CBN Named Global ‘Central Bank of the Year’ in London
By Patience Ikpeme
In a major recognition of Nigeria’s aggressive return to orthodox monetary policy, the Central Bank of Nigeria (CBN) has been named the “Central Bank of the Year 2026.”
The prestigious honor was announced by the Central Banking Awards Committee during the 13th annual ceremony in London, coinciding with President Bola Ahmed Tinubu’s state visit to the United Kingdom.
The award serves as a global validation of the sweeping reforms led by Governor Olayemi Cardoso, which the committee says rescued Africa’s most populous nation from the brink of a historic financial collapse.
From the Brink to Recovery
The Awards Committee provided a sobering assessment of the “serious hole” the Nigerian economy occupied by 2023. At that time, the nation had slipped from being Africa’s largest economy in 2014 to the fourth largest, trailing South Africa, Egypt, and Algeria. The committee noted that by late 2023, the central bank had failed to honor a $7 billion backlog in matured foreign exchange (FX) obligations, while inflation soared from 15.4% in 2021 to over 22%.
“The nation looked more likely than not to be heading the way of Venezuela and Zimbabwe,” a former top CBN official told the committee. The official added that when President Tinubu assumed office in May 2023, he inherited an economy “on the brink of hyperinflation” and “fiscal bankruptcy,” largely due to “the total loss of CBN autonomy” under the previous administration.
The path to recovery involved difficult choices, including the removal of fuel subsidies and the liberalization of the FX market. While these moves initially pushed inflation to a 28-year high of 34.80% in December 2024, the committee found that the subsequent “disciplined orthodox monetary policy” and institutional reforms were successful in restoring investor confidence.
Restoring Currency Credibility
Central to the CBN’s recognition was the overhaul of the foreign exchange market. By transitioning to a “willing-buyer, willing-seller” framework and introducing the Electronic Foreign Exchange Matching System (EFEMS), the bank eliminated the opacity that previously defined Nigerian currency trading.
The results of these technical reforms have been tangible. “The naira now trades within a narrow, stable range. The once-substantial gap between the official and parallel markets has shrunk to under 2%, down from over 60%,” Governor Cardoso stated in late 2025.
Furthermore, Nigeria’s FX reserves were rebuilt organically, reaching $46.7 billion by mid-November 2025—the highest level in nearly seven years. This recovery was noted by the International Monetary Fund (IMF), which praised the bank for reforms that supported “price discovery and liquidity.”
Taming the Inflationary Surge
Under Cardoso’s leadership, the CBN made tackling inflation its primary mission, raising interest rates sharply from 18.75% in 2023 to 27.5% by late 2024. This aggressive stance saw inflation tumble from over 32% in December 2024 to 15.10% by January 2026, with food inflation dropping significantly to 8.9%.
“Our transition to an inflation-targeting framework is gaining traction. We have improved data analytics, strengthened communication and ended monetary financing of fiscal deficits,” Cardoso said, regarding the bank’s shift away from the unconventional policies of the past.
A Leaner, More Transparent Institution
Internally, the CBN underwent a massive structural shift. The Governor stopped the “quasi-fiscal” policies that saw the bank extending credit to unproductive sectors, which he argued was a primary driver of inflationary pressure.
The bank also underwent a significant workforce reduction, rooting out suspected corruption and relocating over 1,000 staff from the Abuja headquarters to understaffed branch offices. A central bank official noted that the Governor made governance “central to his mandate,” championing a “zero tolerance for poor corporate governance in the financial sector.”
Strengthening the Banking Frontier
The resilience of Nigeria’s banking sector has been further bolstered by a 2024 recapitalization exercise. As of early 2026, 20 banks have already met the new, higher capital thresholds ahead of the March 31 deadline.
“We are determined to break the boom-and-bust cycle that has accompanied past recapitalisation efforts,” Cardoso noted.
Beyond traditional banking, the CBN has modernized the payment landscape, with 12 million contactless cards in circulation and a revamped “Version 2” of the e-naira. These efforts contributed to Nigeria being removed from the Financial Action Task Force (FATF) “grey list” in 2025, a major milestone in the country’s fight against financial crime.
While the committee acknowledged that challenges remain—including the need to update the 2007 CBN Act and bring inflation into single digits—the consensus in London was clear. As the former CBN official concluded: “What the CBN has achieved is nothing short of remarkable.”
