The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, on Tuesday declared that volatility in the foreign exchange (FX) market has significantly declined, dropping from over 4% a year ago to less than 0.5%, as monetary and fiscal reforms begin to take hold.

Addressing the press after the 300th Monetary Policy Committee (MPC) meeting in Abuja, Cardoso said the decline in FX volatility signals improving macroeconomic stability, restored investor confidence, and a rebound in external reserves.

According to him, these changes are a direct result of “policy consistency, orthodox monetary tightening, and enhanced transparency” by the apex bank.

“If you look at the exchange rate, volatility has reduced from over 4% a year ago to less than half of 1% now. That’s an indication of stability,” Cardoso said, emphasizing that Nigeria’s currency depreciation has been relatively modest when compared to other emerging markets grappling with similar global shocks.

The CBN chief explained that liberalization of the FX market, unification of exchange rates, and reforms to boost FX supply had begun to yield results. In addition, he said that the synergy between monetary and fiscal authorities has contributed to the recent calm in the FX market, creating a more predictable environment for foreign investors and businesses.

Cardoso noted that the naira’s adjusted exchange rate had made it more competitive, with the potential to enhance Nigeria’s position in regional trade, particularly within ECOWAS. He also said local refineries, especially the Dangote Refinery, would soon help ease FX demand pressure by reducing the country’s need for imported refined fuel products.

Reserve Rebound and Remittance Push

Beyond exchange rate stability, Cardoso disclosed that Nigeria’s net external reserves have surged from just over $3 billion to around $23 billion in recent months—a development he described as a “quantum leap.”

According to the governor, the turnaround is a result of improved transparency in reserve reporting and reforms that brought back players who had previously stayed away from the FX market. The CBN has resumed the publication of both gross and net reserve figures, which Cardoso said was meant to “bolster confidence and reduce speculative behavior.”

The gross reserves, which hovered between $33–34 billion earlier in the year, are expected to rise further due to increased oil receipts, declining fuel import needs, and expanding non-oil export earnings, particularly gas.

On diaspora remittances, the CBN said it is targeting inflows of $1 billion monthly. The bank said reforms—such as digitization of remittance processes, improved KYC compliance, and closer collaboration with the Nigerian Inter-Bank Settlement System (NIBSS)—have already raised inflows from $200 million to over $600 million at peak levels.

Cardoso said banks are now expected to develop tailored products for Nigerians abroad, after the apex bank dismantled structural bottlenecks that previously constrained the flow of funds through formal channels.

Transparency or Window Dressing?

However, while Cardoso painted an optimistic picture of the FX market and the broader economy, not everyone is buying it, at least not without scrutiny. Concerns over data credibility from government institutions have continued to surface, casting doubt over the authenticity of the central bank’s claims.

Notably, respected economist and member of President Bola Tinubu’s Economic Advisory Council, Bismarck Rewane, recently pointed to “discrepancies” in data released by the National Bureau of Statistics (NBS)—Nigeria’s chief data agency. Speaking on Monday about the state of Nigeria’s economy, Rewane warned that inconsistent and manipulated figures could erode public trust in economic governance.

“Are those numbers credible? If they aren’t, then what exactly are we seeing here? A distortion in methodology?,” Rewane queried. He did not accuse any particular agency of deliberate falsification but said the inconsistencies could lead to misinterpretation and flawed policy decisions.

While the CBN said it is now committed to greater transparency—publishing audited financial statements and reserve data regularly—there is growing skepticism in economic and civic circles that such efforts may be more cosmetic than institutional. Over the past year, multiple analysts and economists have expressed worry that a trend of data “massaging” may be evolving across federal agencies, especially as the government faces rising criticism over economic hardship.

“Let the Central Bank comply with sections 50 (1)(3) of the CBN Act and publish its annual financial statement, let us see if the net external reserves is actually $23.1bn. There are places where you don’t bring that slimy political propaganda to, and reserve management as one of the 5 pillars that forms the basis of Central Banking is an integral part, because it has a direct consequence on managing monetary policy,” economist, Kelvin Emmanuel, said last month in response to CBN’s claim that Nigeria’s FX reserves rose to $23 billion.

These suspicions are backed by the precedent set by the past administration. In the past, agencies such as the NBS, the Debt Management Office (DMO), and the Ministry of Finance have faced public backlash over statistics that either contradicted market realities or appeared misaligned with earlier releases.

Analysts say the credibility gap poses a major threat to Nigeria’s economic recovery, particularly in the FX market, where investor decisions hinge on reliable information.

“Net FX reserves came in line with expectations, but CBN’s commitment to improve quality of reserves shouldn’t be understated. While CBN didn’t publish detailed data of its short- and medium-term foreign liabilities, providing some insight into its net reserves is a significant step in the right direction,” JP Morgan said in 2023.

Institutional Reform Still Fragile

Cardoso admitted that the central bank is still undergoing a process of institutional reform, stressing that it should not be judged by the same yardsticks as commercial banks. He noted that the CBN moved from a loss of over N1 trillion in 2023 to a near breakeven position of N30 billion this year, a transition he said underscored the scale of internal restructuring.

He explained that the central bank is not a profit-making organization, making it primarily a custodian of monetary stability, whose performance should be measured against that mandate.

The CBN insists that it remains committed to its reform path. Cardoso reiterated that the apex bank will continue to tighten monetary policy, sustain FX reforms, and strengthen cooperation with fiscal authorities to anchor long-term macroeconomic stability.

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Bismarck Rewane, economist and managing director of Financial Derivatives Company, has faulted the April 2025 inflation report released by the National Bureau of Statistics (NBS), questioning its credibility and comparing the data inconsistencies to the recently exposed JAMB exam scandal.

According to the NBS, Nigeria’s headline inflation dropped marginally to 23.71 percent in April, from 24.23 percent in March. But Rewane, who appeared puzzled by the figures, argued that the data present a contradiction: states that grow the bulk of the country’s food are seeing extreme inflation, while consumer-heavy states are recording unusually low inflation levels.

“Inflation was highest in Benue at 51 percent, Ekiti at 34 percent, and Kebbi at 33 percent — these are food-producing states,” Rewane said. “Meanwhile, Ebonyi, Adamawa, and Ogun — states that are primarily consuming these food items — posted some of the lowest inflation rates: 7.19, 9.52, and 9.91 percent respectively. How is that even possible?”

Drawing a direct analogy to the Joint Admissions and Matriculation Board (JAMB) exam scandal, where results were recently discredited due to technical errors and suspected manipulation, Rewane raised doubts about the data collection process used by the NBS.

“Are those numbers credible? If they aren’t, then what exactly are we seeing here? A distortion in methodology? A JAMB-type situation?” he asked. “The inflation gap between Benue and Ogun is nearly 43 percentage points — what has happened?”

‘Government Isn’t Stabilizing Prices — It’s Distorting the Market’

Rewane didn’t stop at the data. He moved to broader concerns about how inflation is being interpreted and managed. He warned that the recent drop in food prices, such as the temporary decline in rice, may not be sustainable. Factors like rumors of poisoned rice and increased imports have led to short-term price volatility, not long-term stability, he said.

“Yes, we’ve seen some food prices come down,” he admitted. “But is it real or sustainable? The rice price fell partly due to imports and partly due to people avoiding rice because of rumors it’s poisoned. That’s not policy success — it’s fear and external supply.”

He highlighted tomatoes as a more telling case, noting a 107 percent price increase due to the spread of “tomato ebola”, a plant disease. Meanwhile, dairy prices held relatively stable — a signal of the uneven and unpredictable shifts in the food basket.

For Rewane, the policy response from the government has been both weak and misdirected.

“It’s not the government’s job to produce or sell food,” he said. “That’s the wrong model. The market determines the efficient price. A trader imports rice, offers it for sale, and the consumer makes the decision based on his income.”

He argued that interventions aimed at lowering food prices miss the point — Nigeria’s inflation is driven more by structural issues than monetary phenomena.

“You can’t reduce inflation by just pumping food into the market or manipulating prices,” he said. “There’s an output gap driven by insecurity, poor logistics, high diesel and petrol costs. Then on the other side, you have excess liquidity that fuels demand. That’s the inflation mix.”

Monetary Policy Not Enough to Fix Structural Deficiencies

While acknowledging the Central Bank of Nigeria (CBN)’s role in controlling inflation through interest rate hikes and liquidity tightening, Rewane stressed that monetary policy is not enough.

“The CBN can curb demand, yes, but output and production growth comes only from power stability, efficient logistics, lower business costs, and improved farm yields,” he said.

He added that production shortfalls in the face of unrelenting demand will always fuel inflation, regardless of how high the CBN pushes the Monetary Policy Rate (MPR).

Rewane’s comments come at a time of deep public skepticism over official data, with more Nigerians expressing doubts about economic reports that fail to align with market realities. The NBS figures showed a national inflation decline, but many Nigerians say they have seen no relief in food markets, where the cost of goods remains high.

With the NBS maintaining its position on the CPI numbers, Rewane has become the latest voice to question the authenticity of the agency’s figures. The concern has been whether government data truly reflects Nigeria’s economic conditions — or whether the country is navigating policies and metrics built on compromised foundations.

With public trust in institutions like JAMB already shaken, and prices of essentials like rice, tomatoes, and other staples still show a stark difference from the NBS data, the challenge facing the government is no longer just inflation — it’s credibility.