In its renewed drive to strengthen Nigeria’s macroeconomic fundamentals, the Central Bank of Nigeria (CBN) is adopting a comprehensive approach aimed at improving the global competitiveness of Nigerian products while simultaneously ramping up diaspora remittance inflows. These dual strategies are part of broader efforts to stabilize the naira, boost foreign exchange liquidity, and foster long-term economic growth.
While the apex bank continues to battle inflation and exchange rate volatility, it is doubling down on initiatives that target the roots of economic vulnerability—low export capacity and inadequate foreign currency supply. The CBN is focused on enhancing the standards of locally produced goods to meet global market requirements and encourage greater export earnings, which in turn could improve Nigeria’s foreign reserves and stabilize the local currency.
Enhancing Product Quality for Global Markets
A key pillar of the CBN’s strategy is raising the quality of Nigerian products through collaboration between banks, policymakers, and the private sector. The apex bank, in partnership with the Bankers’ Committee, is advocating capacity-building for manufacturers, investment in technology, and improved branding and packaging for locally made goods.
Dr. Aisha Olatinwo, Director of the CBN’s Consumer Protection and Financial Department, emphasized during the recent Bankers’ Committee meeting in Lagos that for Nigeria to compete internationally, its goods must be attractive and meet the requisite quality standards. Represented by Deputy Director Nelson Amuwa, she noted that the bank is addressing constraints in packaging, branding, and export readiness—factors that have historically limited Nigeria’s manufacturing sector.
Industry stakeholders echoed similar sentiments. Dr. Bamidele Ayemibo urged Nigerian producers to align with global best practices in product branding and consistency. “Our ability to compete in manufacturing, fashion, or tech depends on the quality and perception of our products,” he said. Packaging, he stressed, is not merely functional but a storytelling tool that can inspire trust and drive demand in international markets.
Ayodele Subair, Executive Chairman of the Lagos State Internal Revenue Service, added that a stronger financial sector and deeper stakeholder collaboration are key to unlocking the full potential of Nigerian exports.
Tackling Structural Challenges in Manufacturing
Despite the optimism, Nigerian manufacturers continue to face major headwinds. President of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, lamented the hostile business environment. He cited N1.3 trillion in financing costs in 2024 alone, driven by interest rates hovering between 35–37%, which he described as “a disincentive to production.”
Meshioye called on the CBN and the Bankers’ Committee to offer long-term, low-interest funding to support manufacturing and backward integration. “Cheaper production financing is critical,” he said, warning that without such intervention, the potential benefits of export-driven growth could remain unrealized.
Unlocking Diaspora Remittances
While working to strengthen exports, the CBN is also eyeing the diaspora as a steady source of foreign exchange. With annual remittance inflows estimated at $23 billion, the apex bank is ramping up efforts to formalize and grow this channel through revised policies and innovative financial products.
One of the highlights of this push is the introduction of two new diaspora-focused accounts—the Non-Resident Nigerian Ordinary Account and the Non-Resident Nigerian Investment Account. These products are designed to encourage investments from Nigerians abroad and simplify remittance processes, thereby increasing forex inflows and broadening financial inclusion.
CBN's recent revisions to the International Money Transfer Operators (IMTOs) guidelines are also a critical component of this strategy. The updated framework allows IMTOs to partner with Authorised Dealer Banks for remittance payouts and grants access to naira liquidity through the CBN. This aims to facilitate faster and more transparent disbursements of remittances to beneficiaries in Nigeria.
A key provision of the guidelines mandates that IMTOs may not purchase foreign exchange from the domestic market, which ensures that the forex received is not recycled into speculative trading. Instead, the funds are injected into the real economy through direct disbursement to recipients in naira or credit transfers to their bank accounts.
Building Confidence, Attracting Investment
These reforms are already yielding early signs of progress. According to Charlie Bird, Director of Trading at Verto, “Nigeria is becoming more attractive to foreign investors, particularly because of improved dollar liquidity in the market,” a development he credited to the CBN’s reforms under Governor Olayemi Cardoso.
Bird noted that foreign companies and airlines are now able to repatriate funds more easily—something that was a significant hurdle just months ago. The return of confidence in Nigeria’s FX market is pivotal to sustaining remittance flows and boosting investor sentiment.
Dr. Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria, also highlighted the critical role remittances play in supporting the Nigerian economy, especially as a supplement to foreign direct and portfolio investments.
In a broader African context, Mohamed Touhami el Ouazzani, Regional Vice President of Africa at Western Union, reinforced the transformative impact of diaspora remittances, noting that $90 billion flowed into Africa in 2023 from its diaspora—an amount comparable to the GDP of entire nations.
He explained that beyond meeting household needs, remittances fund infrastructure development, foster entrepreneurship, and deepen financial inclusion. For Nigeria, effectively harnessing this channel could be a game-changer.
Outlook: A Multi-Pronged Approach to Economic Resilience
The CBN’s strategy to drive export growth and remittance inflows marks a proactive attempt to rebalance Nigeria’s external sector. By improving the quality and market readiness of Nigerian products while expanding avenues for foreign exchange through the diaspora, the apex bank aims to bolster the naira, ensure price stability, and promote sustainable economic development.
However, success will depend on consistent policy implementation, stakeholder collaboration, and a genuine commitment to addressing the structural challenges facing local producers. If these efforts are sustained, Nigeria may be poised for a gradual but meaningful transformation in its foreign exchange dynamics and broader economic trajectory.