Olayemi Cardoso, the Central Bank governor, has doubled down on his commitment to orthodox monetary policy and warned against returning to the interventionist programmes that plagued the economy before this administration took over.
Speaking at the opening of the Monetary Policy Committee workshop in Abuja on Wednesday, Cardoso said the CBN inherited an economy hamstrung by "weakened institutional autonomy, reduced policy credibility, and reliance on unorthodox monetary tools." Those problems, he explained, blurred the line between what the central bank should do and what the government's fiscal authority should handle.
"The foreign exchange market was opaque and inefficient, while weak fiscal-monetary coordination further constrained economic outcomes," Cardoso said. The mess left the economy vulnerable to "rising inflationary pressures, exchange-rate volatility, and erosion of investor and public confidence."
Since taking the helm two and a half years ago, Cardoso's team has systematically unwound that approach. The CBN has restored what he called "a more orthodox approach to monetary policy" centred on the policy rate as the primary signalling tool instead of ad hoc interventions that distorted the central bank's balance sheet. "Improvements in liquidity management, forward guidance and policy communication have enhanced transparency and helped anchor expectations among households, businesses and investors," he said.
The results, though incomplete, show movement in the right direction. Inflation, which soared above 30 percent at one point, has begun to moderate. The naira, which fell to historic lows against the dollar, has steadied. But Cardoso made clear that the job is not done and that the CBN will not backslide. He cautioned policymakers against the temptation to return to interventionist measures that might deliver short-term relief but would ultimately wreck the credibility the bank has rebuilt.
"The institution's renewed credibility over the past two and a half years has largely stemmed from disciplined reliance on conventional policy tools," he said. Decision-making at the CBN now rests on data-driven analysis and structured deliberation rather than political pressure or ad hoc fixes, he added.
Cardoso stressed that transparency, evidence-based policymaking and institutional strengthening remain the pillars on which the CBN will build sustainable macroeconomic stability. The MPC workshop this week will allow the committee members to sharpen their understanding of these principles and ensure they apply them consistently in their decisions.
