It is a privilege to address you today at this landmark occasion, the launch of the Nigeria Foreign Exchange Code (FX Code). Your presence here reflects our collective vision for a foreign exchange market built on integrity, fairness, transparency and efficiency, critical pillars for Nigeria’s economic growth and stability.
Before sharing my thoughts, I want to acknowledge the insightful discussions we have had here today. As Nelson Mandela reminded us, as leaders there is great value in listening to everyone first – to understand perspectives, concerns, and
recommendations – before speaking. The ideas shared in this room reaffirm our collective commitment to shaping a more resilient and transparent FX market.
The FX Code represents a decisive step forward, setting clear and enforceable
standards for ethical conduct, transparency, and good governance in our foreign exchange market. It is a firm signal that business-as-usual will no longer suffice. It is also a blueprint for the future, grounded in the hard lessons of the past.
We must not forget where we are coming from. The era of multiple exchange rates,
which created privileges for a select few at the expense of most Nigerians, severely
undermined market integrity. As an example, the $7bn of FX backlogs that has taken over 12 months to verify has led to the discovery of multiple unethical and even illegal practices that we should not be proud of as a nation. The forensic verification process is now near complete, and final settlements will be processed accordingly.
Similarly, the period of unprecedented ways-and-means-financing inflicted significant damage on our economy, contributing to inflation, currency depreciation, and eroded public confidence.
These practices must never return. The FX Code is a firm rejection of such distortions
and an equally firm commitment to a future defined by fairness, trust and market driven principles.
Let us be clear: the system itself played a key role in the challenges of the past.
Unethical behaviours and systemic abuses – whether by those with privileged access
or by complicit participants – eroded public trust and harmed our economy. We will not tolerate any attempts to revert to those practices. Any individual or institution that violates the FX Code will face swift and decisive sanctions.
Our journey towards market reform is already yielding results. The year 2024 was
marked by structural reforms which sought to return the naira to a freely determined
market price and ease volatility as several distortions were removed from the market.
Reforms including discontinuation of quasi-fiscal interventions, unifying the exchange rate windows, clearing a backlog of foreign exchange commitments, and recalibrating monetary policy tools were all necessary to redirect the course of our economy, restore order and credibility to our FX market, and refocus the CBN on its core mandates.
Notably, the introduction of the Electronic Foreign Exchange Matching System (EFEMS) in December 2024 has improved market transparency and efficiency. Since its launch, the naira has appreciated significantly—from ₦1,663.90 on December 2, 2024, to ₦1,536.72 as of yesterday.
Exchange rate stability is a cornerstone of macroeconomic health for an economy like Nigeria’s. Beyond daily market rates, the exchange rate influences critical indicators such as the balance of payments, external reserves, international trade, inflation, economic growth, and foreign investment. These factors collectively shape the economic welfare of our nation and people. Inflation in particular remains a critical challenge as rising prices erode purchasing power and increase the cost of living—but by fostering exchange rate stability, we are tackling this issue head-on.
Furthermore, our external reserves have grown by 12.74%, reaching US$40.68 billion at the end of 2024. This achievement reflects the effectiveness of reforms aimed at paying off legacy FX obligations and growing reserves organically.
All these indicators of progress are the direct result of our commitment to reform and the collective efforts of all stakeholders.
The FX Code marks a new era of compliance and accountability. It is not just a set of recommendations; this is an enforceable framework. Under CBN Act 2007 and BOFIA Act 2020, violations will be met with penalties and administrative actions. Market participants must recognize that adherence to these principles is not merely about compliance but about restoring public trust in our financial system.
Beyond the foreign exchange markets, the FX Code forms part of our renewed focus
on compliance across the financial services industry and I am particularly pleased that we have the leadership of the industry in this room to reinforce a collective commitment to the journey ahead. Self-regulation and conduct are at the core of the changes in culture we expect to see at play in the industry, and I expect the principles of the FX Code to be applied across other business areas.
The FX Code is built on six core principles—Ethics, Governance, Execution, Information Sharing, Risk Management and Compliance, and Confirmation and Settlement Processes. These principles align with international standards while addressing Nigeria’s unique challenges. Together, they provide the foundation for a resilient and transparent market that inspires confidence among both domestic and international participants.
Today, as we formally launch the FX Code, I call on all market participants to embrace
its principles wholeheartedly. The six guiding principles and 52 sub-principles must become the standard for conduct across all participating institutions. Leaders in this room – Board Chairs, Managing Directors, and Chief Compliance Officers – must lead from the front. Embedding these standards within your organizations is not optional.
Let me reiterate: the era of opaque practices is over. We will not hesitate to act against any institution or individual that undermines the integrity of our financial markets. The FX Code is a binding commitment to accountability and transparency—and we must all play our part.
I extend my appreciation to the Financial Markets Dealers Association (FMDA) for your efforts in training members on the FX Code and EFEMS. Your dedication to capacity building is critical to the success of these initiatives. To the Global Foreign Exchange Committee (GFXC) and all stakeholders, thank you for your invaluable support in bringing this milestone to fruition.
Distinguished guests, as we now proceed to sign the FX Code, let this moment serve
as a collective pledge to transparency, ethical conduct, and fairness in our market. Together, we can build a financial ecosystem that embodies resilience, global competitiveness, and economic prosperity.
Thank you.
- A keynote address delivered at the launch of the Nigeria Foreign Exchange (FX) Code by Mr. Olayemi Cardoso Governor, Central Bank of Nigeria (CBN) at the Central Bank of Nigeria, Head Quarters, Abuja January 28, 2025
Olayemi M. Cardoso
Governor,
Central Bank of Nigeria
