The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has revealed that without the bank’s decisive policy interventions, inflation in Nigeria could have skyrocketed to a staggering 42.81 per cent by the end of 2024. This stark warning, delivered at the 2025 Monetary Policy Forum, underscores the crucial role of the CBN in mitigating the impact of economic shocks and safeguarding price stability.
“Counterfactual estimates suggest that without these decisive policy interventions, inflation could have reached 42.81 per cent by December 2024,” Cardoso stated. “Throughout 2024, the bank implemented several bold policy measures across six MPC meetings, including raising the Monetary Policy Rate by a cumulative 875 basis points to 27.50 per cent.” These measures, which also included a significant increase in the Cash Reserve Ratio and adjustments to the asymmetric corridor around the MPR, reflect the CBN’s commitment to curbing inflationary pressures.
Beyond monetary policy adjustments, the CBN has undertaken crucial foreign exchange reforms to enhance market efficiency. The unification of multiple exchange rate windows has yielded significant results, with remittances via International Money Transfer Operators surging by a remarkable 79.4 per cent to $4.18 billion in the first three quarters of 2024, compared to $2.33 billion in the same period of 2023. This positive trend aligns with the CBN’s projection that diaspora remittances will reach a substantial N31.79 trillion when fourth-quarter figures for 2024 are released.
The CBN’s efforts to stabilise the Nigerian economy extend beyond monetary and exchange rate policies. The launch of the WIFI initiative under the National Financial Inclusion Strategy aims to empower women with financial services and bridge the gender gap in financial access. Furthermore, the introduction of the Nigeria Foreign Exchange Code signifies a commitment to ensuring integrity, transparency, and efficiency in the FX market.
As Cardoso emphasised, “The code is a binding commitment by the financial sector to rebuild trust and boost confidence.”
Looking ahead, the CBN Governor acknowledged the challenges that lie ahead. Managing inflation amidst persistent shocks will require strong coordination between fiscal and monetary authorities.
“The focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” Cardoso stated.
While acknowledging the challenges, Cardoso expressed cautious optimism. “Nigeria has turned a corner,” he asserted, “and disinflation is within reach.” However, he stressed the need for continued vigilance and bold policy measures to consolidate the gains achieved.
The CBN’s transition towards orthodox monetary policies is a critical step in restoring confidence and strengthening policy credibility. By prioritizing price stability and enhancing market efficiency, the CBN aims to create a more predictable and conducive environment for economic growth and development. The improving FX liquidity and the gradual alignment of the naira with market fundamentals are encouraging signs that point towards a more stable and sustainable economic future for Nigeria.
