Clearing FX Backlog Boosted Nigeria’s Foreign Reserves — CBN Governor Cardoso 

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says the decision to clear the country’s long-standing foreign exchange (FX) backlog played a major role in the recent increase in foreign reserves.

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

In March, the CBN announced that it had fully settled all outstanding FX obligations. Reflecting on the move, Cardoso said honouring those commitments was central to restoring trust in Nigeria’s financial system.

“When I assumed office, I promised that we would clear the verifiable backlog of monies owed by Nigeria to third parties — estimated then at over $7 billion,” he said.

“To be honest, I had no clear plan for how we were going to do it, but I knew it was non-negotiable. We needed to protect and maintain our integrity.”

The CBN governor disclosed that the apex bank conducted a forensic audit to verify the obligations before proceeding with payments — a move he described as “a significant sacrifice,” given competing financial priorities.

“Some people argued we shouldn’t pay because those debts were not incurred under us. But I insisted — if we expect investors to continue trusting and investing in our economy, we must keep our promises,” Cardoso said.

He emphasised that credibility is a cornerstone of economic stability.

“When an economy lacks credibility, it loses public trust and discourages investment,” he noted. “People invest where they know their funds are safe and where commitments are honoured.”

Cardoso added that the clearance of the backlog — though often overlooked — contributed significantly to the rise in foreign reserves.

Nigeria’s FX reserves increased by $1.03 billion in the month leading up to September 23.

According to Cardoso, sustaining investor confidence will remain a core priority for the CBN.