Cardoso’s Economic Reforms Yield Gains at CBN

Cardoso’s Economic Reforms Yield Gains at CBN 

…Inflation Drops, Forex Market Stabilizes, Financial Sector Strengthened  

In the face of Nigeria’s economic challenges, the leadership of Dr. Olayemi Cardoso as Governor of the Central Bank of Nigeria (CBN) has brought a wave of impactful reforms, leading to stabilization and renewed investor confidence.  

Appointed by President Bola Ahmed Tinubu, Dr. Cardoso took charge at a critical time when inflation was soaring, the forex market was unstable, and financial institutions struggled with liquidity issues. Through strategic policy interventions, he has spearheaded efforts to revive the economy and improve Nigerians’ standard of living.  

Tackling Inflation and Strengthening Monetary Policy

A key focus of Dr. Cardoso’s reforms was addressing inflation, which had eroded purchasing power and driven up the cost of living. Recognizing excessive money supply as a major inflation driver, the CBN adopted tighter monetary policies, increasing the Monetary Policy Rate (MPR) by 50 basis points. These measures initially caused short-term disruptions, including higher interest rates and reduced consumer spending. However, their long-term effects have been remarkable.  

Inflation, which had risen steadily from 2022 to 2024, dropped to **24.48% in January 2025**, down from **32.49% in December 2024**. Food inflation, which constitutes nearly half of Nigeria’s total inflation, saw a significant decline from **39.84% to 26.08% year-on-year** in January 2025.  

This drop in inflation translated into lower food prices, providing much-needed relief to consumers. The price of beans fell from **₦11,000 to ₦8,000**, while garri dropped from over **₦4,000 to between ₦2,000 and ₦1,500**. These positive trends reflect the success of the **Inflation-Targeting Framework** introduced by Dr. Cardoso, which aims to stabilize prices, reduce currency volatility, and foster economic growth.  

Forex Market Stabilization and Investor Confidence  

The Cardoso-led CBN has also made significant strides in stabilizing the foreign exchange market. By implementing a unified forex framework, the bank increased liquidity, reduced distortions, and ensured a more predictable exchange rate environment.  

Key achievements in the forex market include:  

- Clearing 57 backlogged forex requests, addressing long-standing payment delays.  

- Boosting Nigeria’s external reserves, ensuring greater economic stability.  

- Strengthening monetary-fiscal coordination through the Fiscal and Monetary Policy Coordination Framework (FMPCF) and the Financial Services Regulation Coordinating Committee (FSRCC).  

Additionally, Dr. Cardoso’s leadership facilitated Nigeria’s removal from the FATF Grey List, a significant milestone that restored international confidence in the nation’s financial system.  

Financial Sector Reforms and Consumer Protection  

The CBN has introduced several initiatives to enhance transparency and security in the financial sector. The introduction of a Unified Tracking System (UCTS) and USSD verification for licensed financial institutions has improved monitoring and reduced fraud.  

Other key measures include:  

-Mandatory registration of Point-of-Sale (PoS) operators with the Corporate Affairs Commission (CAC)to curb illicit financial activities.  

- Enhanced regulation of Bureau de Change (BDC) operators to promote compliance and national security.  

- Implementation of the Early Warning Syste to detect risks in the financial system before they escalate.  

To protect consumers, the CBN has enforced strict compliance measures, ensuring fintech companies adhere to ethical standards. This has improved public confidence in the banking system and fostered better engagement with formal financial institutions.  

Empowering Nigerians Through Financial Inclusion 

Beyond stabilizing the economy, Dr. Cardoso has championed financial inclusion initiatives aimed at empowering women, youths, and small business owners. Programs such as the *lWomen Entrepreneur Finance Initiative (We-Fi) Code and the updated National Financial Literacy Framework have provided support for entrepreneurs, encouraged business mentorship, and enhanced capacity building.  

These efforts have also extended to reviving Nigeria’s agricultural and manufacturing sectors, ensuring more Nigerians have access to funding and opportunities for economic growth.  

A New Era of Economic Stability 

Dr. Olayemi Cardoso’s tenure at the CBN is already leaving a lasting impact. His reforms have not only helped Nigeria navigate economic turbulence but have also set the stage for sustained growth. With inflation declining, the forex market stabilizing, and financial regulations tightening, Nigeria is regaining its economic footing.  

As these gains continue to materialize, the nation moves toward a future of increased prosperity, stability, and opportunity for all.