress

In his remarks, the President of the CIBN, Pius Olanrewaju, said the Nigerian banking industry continues to demonstrate resilience, adaptability, and a strong commitment to supporting economic recovery.

He noted that many institutions have already met recapitalisation thresholds ahead of the 2025–2026 timeline, boosting investor confidence and positioning the sector to support Nigeria’s ambition of becoming a $1tn economy by 2030. He also highlighted Nigeria’s recent removal from the FATF grey list as a major confidence booster.

The Chairman of the Body of Bank CEOs and GMD/CEO of United Bank for Africa, Oliver Alawuba, urged banks to deepen lending to youths, SMEs, women entrepreneurs and the creative sector, stressing that credit is “a trust for the benefit of the economy” and not a tool for personal lifestyle funding.

He assured Nigerians of smooth banking operations during the festive season, noting ongoing collaboration with the CBN to ensure adequate cash availability and stronger cybersecurity as digital fraud risks evolve.