The reported increased inflow of foreign capital to the country, as stated by Yemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), at the Chartered Institute of Bankers of Nigeria (CIBN) 60th annual bankers’ dinner in Lagos, can be rightly described as some form of cheery news for a beleaguered economy seeking some respite for stability. As the ordinary person has yet to feel the impact of such development on their economic circumstances, the sense of hope for a better functioning economy could be the takeaway at this point in time.
Foreign capital inflow is very significant for the health of an economy. It indicates the degree of confidence the outside world has in the country’s economy, as well as the business climate being conducive enough for both meaningful returns on investments and the safety of capital invested therein. The fallout of all these on the immediate and short term is what is of utmost interest to the ordinary Nigerian, and it is hoped that the apex monetary authority will not lose sight of this public expectation as it conducts its monetary policy functions as required.
In his presentation at the CIBN annual dinner, Cardoso indicated that foreign capital inflow to the country rose by 70 per cent above 2024 levels, with significant inflows recorded in the first 10 months of 2025, reaching a sizable level of USD $20.98 billion. This, according to Cardoso, is over 400 per cent higher than the meagre USD $3.9 billion of 2023.
These are good indicators of progress, but the country must not lose sight of the factors that led to the increase in foreign capital inflows. While financial reforms by the Tinubu administration could have added value to foreign investors due to the relative foreign exchange gains from the harmonisation of the foreign exchange markets, the real driving force is the removal of the country from the Financial Action Task Force (FATF) grey list. The FATF, which leads global action to tackle money laundering, terrorism, and proliferation financing, recently removed Nigeria from the grey list.
The country’s removal from the list was due to prior deficiencies in the country’s anti-money laundering situation, coupled with counter-terrorist financing and counter-proliferation of financing strategies that cast doubt about the country’s financial or business climate in relation to doing meaningful business with the outside world. In fact, the country’s listing on the grey list was a clear indictment of the Muhammadu Buhari administration in this regard, especially regarding the loss of confidence in the management of issues related to money laundering and suspected terrorist financing, as the country was highly suspected internationally over that period.
Cardoso acknowledged this in his address to the bankers. With Nigeria’s removal from the FATF grey list, foreign investors found the country to be a safe place to transfer funds and thus engage in meaningful investment activities, resulting in a significant inflow of foreign capital over this period. The FATF statutorily lists countries with challenges in financial flows under the “grey list” or the “blacklist”, with the grey list calling for greater monitoring of their activities, while the blacklist indicates a high-risk jurisdiction with serious strategic deficiencies to counter money laundering and terrorist financing, among others, and thus calling for action by the global community.
While these foreign capital inflows are increasing and moving in the right directions, the challenge now is to ensure that the dark days of the Buhari administration on these issues do not resurface. It is good that, under intense pressure from the President of the United States of America, Donald Trump, the Nigerian authorities are now focusing on the perennial problem of insecurity in the country and thus recently released a list of names associated with financing of terrorism. This is unlike what happened under the Buhari administration. With this, it is anticipated that the spate of suspected terrorist financing emanating from Nigeria will be greatly diminished. By doing so, the country can have some assurance that it will not be placed back on the FATF grey list.
While the CBN is highly elated at the positive developments, it should not lose sight of its core functions in relation to how the increased foreign capital inflows will be applied. As the foreign exchange market benefits from the increased supply of foreign currencies, the need to utilise these funds as a backup to boost lending to the economy, particularly to micro, small, and medium-sized enterprises (MSMEs), should not be overlooked.
From the address of the CBN Governor at the bankers’ dinner, the itemised focus of the CBN for 2026 in six strategic priorities namely, strengthening banking-sector supervision, delivering durable price stability, modernising payments, fostering responsible fintech innovation, building institutional capacity, and deepening collaboration with domestic and international partners should be pursued rigorously, such that there are no conflicts in their outcomes and that they are mutually supporting in the attainment of desired macroeconomic objectives especially in the area of price stability and reasonable economic growth.
Nigerians are eager to see a better economic environment where the living standards and purchasing power of the average Nigerian are comparable to those in other countries where youths are currently rushing to, in search of better economic opportunities.
