From Volatility to Viability: How CBN’s Economic Reforms Are Reviving Nigeria’s Tech Potential, By Shuaib S. Agaka
Nigeria’s digital economy has shown flashes of brilliance in recent years, rising fintech innovation, a vibrant startup culture, and growing global recognition of local tech talent. But this progress has often been undermined by structural weaknesses. Currency volatility, high inflation, and erratic monetary policies have inflated costs, deterred foreign capital, and accelerated the flight of talent and innovation.
Now, a shift appears to be underway. Recent reforms by the Central Bank of Nigeria (CBN) are beginning to rebuild confidence in the country’s economic direction. For Nigeria’s tech ecosystem to thrive, this macroeconomic reset must not be seen as background support, but as the very foundation. Without stability, initiatives like broadband expansion, AI deployment, and data center investment will falter. With it, Nigeria stands a real chance of converting its digital potential into global competitiveness.
This renewed confidence is not accidental, it is the direct result of efforts to achieve macroeconomic stability, a long-missing foundation for Nigeria’s tech ecosystem.
Macroeconomic stability refers to a condition in which a country experiences stable inflation, a predictable exchange rate, sound fiscal management, and consistent economic policies. It creates a financial environment where businesses and investors can make long-term decisions without fear of sudden shocks or policy reversals.
In a stable macroeconomic environment, tech startups and tech companies face fewer financial uncertainties. Predictable inflation and currency rates help businesses set pricing strategies, forecast revenues, and manage payroll without constantly adjusting to market volatility. It also improves access to funding, especially from international sources, as investors typically avoid markets with unstable currencies or erratic monetary policies. Long-term capital investments such as data centers, cloud infrastructure, and fiber-optic networks also depend on this kind of predictability. These projects require millions of dollars and years of planning, which won’t happen if foreign investors fear sudden currency restrictions, profit repatriation limits, or unexpected tax changes.
Unfortunately, despite its vibrant innovation scene, Nigeria’s digital economy has struggled to grow consistently due to years of macroeconomic instability. Currency volatility, inflation, and inconsistent policy directions have made it difficult for local startups to attract foreign funding or plan long-term. Tech entrepreneurs raising capital in U.S. dollars often had no way of guaranteeing returns, leading many investors to turn elsewhere. Some startups even relocated to more stable countries like South Africa, Kenya, or Ghana to gain access to capital and reliable markets. At the same time, multinational tech firms delayed or redirected infrastructure investments, like data centers and cloud services, away from Nigeria, despite its large population and market potential, due to unpredictable economic conditions.
This instability has had cascading effects. It inflated the cost of importing essential tech tools like servers and software licenses, driving companies into the black market for foreign exchange, where rates are volatile and unsustainable. These elevated costs trickled down to consumers, making digital services less accessible and stalling broader adoption. Even more concerning is the impact on human capital. Nigeria’s tech talent, developers, engineers, and digital specialists have increasingly sought opportunities abroad where currencies are stable, salaries more predictable, and savings more secure. This brain drain undermines the entire ecosystem, as local startups struggle to compete without affordable, experienced talent.
The Central Bank of Nigeria’s (CBN) recent reform initiatives under Governor Olayemi Cardoso have marked a notable shift in this dynamic, positioning Nigeria for a more stable and investment-friendly future. Among the most impactful was the unification of the exchange rate, which eliminated the artificial disparity between official and parallel market rates. This step increased transparency and reduced speculation, restoring confidence among foreign investors who had previously viewed Nigeria’s forex regime as opaque and risky.
Equally critical was the CBN’s clearance of the $7 billion foreign exchange backlog. This backlog had previously disrupted operations in technology-dependent sectors such as aviation, manufacturing, and ICT, where companies rely on access to foreign currency for software subscriptions, hardware procurement, and international services. By settling these obligations, the CBN demonstrated a commitment to honoring Nigeria’s financial responsibilities and restoring credibility.
The CBN has also begun to roll back its reliance on deficit financing through the controversial “Ways and Means” advances, which previously contributed to inflation and policy distortion. By tightening this channel, and by adopting a broader monetary tightening policy to rein in inflation, which had surged above 27%, the central bank has taken visible steps toward restoring discipline. These efforts are aimed not just at immediate stabilization but at creating a sustainable economic foundation that can support long-term innovation.
These reforms are already delivering measurable results. Nigeria recorded a sharp rise in foreign portfolio investment, reaching $3.48 billion within just six months of the reforms, compared to $756 million previously. Economic activity has also shown resilience, expanding for six consecutive months, with the Purchasing Managers’ Index (PMI) reaching 52.1 in May 2025, an indicator of real growth across key sectors. These aren’t just statistics; they reflect a fundamental shift in sentiment. Investors, partners, and entrepreneurs are once again beginning to trust the economic direction of the country.
For the digital economy, this renewed confidence could be game-changing. With macroeconomic stability, Nigeria can finally attract long-term investment in broadband infrastructure, data centers, AI development hubs, and cloud services. It also becomes easier for founders to raise capital, for startups to plan expansion, and for global tech companies to see Nigeria as a serious player in Africa’s innovation landscape. Perhaps most importantly, it could begin to reverse the trend of brain drain by giving local talent a reason to stay and build.
To fully realize this opportunity, however, there must be deliberate alignment across all arms of government and digital economy stakeholders. The Central Bank of Nigeria (CBN) must work hand-in-hand with the National Information Technology Development Agency (NITDA), which is rolling out AI and digital inclusion strategies; the Nigerian Communications Commission (NCC), which oversees broadband expansion; and the Ministry of Communications, Innovation and Digital Economy, which is driving the national digital transformation agenda. Fragmentation in policy execution or misaligned timelines could stall progress and waste the momentum created by recent reforms.
In conclusion, macroeconomic stability is not a peripheral concern for Nigeria’s digital economy, it is a critical enabler. Without it, even the most ambitious tech policies and well-funded initiatives will struggle to gain traction. But with it, Nigeria has the chance to attract meaningful investment, retain its brightest talent, and position itself as a leader in Africa’s technological renaissance. The reforms led by the CBN are a promising start, but long-term transformation will depend on coordinated action, policy discipline, and an unwavering commitment to aligning the country’s economic foundations with its digital ambitions.
Shuaib S. Agaka, a tech journalist, writes from Kano State.
