Nigeria’s high interest rates may not remain for much longer, according to Central Bank of Nigeria (CBN) Governor Olayemi Cardoso, who has expressed confidence that ongoing economic reforms will gradually bring borrowing costs down. Speaking at the seventh Africa Emerging Markets Forum in Abuja during a fireside chat with World Trade Organization Director-General Ngozi Okonjo-Iweala, Cardoso assured businesses that the current tight monetary conditions are temporary and necessary to restore long-term economic stability.
Addressing concerns about the difficulty small and medium-sized enterprises (SMEs) face in accessing affordable loans, Cardoso admitted that borrowing remains expensive. However, he explained that the high interest rate environment is the result of efforts to correct years of inconsistent economic policies. According to him, exchange rates have already stabilized, and interest rates are expected to follow the same path as reforms continue to deliver positive results.
The CBN governor also revealed that the recently concluded banking recapitalisation exercise has positioned commercial banks to increase lending to businesses. With stronger capital bases and fewer opportunities for quick profits through market distortions, banks are expected to redirect more attention toward financing SMEs. Cardoso noted that the apex bank is encouraging financial institutions to improve their risk assessment models so they can confidently support entrepreneurs and growing businesses across Nigeria.
Beyond recapitalisation, Cardoso said the central bank is implementing additional measures to expand access to credit for smaller businesses while strengthening development finance institutions. He defended the CBN’s decision to reduce intervention lending, arguing that such responsibilities are primarily fiscal in nature and should not rest heavily on the central bank. According to him, returning to orthodox monetary policy has helped restore confidence in Nigeria’s financial system and created a stronger foundation for sustainable economic growth.
Looking ahead, Cardoso disclosed that the CBN is preparing to publish a comprehensive document outlining the economic reforms introduced under the current administration. He described the reforms as a fundamental shift in Nigeria’s economic management and said the publication would serve as a reference point to prevent future policy mistakes. As the reforms continue to deepen, the CBN governor remains optimistic that interest rates will moderate, credit will become more accessible, and businesses—especially SMEs—will benefit from a more stable and predictable financial environment.
source: The cable
