October 17, 2024/CSL Research
The Central Bank of Nigeria (CBN) recently released a special edition of its CBN Update, titled “Team Cardoso First 365 Days: Building the Foundation for a New Era.” By Saturday, 05 October 2024, exactly 365 days had passed since Mr. Cardoso’s confirmation as Governor of the CBN, a role in which he has guided the bank with a focus on strategic reforms, strengthened priorities, and a renewed vision. The special publication highlights the transformative journey of his first year in office.
In our view, Cardoso’s reforms are ambitious, demonstrating a clear understanding of Nigeria’s economic challenges. While these measures may result in short-term trade-offs—such as potential impacts on economic growth and the welfare of a population already struggling with poverty—they are aimed at building a more stable and resilient economy. Ultimately, Cardoso’s leadership will be assessed by how well he balances these reforms with the broader goal of promoting inclusive growth and development for Nigeria.
In the first year of his leadership, Mr. Olayemi Cardoso, alongside his deputy governors unveiled their policy direction and began implementing key elements of their 10-point reform agenda. This agenda includes: 1. Compliance with the CBN Act 2007 to ensure monetary and price stability; 2. Instituting a zero-tolerance policy regarding corporate governance in the financial system; 3. Exiting quasi-fiscal functions with effect from October 2023; 4. Catalysing the creation of specialised institutions and financial products to support emerging sectors of the economy; 5. Facilitating new regulatory frameworks to unlock dormant capital in land and property holdings; 6. Enhancing Nigeria’s payment systems and protecting customers’ rights; 7. Accelerating access to consumer credit and expanding financial inclusion for the masses; 8. De-risking instruments to increase private sector investment in housing, textiles and clothing, the food supply chain, healthcare, and educational supplies; 9. Exercising the CBN’s convening power to bring key multilateral and international stakeholders to participate in government and private sector initiatives; and 10. Collaborating with fiscal authorities to enhance accretion to Nigeria’s foreign reserves and ensure sustainable liquidity in the foreign exchange market.
Governor Olayemi Cardoso has focused on several critical reforms. A key effort has been tackling inflation, as demonstrated by the Monetary Policy Committee (MPC) raising the Monetary Policy Rate (MPR) by 850 basis points to 27.25% since its first meeting in February 2024. As part of his zero-tolerance policy on corporate governance, the Governor revoked the
license of Heritage Bank Plc due to its prolonged financial struggles. In addressing foreign exchange liquidity and boosting Nigeria’s foreign reserves, deliberate engagement with International Money Transfer Operators (IMTOs) has yielded significant results, leading to over a 130% increase in inflows.
By August 2024, remittances into the country had surpassed US$553 million, contributing to the clearing of a verified backlog of US$7 billion and raising external reserves to US$38.8 billion by 15 October 2024, up from US$33.6 billion in October 2023. To further strengthen the banking sector and shield it from risks, Mr. Cardoso’s team introduced new minimum capital requirements for banks. This strategic move is widely seen as aligning Nigeria’s banks with the broader national goal of building a trillion-dollar economy by 2030.
