Three years of Cardoso: CBN gains face real economy test

Three years after Olayemi Cardoso took over as Governor of the Central Bank of Nigeria, the apex bank has recorded measurable gains in foreign reserves, currency-market transparency and financial-sector stability. But expensive credit, a weaker naira and slow transmission of improving macroeconomic indicators to businesses and households show the reform programme is still a work in progress, Sami Tunji writes.

Where the reforms started

Cardoso assumed office on September 22, 2023, when the CBN was confronting overlapping crises. Headline inflation stood at 26.72 per cent, the Monetary Policy Rate was 18.75 per cent, and gross external reserves were about $33.2bn.

The official exchange rate was around N770 to the dollar, but limited liquidity meant many businesses could not obtain foreign currency at that price. The bank also faced more than $7bn in unsettled foreign exchange obligations, an expanding development-finance portfolio and weakened confidence in monetary management.

Gains and unfinished business

The CBN has since recorded gains in foreign reserves, currency-market transparency and financial-sector stability. Those improvements have not fully reached companies and households.

Credit remains expensive. The naira remains weaker. Improving macroeconomic indicators are still transmitting slowly to the real economy. That gap is the test the reform programme now faces.

What it means

For Nigerian businesses and consumers, the CBN’s progress on reserves and market transparency has not yet translated into cheaper borrowing or stronger purchasing power. The reform agenda remains a work in progress.