On September 23, 2023, Mr. Olayemi Cardoso took office as Governor of the Central Bank of Nigeria (CBN), stepping into a challenging economic landscape following the resignation of his predecessor, Godwin Emefiele. Cardoso’s tenure has been marked by efforts to stabilize Nigeria’s volatile economy, amid the fallout from the removal of the petrol subsidy and the naira float policy, which contributed to inflation and a weakened naira.

Key Measures and Reforms

1. Bank Licensing and Expansion: Cardoso’s CBN issued several new banking licenses and approvals, including those for national commercial banks, non-interest banks, and microfinance institutions. The sector witnessed re-licensing of 53 previously revoked banks and new operational approvals for five finance companies.

2. Recapitalization and Regulatory Reforms: In November 2023, the CBN introduced new capital thresholds for banks, to be met by March 2026, along with guidelines for Bureau de Change operations. These measures aim to enhance foreign exchange distribution and oversight.

3. Consumer Protection: Under Cardoso’s leadership, the CBN resolved 76.58% of customer complaints and facilitated refunds totaling over N7 billion. The introduction of the Unified Complaints Tracking System and the We-FI Code sought to bridge the gender gap in financial inclusion.

4. Cybersecurity and AML Measures: The CBN implemented ISO 27001 standards and updated anti-money laundering frameworks to accommodate virtual assets and strengthen resilience against financial crimes.

5. Monetary Policy and FX Market: Cardoso’s CBN streamlined Nigeria’s FX market, addressing a $7 billion backlog in FX forwards and reducing volatility. External reserves increased to $37.9 billion by July 2024. The CBN also revised regulatory frameworks to support monetary policy and stabilize the financial system.

Economic Impact and Criticism

Despite these reforms, the Nigerian economy has faced severe challenges. The naira hit an all-time low, and inflation remained high, driving up food costs and deepening the financial struggles of citizens. Cardoso, however, remains optimistic, describing the situation as a “correctional” phase necessary for long-term transformation.

Experts like Dr. Muda Yusuf, Director General of the Center for Promotion of Private Enterprise (CPPE), commended Cardoso for improving corporate governance and transparency, particularly in foreign exchange transactions. However, Yusuf expressed concerns about the CBN’s extreme monetary tightening, which has hurt investment and financial intermediation, with interest rates soaring between 28% and 35%.

Yusuf also criticized the complete liberalization of the currency, arguing that some level of control is necessary for developing economies like Nigeria’s. He highlighted concerns over capital flight, corruption, and money laundering, which exacerbate pressure on the naira.

Future Outlook

Cardoso’s first year as CBN Governor has been a mixed bag of regulatory reforms and economic turbulence. While his efforts to restore confidence in Nigeria’s financial system have been noted, significant challenges remain, particularly in curbing inflation and stabilizing the naira. As Cardoso continues to implement his strategic plans, experts hope for more effective interventions to ease the burden on Nigerians and foster economic growth.