Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), delivered a comprehensive assessment of the country’s economic performance and the bank’s policy interventions at the 2025 Monetary Policy Forum. He emphasized the CBN’s proactive role in mitigating inflationary pressures, projecting that without their interventions, inflation could have spiraled to a staggering 42.81% by the end of 2024. This stark contrast underscores the effectiveness of the CBN’s strategic measures in curbing inflation and maintaining relative economic stability. Cardoso highlighted a series of decisive policy actions undertaken throughout 2024, including a substantial increase in the Monetary Policy Rate (MPR) by 875 basis points to 27.50%, a significant hike in the Cash Reserve Ratio (CRR) for Other Depository Corporations by 1,750 basis points to 50.00%, and adjustments to the asymmetric corridor around the MPR. These measures, he argued, were instrumental in preventing a runaway inflation scenario.
Furthermore, Cardoso underscored the CBN’s commitment to orthodox monetary policies as a cornerstone of their strategy to tame inflation in 2025 and beyond. This commitment signals a shift towards more conventional and transparent monetary policy practices, aimed at building credibility and fostering investor confidence. He stressed the importance of strong policy coordination between fiscal and monetary authorities to effectively manage disinflation in the face of persistent economic shocks, emphasizing the continued focus on price stability as a primary objective. The planned transition to an inflation-targeting framework further solidifies the CBN’s commitment to maintaining price stability and restoring purchasing power, ultimately alleviating economic hardship for Nigerians.
A key aspect of the CBN’s intervention strategy was a series of critical foreign exchange (FX) reforms. Cardoso pointed to the unification of multiple exchange rate windows as a pivotal move that enhanced market efficiency and significantly boosted diaspora remittances. This unification led to a remarkable 79.4% increase in remittances via International Money Transfer Operators (IMTOs) in the first three quarters of 2024, reaching $4.18 billion compared to $2.33 billion in the same period of 2023. This surge in remittances highlights the positive impact of the FX reforms in facilitating inflows and bolstering the economy. The CBN also took decisive action to clear a substantial $7 billion FX backlog, a move that restored market confidence and improved FX liquidity.
Beyond these key interventions, the CBN implemented several other impactful measures. Restrictions on 41 items previously banned from accessing the official FX market since 2015 were lifted, further liberalizing the FX market and promoting trade. New minimum capital requirements for banks, set to take effect in March 2026, were introduced to enhance the resilience and global competitiveness of the Nigerian banking sector. These measures demonstrate the CBN’s commitment to fostering a more open, efficient, and robust financial system. The introduction of the Nigeria Foreign Exchange Code further underscores this commitment, aiming to ensure integrity, transparency, and efficiency in the FX market. This code serves as a binding commitment by the financial sector to rebuild trust and boost confidence in the Nigerian economy.
The CBN also focused on promoting financial inclusion, particularly for women. The launch of the WIFI (Women’s Financial Inclusion) initiative under the National Financial Inclusion Strategy aims to bridge the gender gap in financial access by empowering women with financial services, education, and digital tools. This initiative reflects the CBN’s recognition of the importance of inclusive economic development and the role of women in driving economic growth. Cardoso emphasized that achieving macroeconomic stability requires sustained vigilance and a proactive monetary policy stance. He expressed optimism about Nigeria’s economic trajectory, believing that disinflation is within reach, but stressed the critical need for bold and coordinated policy measures to consolidate the progress made.
Looking ahead, Cardoso acknowledged the potential for improved global capital flows to emerging markets as advanced economies ease their monetary policies. However, he cautioned that Nigeria’s ability to attract these inflows hinges on investor confidence in domestic reforms, macroeconomic stability, and positive real returns on investment. He reiterated the CBN’s commitment to transitioning from unorthodox to orthodox monetary policies, emphasizing that this shift is crucial for restoring confidence, strengthening policy credibility, and prioritizing price stability. This transition, he argued, will create a more predictable and stable environment for production, exports, and essential imports, contributing to sustainable economic growth.
Cardoso’s presentation at the forum provided a comprehensive overview of the CBN’s strategic interventions and their impact on the Nigerian economy. He highlighted the bank’s proactive approach to managing inflation, implementing crucial FX reforms, and promoting financial inclusion. His emphasis on orthodox monetary policies signals a commitment to transparency and building credibility, while the focus on price stability underscores the CBN’s dedication to creating a stable and enabling environment for economic growth. The various initiatives and reforms undertaken by the CBN demonstrate a concerted effort to address key economic challenges and lay the foundation for sustainable and inclusive economic development in Nigeria. Cardoso’s optimistic outlook, coupled with the CBN’s proactive stance, suggests a positive trajectory for the Nigerian economy, albeit with the acknowledgement that continued vigilance and coordinated policy efforts are essential for sustained progress. The transition to an inflation-targeting framework, combined with the ongoing FX reforms and financial inclusion initiatives, positions Nigeria for improved economic performance and increased investor confidence in the years to come.
