CBN Governor Cardoso Charts Path for Economic Growth, Reform
Lagos - The Governor of the Central Bank of Nigeria, Mr. Olayemi Cardoso, has reiterated the critical role of reforms in stabilising the Nigerian economy amidst global and domestic challenges.
In a keynote address delivered in Lagos on Friday, November 2024, at the 59th Annual Bankers Dinner of the Chartered Institute of Bankers of Nigeria (CIBN), he outlined the CBN’s strides over the past year in steering Nigeria’s economy through significant reforms aimed at stabilising prices, improving the foreign exchange market, and fostering sustainable growth.
Acknowledging the economic challenges that persist despite recent progress, Mr. Cardoso emphasised the CBN’s commitment to safeguarding Nigerians’ livelihoods. He framed the reforms as crucial for rebuilding trust, stabilising the exchange rate, curbing inflation, and enhancing the banking sector’s capacity to support economic growth.
The Governor provided a global context for Nigeria’s challenges, noting that the economic turbulence of recent years—exacerbated by the COVID-19 pandemic, the Russia-Ukraine war, and monetary tightening in advanced economies—had placed additional pressures on emerging markets. While global inflation trends were improving, he highlighted the persistent constraints on growth, including geopolitical tensions and trade fragmentation, underscoring the need for continued domestic resilience.
Focusing on Nigeria’s economic landscape, Mr. Cardoso reviewed the Central Bank’s aggressive actions to counter high inflation and fiscal imbalances. He cited the cessation of deficit financing through the CBN’s Ways and Means advances, which had reached an unsustainable level of ₦22.7 trillion as of 2023. This shift, he explained, marked a return to fiscal discipline and reinforced the Bank’s core mandate of price stability.
He also described the upward adjustments to the Monetary Policy Rate, which rose by 875 basis points to 27.5% in 2024, as a necessary measure to combat inflation despite the immediate pressures it placed on households and businesses. He noted that inflationary pressures were beginning to ease, with signs of a downward trajectory anticipated in 2025.
Governor Cardoso underscored the significant reforms undertaken by the Bank in the foreign exchange market, which addressed critical challenges, including the elimination of multiple exchange rates and the clearance of a $7 billion backlog in foreign exchange obligations. He further explained that critical initiatives, such as the unification of the exchange rate system and the implementation of an electronic FX matching platform, had been pivotal in restoring transparency and attracting foreign investments. He noted that these efforts had already begun to yield tangible results, with heightened investor confidence, a surge in foreign portfolio inflows, and external reserves climbing to over $40 billion—the highest level recorded in nearly three years.
He further revealed that the proposed implementation of the Nigeria FX Code, an ethical framework designed to enhance governance and compliance in the foreign exchange market, was to take effect on December 1, 2024, underscoring the CBN's commitment to maintaining strict enforcement and upholding transparency in market operations.
Mr. Cardoso also disclosed that the CBN had targeted $1 billion in monthly remittance flows, supported by initiatives such as non-resident BVN registration and diaspora-focused financial products, to boost the external sector further and enhance the country’s global competitiveness. Governor Cardoso emphasised the need for banks to strengthen their intermediation and market-making roles to help businesses effectively manage risks.
Governor Cardoso highlighted Nigeria's progress in the payments ecosystem, regulatory compliance, and economic resilience while addressing challenges such as inflation, exchange rate stability, and financial access for underserved populations. He noted that the CBN's strategy has positioned Nigeria as a leader in digital payments innovation, surpassing many advanced economies and establishing the country as a fintech hub in Africa, with several homegrown unicorns driving financial inclusion. However, he expressed concerns over platform security and payment delays, reaffirming the CBN's commitment to stricter oversight and penalties to safeguard consumer trust.
Reaffirming the CBN's commitment to collaborating with fiscal authorities, the Governor highlighted the Bank's dedication to revitalizing agriculture and manufacturing sectors. He further emphasized the prioritization of financial inclusion through targeted initiatives, including the development of a gender-focused dashboard to monitor and track progress effectively. He revealed that the Bank plans to invest in comprehensive mentorship and capacity-building programs to equip young minds with the skills and opportunities to drive innovation and strengthen institutions.
He called for collective efforts from all stakeholders to build a transparent, inclusive, and resilient economy that addresses current challenges while securing opportunities for future generations.
Delivering his goodwill message, the Governor of the Central Bank of Sierra Leone, Dr. Ibrahim Stevens, commended Nigeria’s leadership in the West African banking industry and its role in fostering inclusive financial development, supported by its large population and strong economic influence. He highlighted Nigeria's advancements in ethical banking, financial intermediation, digital solutions, and post-consolidation resilience, strengthening regional capitalisation and liquidity.
Dr. Stevens lauded the collaborative efforts between the central banks of Nigeria and Sierra Leone in areas such as anti-money laundering, financial inclusion, and fintech innovation, noting Sierra Leone's adoption of a digital sandbox model to integrate fintech into its economic system. He emphasised the need for continued collaboration to enhance innovation, resilience, and progress in the region's financial sector.
In his special remarks, the Governor of Lagos State, Mr. Babajide Sanwo-Olu, emphasised the importance of earning public trust and professional credibility while acknowledging the significant challenges faced by Nigerians amidst ongoing reforms. He commended the banking sector for its resilience and capacity to meet increasing regulatory and financial demands, such as raising capital and supporting MSMEs.
He commended Lagos' fintech and digital innovations for their global competitiveness and contribution to financial inclusion and economic growth while stressing the need for diversification, infrastructural investment, and youth empowerment through training and retraining. Reassuring stakeholders of Lagos' commitment to a safe, business-friendly environment, he expressed gratitude for his recent fellowship recognition. He reaffirmed his dedication to integrity, professionalism, and service excellence, aligning with Lagos' and Nigeria's broader economic aspirations.
Earlier in his welcome address, the President of the Chartered Institute of Bankers Nigeria (CIBN), Prof. Pius Olanrewaju, underscored the industry's resilience and adaptability in navigating economic complexities, from inflation management to regulatory challenges.
He noted that the institute's annual banking dinner was a platform to celebrate the banking sector's vital role in driving Nigeria's economic growth while fostering a sense of community and shared purpose among its stakeholders. He expressed confidence that the insights from the keynote address would guide discussions on the ongoing recapitalisation of the banking sector and broader economic challenges.
A highlight of the evening was the conferment of the prestigious Honorary Fellowship of the Institute on the Lagos State Governor, Mr Babajide Sanwo-Olu, and the CBN Governor, Mr Olayemi Cardoso.