In his first year as Central Bank of Nigeria (CBN) governor, Olayemi Cardoso implemented significant monetary reforms aimed at stabilizing the naira and addressing inflation. His tenure began with ambitious goals, including price stability, economic growth, and exchange rate unification. Under his leadership, the CBN introduced critical changes like the Bloomberg Electronic Foreign Exchange Matching System (EFEMS), boosting transparency and restoring investor confidence. As a result, Nigeria’s foreign reserves grew from $33.28 billion in September 2023 to over $40 billion by late 2024, and the naira appreciated slightly in the parallel market after an earlier slide.
Despite these gains, inflation remains a formidable challenge. Rising from 28.20% to 33.88% in a year, inflation has been driven by excess money supply, high food prices, and soaring petrol costs. The Cardoso-led CBN has relied heavily on interest rate hikes, with the Monetary Policy Rate (MPR) reaching 27.5%. However, this approach has drawn criticism from industry stakeholders, who argue it hampers growth in sectors like agriculture and manufacturing. The Manufacturers Association of Nigeria (MAN) and other economists have called for a balanced strategy combining monetary and fiscal policies to alleviate the burden on the productive sectors.
While Cardoso’s policies have bolstered foreign exchange market confidence and increased reserves, economic disparities persist. Agriculture and manufacturing recorded minimal growth, contrasting with the financial services sector’s 32% surge. Critics emphasize the need for inclusive policies to address inflation without stifling the real economy. Cardoso, acknowledging these concerns, urged Nigerian banks to adopt proactive roles in driving growth and managing risks effectively, signaling a broader strategy to address Nigeria’s economic challenges in the years ahead.