The Difficult Playbook of Cardoso’s CBN

Highlights from the 2024 IMF/ World Bank Spring Meetings.  

Undoubtedly, Dr Olayemi Cardoso’s takeover of the reins of the Central Bank of Nigeria (CBN) in September 2023 at a time when Nigeria grappled with the bitter aftertaste of various monetary chaos was a difficult task. Within a year, Nigeria’s economy suffered several shocks. These included the forex liquidity crisis largely caused by limited United States dollar in-flows and the naira’s free fall owing to the exchange rate harmonization initiatives. Moreover, the rising inflation and, importantly, the lingering trust deficit in the CBN stemming from the naira redesign policy in October 2022, meted untold hardship on individuals and businesses in Nigeria. Collectively, these challenges were merely a foretaste of the issues on ground.

Within nine months of Cardoso steering the tides of Nigeria’s monetary policies, the CBN has introduced a series of policies that have since delivered various outcomes. Some positives have included the clearance of all foreign exchange backlog totalling about $7 billion and reversing the tides of the naira value, which grew from one of 2023’s worst-performing currencies, to become the best-performing currency for April 2024. Yet, this achievement was short-lived as the naira has since plummeted to the worst-performing currency in the world...