Has the CBN sustained investor confidence in the first half of 2026?

Six months into 2026, there is enough evidence to assess not merely what the Central Bank of Nigeria has done but also what its policies have achieved. The first half was less about introducing headline reforms than consolidating the monetary and foreign-exchange reset begun in 2023. Although high borrowing costs and the need for more productive investment remain concerns, the CBN’s defining achievement has been sustaining confidence in Nigeria’s macroeconomic management. That confidence is visible in capital flows, financial-market performance, international assessments, stronger reserves and banking-sector resilience.

Perhaps the clearest evidence is the return of capital. National Bureau of Statistics data show that capital importation rose to $10.37 billion in the first quarter of 2026, up 61 percent from $6.44 billion in the preceding quarter. Portfolio investment accounted for $9.86 billion, or more than 95 percent of the total. While portfolio flows can reverse more quickly than foreign direct investment, they are often an early indication that investors are regaining confidence in a country’s policy direction.

That optimism was also reflected in the capital market. The Nigerian Exchange’s All-Share Index rose by 45.95 percent in the first half, from 156,492.36 points to 228,401.92 points by June 29. Equities market capitalisation increased by ₦46.6 trillion, from ₦99.94 trillion to ₦146.56 trillion. These gains cannot be attributed to monetary policy alone, but improved foreign-exchange liquidity, a firmer naira and greater policy predictability supported investor appetite.

The momentum continued beyond June. By early July, Bloomberg data covering 92 exchanges showed Nigerian equities delivering a 67 percent dollar-denominated return, marginally ahead of South Korea’s Kospi at 66 percent. The ranking is necessarily fluid, but it demonstrates that investors were earning strong returns even after accounting for exchange-rate movements.

International assessments reinforced this confidence. In May, S&P Global Ratings upgraded Nigeria’s sovereign rating from ‘B-’ to ‘B’ with a Stable Outlook, citing an improving macroeconomic profile and sustained reforms. The upgrade matters because sovereign ratings affect risk perception, borrowing costs and investors’ willingness to commit capital.

FTSE Russell also confirmed in April that Nigeria would be returned from unclassified to frontier market status, initially scheduled to take effect in September 2026. The decision reflected improvements in foreign-exchange accessibility, capital repatriation and market conditions. Its implementation was subsequently placed under further review in July following Nigeria’s transition to a T+1 settlement cycle, illustrating both the progress made and the importance of continuously aligning market infrastructure with international investor requirements.

Confidence is equally visible in Nigeria’s external position. Gross external reserves rose to about $51.5 billion in June, increasing by approximately $1.9 billion during the month. The improvement was supported by stronger capital inflows, better oil-related receipts and more orderly foreign-exchange market conditions. Higher reserves strengthen the country’s capacity to meet external obligations, withstand shocks and reassure businesses that foreign currency will remain available.

The banking sector provides another important pillar. The CBN concluded its recapitalisation programme with 33 banks raising ₦4.65 trillion, of which Nigerian investors supplied 72.55 percent. The exercise improves banks’ capacity to absorb shocks and finance larger transactions. Its broader value, however, will depend on whether stronger balance sheets translate into greater credit for manufacturing, infrastructure, agriculture and other productive sectors.

While these gains reflect complementary fiscal and structural reforms by the federal government, the CBN’s role in restoring monetary and financial-market credibility has been central. Nevertheless, restored confidence should not be mistaken for completed reform.

UNCTAD’s World Investment Report 2026 shows that Nigeria attracted $4.01 billion in foreign direct investment in 2025, up 148.4 percent from $1.61 billion in 2024. The rebound suggests that improving macroeconomic stability is beginning to restore longer-term investor confidence.

If the first half of 2026 was about sustaining confidence, the next phase must convert it into productive credit, investment, jobs and stronger enterprises. The foundation is firmer. The real measure of success will be whether confidence moves beyond financial markets and becomes visible throughout the real economy.

Ayobami Oyalowo is the Executive Director of Finance and Administration at Ogun-Oshun River Basin Development Authority.