Nigeria’s Economy Strengthening, CBN Tells Senate

The Central Bank of Nigeria (CBN), on Thursday, presented a positive outlook for the Nigerian economy in the second half of 2025 during its statutory briefing to the Senate Committee on Banking, Insurance, and Other Financial Institutions.

The Committee, chaired by Senator Adetokunbo Abiru (APC, Lagos East), commended the apex bank for the positive trajectory the nation’s economy has maintained since the beginning of the year.

It, however, urged the CBN to sustain and deepen its efforts to ensure a more stabilised economy in 2026.

In his presentation, the CBN Governor, Olayemi Cardoso, said real GDP growth continued on a positive path, with the economy expanding by 3.98% in the third quarter of 2025.

This, he noted, was higher than the 3.86% recorded in the corresponding quarter of 2024, although 0.25 percentage point lower than the preceding quarter.

“The key contributors to the broad-based growth include crop production, ICT, real estate, and financial & insurance services,” he said.

He further disclosed that inflation declined for the seventh consecutive month to 16.05% in October 2025, down from a peak of 34.6% in November 2024—the lowest rate in three years.

Food inflation, the largest component of the consumer price basket, also fell sharply to 13.12% in October, from 21.87% in August.

“This steady disinflation is restoring real purchasing power for households and businesses, and we remain fully committed to pushing inflation down to single-digit levels over the medium term,” he added.

On the foreign exchange market, the CBN Governor said the clearest indicator of renewed confidence was the dramatic narrowing of the gap between the official and parallel market rates.

“The once-substantial gap between the official and parallel market rates has shrunk to under 2%, down from over 60% a year ago,” he stated.

He added that the naira strengthened at the Nigerian Foreign Exchange Market (NFEM), trading at ₦1,442.92/$ as of November 26, 2025, compared with ₦1,551.08/$ in the first half of the year.

Nigeria’s foreign reserves, he noted, also rebounded strongly to $46.7 billion as of November 14, 2025—the highest level in nearly seven years—providing 10.3 months of import cover.

He disclosed that diaspora remittances surged by 66.7%, rising from about $200 million to around $600 million per month in recent months.

“Another important outcome was the clearance of the $7 billion verified FX backlog, which has restored credibility and confidence in the Nigerian economy,” he said.

Looking ahead, the CBN Governor assured the Committee that the outlook for 2026 is “very positive,” noting that Nigeria now ranks among Africa’s most advanced digital payments markets, driven by a vibrant fintech sector that has produced eight of the continent’s nine unicorns.

In his remarks, Senator Abiru praised the CBN’s monetary policy direction, noting that the Committee has observed remarkable macroeconomic improvements since its last interaction with the Bank in July.

“These positive indicators have not gone unnoticed globally. I commend the Bank and its leadership for contributing to improved sovereign ratings from Fitch and S&P Global Ratings, which reflect enhanced investor sentiment, policy credibility, and macroeconomic stability,” he stated.