A buja, Nigeria – The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has stated that without the bank’s policy interventions, inflation in the country could have surged to 42.81% by December 2024. He also projected that diaspora remittances would rise to N31.79 trillion when the fourth-quarter figures for 2024 are released.
Speaking at the 2025 Monetary Policy Forum, which brought together government ministers, economic agency heads, and private sector stakeholders, Cardoso reaffirmed the CBN’s commitment to orthodox monetary policies aimed at curbing inflation in 2025.
Policy Measures and Impact
The CBN governor emphasized that decisive policy interventions were instrumental in preventing inflation from reaching dangerous levels. “Counterfactual estimates suggest that without these measures, inflation could have hit 42.81% by December 2024,” Cardoso stated.
He highlighted that throughout 2024, the CBN implemented bold policy actions across six Monetary Policy Committee (MPC) meetings. These included raising the Monetary Policy Rate (MPR) by 875 basis points to 27.50%, increasing the Cash Reserve Ratio (CRR) for Other Depository Corporations by 1,750 basis points to 50.00%, and adjusting the asymmetric corridor around the MPR.
Foreign Exchange Reforms and Market Stability
Cardoso also noted that critical foreign exchange (FX) reforms were introduced to enhance market efficiency. The unification of multiple exchange rate windows contributed to a 79.4% increase in remittances via International Money Transfer Operators, which rose to $4.18 billion in the first three quarters of 2024, compared to $2.33 billion during the same period in 2023.
Additionally, the CBN addressed key FX-related challenges by clearing a $7 billion FX backlog, restoring market confidence, and improving FX liquidity. The bank also lifted restrictions on 41 items previously banned from access to the official FX market since 2015 and introduced new minimum capital requirements for banks, set to take effect in March 2026, to enhance resilience and global competitiveness in the financial sector.
Enhancing Financial Inclusion and Transparency
The CBN further launched the WIFI initiative under the National Financial Inclusion Strategy, aimed at reducing the gender gap in financial access by empowering women through financial services, education, and digital tools. Additionally, the Nigeria Foreign Exchange Code was introduced to ensure integrity, transparency, and efficiency in the FX market.
Cardoso described the FX code as a binding commitment by the financial sector to rebuild trust and boost investor confidence. “These reforms reflect the CBN’s dedication to fostering an enabling environment for inclusive economic development,” he said.
Macroeconomic Stability and Inflation Targeting
On inflation control, the CBN governor warned that managing disinflation amid persistent economic shocks would require strong policy coordination between fiscal and monetary authorities. He emphasized the importance of maintaining price stability, transitioning to an inflation-targeting framework, and restoring purchasing power to alleviate economic hardship.
Despite these challenges, Cardoso expressed optimism that Nigeria had turned a corner, with disinflation now within reach. He stressed the need for bold and coordinated policy measures to consolidate economic progress.
Looking ahead, Cardoso noted that global capital flows to emerging markets could improve as advanced economies ease monetary policies. However, Nigeria’s ability to attract foreign investments would depend on investor confidence in domestic reforms, macroeconomic stability, and positive real returns on investment.
He reiterated that the CBN’s shift from unorthodox to orthodox monetary policies was aimed at restoring confidence, strengthening policy credibility, and prioritizing price stability. Encouragingly, FX liquidity is improving, and the naira is gradually aligning with market fundamentals, creating a more predictable environment for production, exports, and essential imports.
As the CBN continues to implement reforms, the focus remains on stabilizing the economy, boosting investor confidence, and ensuring sustainable economic growth in 2025 and beyond.
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