Cardoso Rejects Calls for CBN to Return to Intervention Programs

Central Bank of Nigeria (CBN) Governor Olayemi Cardoso has strongly defended the apex bank's move back to orthodox monetary policy, cautioning against renewed calls for interventionist programs. He argued that such past measures had previously distorted the institution's balance sheet and diminished policy effectiveness.

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President Bola Tinubu and his government have failed to address the country’s shocking spate of abductions targeting school children, rural communities and internally displaced persons across the country.

Cardoso made these remarks during a Monetary Policy Committee (MPC) workshop on May 21, 2026. He reaffirmed the CBN's commitment to transparency and evidence-based decision-making, asserting that current reforms are crucial for restoring confidence in the Nigerian economy and bolstering macroeconomic stability. The workshop brought together key stakeholders to discuss enhancing monetary policy effectiveness amidst evolving economic conditions.

Reflecting on Nigeria's monetary policy history, Cardoso pointed out challenges faced by the bank upon the current administration's assumption of office. These included weakened institutional autonomy, reduced policy credibility, and an over-reliance on unorthodox tools. He noted that these issues blurred the lines between fiscal and monetary responsibilities, decreased transparency, and limited policy impact, while the foreign exchange market was opaque and inefficient.

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According to him, these challenges blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions. He also observed that the foreign exchange market was opaque and inefficient, while weak fiscal-monetary coordination further constrained economic outcomes.

According to the CBN statement, these structural weaknesses contributed to rising inflation, exchange rate volatility, and a decline in investor confidence. However, Cardoso indicated that recent reforms have begun to reverse these trends. The bank has reinstated a more conventional approach to monetary policy, emphasizing traditional instruments and the Monetary Policy Rate. Improvements in liquidity management, forward guidance, and communication have boosted transparency and helped anchor expectations. Cardoso observed that inflation, though still high, has started to moderate, and exchange rate stability has improved, contributing to a gradual restoration of confidence.

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As a result, the Governor noted that inflation, while still elevated and requiring close monitoring, has begun to moderate, and exchange-rate stability has improved. Enhanced transparency in the foreign exchange market has also supported more efficient price discovery and reduced volatility, contributing to a gradual restoration of confidence.