Cardoso: Clearing FX backlog boosted reserves

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says the clearance of the country’s foreign exchange (FX) backlog played a key role in the recent rise in Nigeria’s external reserves.

Cardoso spoke on Friday at the CBN Governor’s Annual Lecture Series, held at the Lagos Business School (LBS).

On March 20, the CBN announced that it had successfully settled all outstanding FX obligations — estimated at over $7 billion when Cardoso assumed office in 2023.

Nigeria’s external reserves rose by $1.03 billion in September 2025 alone, signalling renewed investor confidence following months of reforms.

“I had no idea in my mind that that particular action contributed in no small way, and it may not appear to many as such, but it contributed in no small way to the rise in foreign exchange reserves that we have been able to accomplish,” Cardoso said.

The governor explained that clearing the backlog was part of his pledge to restore the apex bank’s credibility.

“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. And it was at the time estimated at over $7 billion.

“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. We needed to ensure that we protected and maintained our integrity.”

Cardoso said a forensic audit was commissioned to clarify the scale of the obligations, after which the CBN began settlement.

He described the decision as a sacrifice, noting that some critics advised him to prioritise new obligations instead.

“Because 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,” he said.

The CBN governor stressed that credibility and trust are essential for attracting investors.

“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 say, oh I don’t have it.”

Cardoso added that maintaining public trust remains central to the CBN’s policies.