In the past year, Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), has led a committed effort toward effective monetary policy. Under his leadership, the CBN has adopted “Compliance” as its guiding principle. As a result, several policies have been introduced to rebuild trust with stakeholders, provide a supportive environment for investments, and stimulate job creation. Though both Cardoso and his team acknowledge that the CBN and the economy are not yet where they aspire to be, a close review of their performance over the past 12 months reveals progress and a promising outlook for financial stability.
At the 2023 annual bankers’ dinner, Cardoso reiterated the Bank’s commitment to realigning with its core mandate by moving away from quasi-fiscal interventionist activities and focusing on orthodox monetary tools. Staying true to his word, the CBN has worked within the framework of the CBN Act 2007, targeting monetary and price stability. A major task for the new leadership was addressing inflation, which was driven by excess money supply prior to Cardoso’s tenure. In his first Monetary Policy Committee (MPC) meeting in February 2024, the CBN adopted an aggressive approach, raising the policy rate consecutively. This strategy appeared justified, as inflation declined in July and August 2024—the first drop in 19 months. The Bank’s gradual shift toward inflation targeting, improved transparency, and forward guidance has bolstered public confidence and aligned expectations with stakeholders.
In tackling corporate governance, Cardoso’s zero-tolerance policy gained immediate attention. His decisive action against Heritage Bank Plc, which saw its license revoked, demonstrated a strict approach to financial stability. The Bank had been under pressure from persistent financial instability and repeated non-compliance with regulatory standards. Heritage Bank’s fate underscored the CBN’s resolve to address non-performance swiftly.
Under Cardoso, the CBN moved to exit quasi-fiscal operations by October 2023, limiting its involvement to specific interventions, such as donating fertilizer to the Ministry of Agriculture to support food production and price control. Beyond this, the Bank’s focus has remained solely on monetary policy.
One of the pressing issues Cardoso inherited was foreign exchange (forex) liquidity, exacerbated by limited dollar inflows and a volatile national currency. Cardoso personally chaired a task force to engage operators in the International Money Transfer sector, resulting in over a 130 percent increase in remittance inflows. By August 2024, Nigeria recorded $553 million in inflows through remittances. In addition, the CBN’s unification of forex rates minimized arbitrage opportunities and reduced volatility, as the Bank cleared a verified $7 billion backlog. External reserves rose from $33.6 billion in October 2023 to $37.9 billion by July 2024, reflecting a more stable forex market.
The Bank’s renewed focus on local and international collaborations has attracted foreign investment and driven business growth. Regular inter-agency meetings on emerging issues—such as cryptocurrency frameworks and infrastructure financing—foster better coordination with other regulators. Transparency has become a cornerstone of the CBN’s operations, further reducing uncertainties and strengthening trust between the Bank, the public, and investors.
To align the banking sector with Nigeria’s vision of a trillion-dollar economy, the CBN introduced new minimum capital requirements on March 28, 2024. Commercial banks with international authorization must now hold N500 billion in capital, while those with national and regional licenses must maintain N200 billion and N50 billion, respectively. Within the same period, one bank transitioned to a non-operating financial holding company, while another upgraded from a merchant bank to a national commercial bank. Additionally, two banks received Approvals-in-Principle (AIPs) for regional licenses, and one gained approval for regional non-interest banking. In the microfinance sector, 16 new licenses were granted, 53 revoked licenses were reinstated, and five new finance companies were approved.
The CBN also revamped the Bureau de Change (BDC) sector by updating licensing and capital requirements and introducing a franchise model to improve forex distribution and oversight. Cardoso’s administration has enhanced Nigeria’s climate finance landscape by co-developing the Carbon Market Framework with the Nigerian Climate Change Council, opening pathways to sustainable finance and foreign investment.
Cardoso’s team has been proactive in addressing customer grievances. From October 2023 to September 2024, the Bank resolved 15,306 out of 19,988 customer complaints—achieving a resolution rate of 76.58 percent. As part of these efforts, refunds totalling N7.05 billion and $714,569 were facilitated for customers in disputes with financial service providers. This focus on fair treatment has reaffirmed the Bank’s commitment to consumer protection. Sanctions have been rigorously applied to deter unethical behaviour and promote transparency across the financial sector.
Digital transformation has also been central to the CBN’s strategy. In the past year, the Bank launched the Unified Complaints Tracking System (UCTS) and introduced a USSD code (*959#) to verify the legitimacy of licensed financial institutions. It also rolled out the Women Entrepreneurs Finance Initiative (We-FI) Code, aimed at reducing the 9 percent gender gap in financial inclusion by improving access to finance for women-led MSMEs. The Financial Education Curriculum (FEC) for schools has been updated to match global standards, fostering financial literacy among young Nigerians.
The CBN has also intensified its Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) efforts. Between October 2023 and September 2024, the Bank enhanced supervision through spot checks on Nigerian banks and their foreign subsidiaries, accelerating efforts to remove Nigeria from the Financial Action Task Force (FATF) Grey List. These efforts aim to foster a secure investment environment, attract foreign capital, and strengthen Nigeria’s financial reputation.
In July 2024, new guidelines were introduced to manage dormant accounts, unclaimed balances, and other financial assets. These measures aim to reunite funds with rightful owners while ensuring unclaimed assets are held in trust. To build financial resilience, the CBN prohibited banks from distributing unearned income, including foreign currency revaluation gains, for the financial year ending December 31, 2023. This policy ensures stronger countercyclical buffers and promotes transparent financial reporting.
The Bank has also refined its early warning systems to detect systemic risks, allowing timely interventions to mitigate potential contagion effects and safeguard financial stability. In addition, the CBN has embraced data-driven decision-making tools, such as Dynamic Integrated Analytic Modeling (DIAMoND) and the Macro Diagnostic Framework, to enhance monetary policy formulation. By leveraging big data, the Bank has improved forecast accuracy and developed indices to measure policy uncertainty.
The CBN’s initiatives have drawn praise from international partners, including the International Monetary Fund (IMF), and strengthened Nigeria’s position as a financial hub in Africa. Through strategic reforms and improved governance, Cardoso’s leadership over the past 12 months has set the stage for long-term economic growth and development.
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