Central bank digitisation is helping Nigeria navigate market instability

When economies become unstable, responsibility increasingly falls to central banks. Recent global events have put this role to the test. In an era of persistent volatility — from commodity shocks to geopolitical disruption — these institutions are expected not only to contain crises but also to anchor confidence and keep markets functioning.

But navigating modern market dynamics demands modern infrastructure. Many central banks still operate on systems designed for a different era, limiting efficiency, transparency and the transmission of policy. Digitisation is, therefore, no longer a technical upgrade but a strategic necessity.

This transformation is fast becoming one of the most important and underappreciated foundations of financial stability, particularly in emerging markets where liquidity, price discovery and investor confidence are often fragile. Nigeria offers a clear example of how this shift is beginning to take hold.

Over the past year, the country has faced significant headwinds: oil price volatility, high inflation, trade disruption and rising insecurity — a particularly damaging combination for an economy already navigating structural reform.

And yet, three months into 2026, a year already marked by extreme market turbulence, Nigeria’s trajectory appears broadly positive. The naira has maintained relative stability, especially when compared to other emerging-market currencies; external reserves have climbed over $50bn — a 13-year high – and investment flows were up by nearly 200 per cent between 2023 and 2025. Managing these pressures, while pursuing reform, has required sustained policy efforts by the Central Bank of Nigeria (CBN).

The bank’s emphasis on macroeconomic stability has helped to restore a measure of investor confidence, re-establishing the foundations for Sub-Saharan Africa’s largest economy to pursue a more durable growth agenda.

Affirming this commitment, CBN Governor Olayemi Cardoso has clearly articulated the priorities that need to underpin the Bank’s agenda. This includes expanding digital payments, supporting responsible financial innovation, maintaining price stability and strengthening the Bank’s institutional credibility through greater discipline and transparency.

Digital transformation is a central pillar of the bank’s agenda. Like much of the global financial system, central banks are under growing pressure to modernise their operational infrastructure. Digitisation is at the heart of this shift. It can improve the transmission of monetary policy, reduce operational risk, enhance transparency in market activity and strengthen the resilience of payment and settlement systems.

These gains are particularly relevant for emerging markets seeking to deepen domestic capital markets and improve their integration into global financial networks. Similar reform momentum is visible across markets such as Sri Lanka, Angola, Kenya, Azerbaijan and the Philippines, where BMatch has also been adopted, with each working to improve market transparency, liquidity and access to international capital.

Nigeria’s market structure has increasingly been shaped by similar priorities. Since 2023, we have been working closely with the CBN to integrate our BMatch solution into their financial systems.

BMatch is a digital matching platform for FX trading designed to improve price discovery, transparency and execution efficiency in local currency markets. Its introduction in Nigeria has supported the development of a more formalised and transparent FX trading environment, helping to increase market depth, reduce informational frictions and improve confidence among market participants. In simple terms, it makes things easier.

And we are seeing the benefits of the tool across the African markets in which it has been deployed. Across Africa, FXGO, our multi-bank trading solution, is currently used in 21 countries with over 700 users on the continent trading in excess of USD 1 trillion.

More broadly, our experience with governments not only in Africa but worldwide suggests that digital reform can act as a force multiplier for monetary authorities. From Sri Lanka to Ukraine, we are seeing that more efficient central bank operations can reinforce financial stability, support liquidity formation and, over time, help lower the risk premium demanded by international investors.

Consider the following: Nigeria recorded a sharp increase in foreign direct investment in the third quarter of 2025, with inflows reported to be up by 700% compared to the previous quarter.

It’s important to note that this improvement should not be attributed to digital reform alone. Macroeconomic adjustment, exchange-rate management and regulatory credibility all play central roles. However, modern financial infrastructure is increasingly part of the institutional foundations that shape how international investors assess risk, transparency and long-term opportunity in emerging economies.

What Nigeria’s experience suggests — and what is increasingly evident elsewhere in Africa — is that modernisation will depend not only on policy choices but also on effective partnerships between central banks and providers of the technologies that allow market infrastructures to meet and surpass international standards.

Ray Penny, West Africa Territory Manager, Bloomberg LP