Nigeria Senate Grills CBN on Reforms, Inflation, FX Policies; Demands Credit Expansion

Nigeria's Senate on Tuesday subjected the Central Bank of Nigeria (CBN) to rigorous questioning regarding its monetary policies, banking sector recapitalization, inflation control, and foreign exchange reforms. The lawmakers expressed concern that the benefits of recent reforms should translate into greater credit availability for the nation's productive sectors, rather than merely inflating bank balance sheets.

During an oversight session, the Senate Committee on Banking, Insurance and Other Financial Institutions, chaired by Senator Mukhail Adetokunbo Abiru, pressed the CBN for explanations on several key issues. These included the status of banks yet to meet new recapitalization requirements, persistent complaints about excessive bank charges, challenges with electronic transactions, cybersecurity measures, the quality of naira notes in circulation, financial inclusion efforts, and the apex bank's audited financial statements. The committee also questioned the sharp increase in CBN's liquidity sterilization operations and the method of offsetting the Federal Government's Ways and Means advances.

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The benefits of recent reforms must translate into increased credit to productive sectors of the economy rather than larger bank balance sheets.

CBN Governor Olayemi Cardoso defended the bank's policy direction, asserting that reforms implemented over the past three years have successfully restored macroeconomic stability. He highlighted that these measures have bolstered investor confidence, stabilized the foreign exchange market, and positioned the Nigerian economy for sustainable growth amidst global economic uncertainties. Cardoso appeared before the committee with the four Deputy Governors and directors of key departments, presenting the bank's first statutory briefing to the National Assembly for 2026.

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Reforms introduced over the past three years had restored macroeconomic stability. He also said the reforms had strengthened investor confidence, stabilised the foreign exchange market and positioned the economy for sustainable growth despite global economic uncertainties.