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  • CBN will prioritise core mandate of price stability, Cardoso says

    CBN will prioritise core mandate of price stability, Cardoso says

    The Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, has reiterated that  his leadership would focus mainly on the core mandate of price stability.

    According to a statement from the CBN, Cardoso disclosed this recently, while playing host to the Impact Investing Community.

    The News Agency of Nigeria (NAN) reports that the Impact Investing Community was led by the 14th Emir of Kano,  Muhammadu Sanusi II, who is a former Governor of the CBN.

    Cardoso said that he and his team were determined to change the narrative about the CBN, and make it more impactful in the lives of Nigerians by curtailing inflation.

    According to him, at the end of our tenure, we want to look back and see that our policies have positively impacted people’s lives.

    He said that the community represented an excellent future for Nigeria and has the potential to transform the country’s economy.

    Cardoso assured the visitors that the apex bank would collaborate with them in the direction of putting in place frameworks that will encourage investments.

    In his remarks, Sanusi said that the CBN’s activities had a massive impact on the lives of Nigerians.

    According to him, many people often do not know the impact of a Central Bank’s works until a Central Bank fails.

    He urged the new leadership at the CBN to work persistently at driving down inflation rate, which he said had severely impacted the wealth of individuals.

    Sanusi acknowledged the importance of long-term planning by the CBN in achieving its goals.

    He emphasised on  the need for the fiscal authorities to focus on agriculture and education, especially for the girl-child.

    Sanusi pledged his continued support, along with the Impact Investing Community to the CBN in achieving its goals.

    Also speaking, the Chairperson of Impact Investing Community, Mrs Ibukun Awosika, said that the team was at the CBN to register its willingness to support the apex bank.

    Awosika said that the organisation would support the authorities in changing Nigeria’s investment climate, by redirecting resources to areas where they will make the most positive impact.

    According to her, over 200 trillion dollars is available around the globe as investment funds, with Impact Investing controlling one trillion dollars of that sum.

    Read Also: Cardoso vows to change public perception of CBN

    She further said that Impact Investing, with a presence in over 41 countries, was willing to blend with traditional investment practitioners to make an impact in the country.

    Awosika sought the support of the CBN to enable the body to achieve its goal.

    Dr Bala Bello, CBN’s Deputy Governor, Corporate Services, underscored the importance of investment, saying that global capital was moving towards social investment.

    Bello  said that collaboration and effective communication were vital to successfully navigating the current challenges in the country.

    (NAN)

  • Cardoso vows to change public perception of CBN

    Cardoso vows to change public perception of CBN

    The new Executive Management Team at the Central Bank of Nigeria (CBN) has resolved to change the way people see the apex bank.

    The CBN governor, Olayemi Cardoso said he and the deputy governors are determined to alter the public perception surrounding the Bank.

    Specifically, Cardoso and his team pledged to make the CBN more effective in managing inflation and improving the economic well-being of Nigerians.

    Cardoso made this known in Abuja last week while playing host to the Impact Investing Community, led by the 14th Emir of Kano and Khalifa of the Tijaniyyah Sufi order of Nigeria and the neighbouring countries, Muhammadu Sanusi II, who is also a former Governor of the Central Bank of Nigeria.

    The CBN reiterated that under his leadership, the Bank will focus mainly on the core mandate of price stability.

    According to him, “at the end of our tenure, we want to look back and see that our policies have positively impacted people’s lives.”

    Also speaking at the meeting, the Chair of Impact Investing, Mrs. Ibukun Awosika, said: “Over $200 trillion was available around the globe as investment funds, with $1 trillion of it with impact investing.

    “Impact investing refers to the practice of investing money in companies, organizations, and funds with the intention of generating positive social and environmental impacts alongside financial returns. The main purpose of impact investing is to create positive change and address social or environmental challenges, while still expecting a financial return on the investment.

    “Impact investors prioritize businesses and projects that aim to solve important issues such as poverty, climate change, healthcare access, education, sustainable agriculture, and more. They analyze the potential impact of their investments and actively seek out opportunities where they can make a positive difference.

    “It combines the goals of both philanthropy and investment, emphasizing the need for sustainable and socially responsible business practices.

    Read Also: As Cardoso takes charge at CBN

    She further stated that Impact Investing, with a presence in over 41 countries, was willing to blend with traditional investment practitioners to make an impact in the country.

    While stressing the importance of social investment, she sought the support of the CBN to enable the body to achieve its goal.

    Earlier, Khalifa Sanusi noted that the CBN’s activities have significantly impacted the lives of Nigerians, adding that many people often “do not know the impact of a Central Bank’s works until a Central Bank fails.”

    Sanusi expressed concerns about the inflation rate and urged the new leadership at the CBN to work persistently at driving down the rate, which he noted had severely impacted the wealth of individuals.

    He also acknowledged the importance of long-term planning by the CBN in achieving its goals, just as he emphasised the need for the fiscal authorities to focus on agriculture and education, especially for the girl-child.

    Khalifa Sanusi, therefore, pledged his continued support, along with the Impact Investing Community, to the CBN in achieving its goals.

    The Deputy Governor in charge of Corporate Services, Dr. Bala Bello who also spoke at the meeting underscored the importance of investment, noting that global capital was moving towards social investment.

    He noted that collaboration and effective communication were vital to successfully navigating the current challenges in the country.

  • Sanusi to Cardoso: bring down inflation to protect people’s wealth

    Sanusi to Cardoso: bring down inflation to protect people’s wealth

    The former Central Bank of Nigeria (CBN) Governor and 14th Emir of Kano, Muhammadu Sanusi II, has advised CBN governor, Olayemi Cardoso to take strategic steps that will drive down the rate of inflation.

    Sanusi, who spoke when he led the Impact Investing Community team to the CBN headquarters in Abuja, expressed concerns about the inflation rate and urged the new leadership at the CBN to work persistently at driving down the rate, which he noted had severely impacted the wealth of individuals.

    He also acknowledged the importance of long-term planning by the CBN in achieving its goals, just as he emphasised the need for the fiscal authorities to focus on agriculture and education, especially for the girl-child.

    Sanusi equally expressed happiness at visiting the new CBN governor.

    He noted that the bank’s activities had a massive impact on the lives of Nigerians, adding that many people often “do not know the impact of a Central Bank’s works until a Central Bank fails.”

    Read Also: CBN to shelve development financing, says Yemi Cardoso

    He, therefore, pledged his continued support, along with the Impact Investing Community, to the CBN in achieving its goals.

    Inflation has continued to accelerate in recent months and is currently at 26.72 per cent as of September 2023.

    On his part, Cardoso reiterated that under his leadership, the bank will focus mainly on the core mandate of price stability.

    Addressing the team in his office, Cardoso said he and his team were determined to change the narrative about the Bank and make the Bank more impactful in the lives of Nigerians by curtailing inflation.

    He said: “At the end of our tenure, we want to look back and see that our policies have positively impacted people’s lives.”

    Speaking further, Cardoso thanked the Impact Investing Community for visiting the CBN, noting that the community represented an excellent future for Nigeria and has the potential to transform the country’s economy by tapping into the investment opportunities available across the country and the world.

    While commending the quality of leadership at Impact Investing Community and its effort to create awareness as well as build partnerships, the CBN governor assured them that the Bank would collaborate with them in the direction of putting in place frameworks that will encourage investments that will positively influence the lives of Nigerians and contribute to economic growth.

    Also speaking, the Chair of Impact Investing, Mrs. Ibukun Awosika, said they were at the CBN to register their willingness to support what the Bank and the Federal Government were doing in terms of changing Nigeria’s investment climate by redirecting resources to areas where they will make the most positive impact.

    According to her, over $200 Trillion was available around the globe as investment funds, with $1 Trillion of it with impact investing. She further stated that Impact Investing, with a presence in over 41 countries, was willing to blend with traditional investment practitioners to make an impact in the country. While stressing the importance of social investment, she sought the support of the CBN to enable the body to achieve its goal.

    Equally speaking at the meeting, the Deputy Governor in charge of Corporate Services, Dr. Bala Bello, underscored the importance of investment, noting that global capital was moving towards social investment. He thanked the team for its support, noting that collaboration and effective communication were vital to successfully navigating the current challenges in the country.

  • CBN to shelve development financing, says Yemi Cardoso

    CBN to shelve development financing, says Yemi Cardoso

    The Central Bank of Nigeria (CBN) governor, Olayemi Cardoso has given an insight into what will happen at the helm of affairs of the country’s apex bank.

    In a paper obtained from the CBN, the new CBN governor Yemi Cardoso, said the CBN would no longer be directly involved in development finance interventions.

    According to the document which showed Cardoso’s “preliminary assessment of the challenges facing the CBN”, the CBN governor stated that “much has been made of past CBN forays into development financing, such that the lines between monetary policy and fiscal intervention have blurred.

    “In refocusing the CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth.”

    Read Also: As Cardoso takes charge at CBN

    A source at the Central Bank of Nigeria (CBN) told The Nation that “in the past, the CBN has been involved in providing funding for various developmental projects. This has led to a blurred line between the CBN’s role in monetary policy and its intervention in fiscal matters.

    “However, there is a growing recognition of the need to refocus the CBN to its core mandate and limit its involvement in direct development finance interventions.”

    The source noted that to achieve this refocus, “one approach is to transition the CBN from directly providing financing for development projects to a more limited advisory role. Instead of directly funding projects, the CBN can provide guidance and expertise to help facilitate economic growth.

    “This advisory role can include providing recommendations on policy measures, regulations, and strategies that support economic development.

    “By limiting its direct intervention in development financing, the CBN can avoid potential conflicts between its role in monetary policy and its involvement in fiscal matters. This separation will allow the CBN to focus on its primary mandate of maintaining price stability, promoting financial stability, and ensuring the soundness of the banking system.

    The official who is privy to Cardoso’s agenda added that “shifting towards an advisory role allows the CBN to leverage its expertise and provide valuable insights to policy-makers and other stakeholders. The CBN can use its knowledge of the financial sector and its understanding of the broader economy to support decision-making processes that lead to sustainable economic growth.

    Cardoso in his document highlighted the advisory roles the CBN could play to include, for instance:

    Acting as a catalyst in the propagation of specialised institutions and financial products that support emerging sectors of the economy; facilitating new regulatory frameworks to unlock dormant capital in land and property holdings; accelerating access to consumer credit and expanding financial inclusion to the masses.

    Other advisory roles the CBN would play Cardoso said are: de-risking instrumentation to increase private sector investment in housing, textiles and clothing, food supply chain, healthcare, and educational supplies.

    According to Cardoso, “These verticals have huge demand patterns, with the potential for high local inputs and value retention, and can be the basis for rapid industrialization.”

    The CBN he said will exercise “convening power to bring key multilateral and international stakeholder participation in government and private sector initiatives”. 

    Before delving into what he intends to do as the CBN governor, Cardoso identified some of the challenges currently confronting the apex bank.

    According to him, “In assessing challenges currently facing the Central Bank of Nigeria, preliminary questions are being raised on addressing these challenges.

    Failure in corporate governance in CBN: How will issues of governance be addressed? Diminished institutional autonomy: How can public and financial systems’ stakeholder confidence be restored in the autonomy and integrity of CBN?

    Need to refocus CBN back to core functions: What needs to be in place to revert to evidence-based monetary policies? Discontinuation of unorthodox monetary policies and Foreign Currency management?

    Unorthodox use of Ways and Means spending: What controls can CBN develop to enforce statutory limits in the use of Ways and Means of financing public sector deficit?

    Backlog of FX demand: How much of the backlog is real versus speculative/ hoarding? Are there creative financing options for clearing the short to medium-term backlog?

    Lack of clarity in fiscal and monetary relationships – where are the delineations, and what should be the limits in CBN’s fiscal side interventions? Inflation and price stability: What are the causes, and what is CBN’s proposed response to address inflation and price stability issues?

    Access to FX market and FX price discovery: What mechanisms exist to address FX rate unification under a willing buyer and willing seller arrangement? What should be the role of the Central Bank in the FX market? Is there a need for interest rate realignment to money supply, inflation, and market realities?

    Current Financial System Stability: What is the current state of the financial system? Are CBN surveillance frameworks being updated proactively to track the expanding use of electronic payment systems by Fintech and Telcos?

    To add perspective to these questions and provide answers, the source stated that “one of the main challenges Cardoso will face is the need to refocus the CBN back to its core functions.

    “Over the years, the CBN has been involved in a wide range of activities beyond its primary mandate, such as developmental projects and implementing unorthodox monetary policies.

    “The discontinuation of unorthodox monetary policies. In recent years, the CBN has resorted to unconventional measures to manage the economy, such as direct intervention in sectors like agriculture and manufacturing.

    “While these policies may have had short-term benefits, they can also create distortions and undermine the effectiveness of monetary policy in the long run. Therefore, there is a need to gradually phase out such unorthodox measures and transition to more conventional and evidence-based policies.

    He said: “Foreign currency management is also a challenge for the CBN. Nigeria has experienced foreign exchange scarcity, and the CBN has had to intervene in the forex market to stabilize the currency.

    “However, this has resulted in multiple exchange rates and limited access to foreign exchange for businesses and individuals. To address this challenge, the CBN needs to adopt a more transparent and market-driven approach to foreign currency management. This could involve liberalizing the forex market, reducing restrictions, and allowing market forces to determine exchange rates.

    “Overall, addressing these challenges requires a shift towards evidence-based policymaking, discontinuation of unorthodox measures, and implementing a more transparent and market-driven approach to foreign currency management. These changes would help restore confidence in the CBN’s operations and strengthen its ability to effectively fulfill its core functions.

    Cardoso has figured out how a refocused CBN can support economic growth. According to him, “the economic policy proposals of the Administration identify a set of fiscal reforms and growth targets that will achieve $1.0 trillion GDP within eight years.

    He said: “In reviewing selected BRICS and MINT countries, with large populations and similar developmental characteristics as Nigeria, it is interesting to identify macro-economic indices that point to Nigeria’s economic trajectory, given the faithful implementation of the proposed economic reforms.

    “In economies bigger than $1.0 trillion these indicators include moderate inflation, sizable foreign reserves, and the capacity to quickly rebound from a cyclical economic downturn.”

  • As Cardoso takes charge at CBN

    As Cardoso takes charge at CBN

    By Haruna Lawal

    With the appointment and confirmation of Michael Olayemi Cardoso as helmsman at the Central Bank of Nigeria (CBN), the much-anticipated stability in the management structure is expected to begin to take shape. With this development, many an analyst, have devoted time and energy to unveiling the new central banker in relation to the task ahead as the economy continues to struggle to cope with multiple pressures that are impacting harshly on the citizens.

    The new CBN helmsman faces spiking inflation, higher interest rates, a falling bank adequacy ratio, volatile exchange rate among others which will test his preparedness for the job. There is no contesting the fact that Cardoso’s appointment is well deserved having proven his mettle elsewhere.

    In confronting these and other challenges, he will be expected to commence the recapitalization of the banking sector. This is imperative as the value of the naira continues to drop in the market. Similarly, he will also strive to restore confidence to the foreign exchange market, deepen and ensure efficiency of the financial system, capital requirements for banks, addressing ways and means financing of fiscal deficit as well as completely jettisoning the controversial naira redesign policy. Others are the tenure and cost of funds in the banking system, reducing concentration of risks in banking sector, initiation of stakeholders’ engagement and corporate governance.

    Cardoso is assuming the leadership of the CBN at a very crucial time in the nation’s economic history. There is no gainsaying it that a serious confidence crisis in the foreign exchange market is fuelling an unprecedented speculative onslaught on the naira. Similarly, the economy is grappling with severe adverse effects of depreciating exchange rate, soaring energy costs, ravaging inflationary pressures, huge backlog of foreign exchange obligations that needs to be cleared and debt service obligations that need to be redeemed.

    Read Also; FG to give N25,000 grant to vulnerable pensioners

    The economic management orthodoxy of market forces has been called to question in the country following the social outcomes of the recent market-oriented reforms. But on the part of the CBN, it is pertinent to enjoin Cardoso and his team to ensure strategic and transparent intervention in the foreign exchange market in order to minimise volatility.

    Similarly, the CBN under this new management may have to look at the import and export (I&E) window and possibly create an autonomous window in the banking system where the currency can trade freely without any encumbrances. This is necessary to avert the diversion of remittances to other jurisdictions or the black market.

    Perhaps, drawing from the experience of foreign airlines some of which are looking elsewhere for business opportunities as a result of the government’s inability to satisfy their foreign exchange earnings, it is imperative that the government accords high priority to this area so as to restore the confidence of domestic and foreign investors.

    Before his appointment,Cardoso, had served in Lagos State under Governor Tinubu as Commissioner for Economic Planning and Budget. In this regard, he is considered an expert in fiscal policy as against the perceived mandate of the Central Bank, as an agency of government that superintends over monetary policy and microeconomic issues. Many also argue that this may not matter much considering the fact that one of his predecessors in office, Adamu Ciroma, a history graduate, who was appointed by General Murtala Mohammed as CBN governor, was assessed to have performed well in that office. That he later served as Minister of Finance, attests to this assessment.

    Regardless, he is coming into office at a time of heightened expectation- runaway inflation, fledgling value of the nation’s legal tender, the Naira, vis-à-vis other international currencies, exchange rate challenges, price instability among many other issues that are plaguing the economy.

    It is from this point of view that one is persuaded to posit that Cardoso has his job cut out for him.

    Nigerians expect him to hit the ground running and put in place policies that will bring the economy under control by fashioning out implementable monetary policies that will, hopefully, energise the micro economic issues the president will act on in his determination to give the economy, generally, the desired kiss of life.

    Beyond these general assumptions about his duties as the CBN governor, it is important to put him on notice that there is an urgent need to stabilize the price mechanism that has been impacting negatively on the economy, heating up the system and generating inflationary trends that are unhealthy and unacceptable. He is expected to bring down inflation, currently at double digit levels. He must not wait to be told that the society is finding it difficult to cope with the enormous challenges presented by an economy in distress. As a key economic adviser to the president, he will be expected to think on his feet and outside the box to initiate policies that are people- friendly.

    Another aspect of the economy that is responsible for the seeming crisis in the economy, regarded as exceedingly import- dependent, is the alleged political interference in the foreign exchange management. If this is the true position, it becomes hasty to envy him his appointment because the demands are not likely to ease anytime soon. However, Nigerians expect him to step on toes, including sensitive ones, in the management of the nation’s dwindling foreign exchange.

    It will, also, not be out of place, to expect the CBN governor to insist on the independence of the apex bank so as to avoid the abuse experienced lately in its application of the ways and means policy that almost turned it into the piggy bank of the executive branch.

    It is heartening to note that he has pledged to accord priority to clearing the backlog of unsettled foreign exchange obligations, enhance transparency, fix corporate governance and ensure confidence in the autonomy and integrity of the bank. Judging by his vast experience, the CBN governor has what it takes to give the apex bank a new lease of life and ultimately ensure the building of a virile economy.

    • Lawal, an economist, wrote from Lagos.

  • Financial reforms ready for unveiling, says Cardoso

    Financial reforms ready for unveiling, says Cardoso

    A new monetary and financial sector blueprint will soon be unveiled by Central Bank of Nigeria (CBN), its Governor Olayemi Cardoso hinted yesterday.

    The blueprint, Cardoso said, will serve as framework for implementation of major reforms by the apex bank.

    He gave insight into some guiding principles in the blueprint, with an assurance that the framework will be released in the days ahead.

    In a chat with a group of investors in his office, Cardoso said that the CBN will do all in its powers “to address identified distortions and ensure a conducive atmosphere for different categories of investors”.

    He noted that under his watch, “the new management team at the bank will do its best to tackle impediments to liquidity in the foreign exchange market in Nigeria”.

    Speaking specifically on liquidity management, Cardoso said his team will device a short-term goal to address “structural issues within the financial system that gave rise to the liquidity challenge in the first instance”.

    He said the CBN would “focus on strengthening its data-gathering system to ensure that only verifiable data will be relied upon for evidence-based decisions”.

    According to him, the CBN would also adhere to rules that are known, acceptable and transparent for the conduct of monetary policy.

    On the relationship between the monetary and fiscal authorities, the CBN governor said there would continue to be consensus between both authorities to harmonise their positions on the interest rate and inflation.

    He, however, said the bank would remain open to different views in its push for greater transparency.

     He said: “The bank would only provide strategic policy support to critical sectors of the economy while allowing experts to take charge of such critical sectors, given that the expertise lies within other relevant agencies”.

    Mrs. Ireti Samuel-Ogbu, who led the investors, said their mission was to explore the possibilities of stimulating more foreign investments in the country.

    Read Also: Cardoso to unveil monetary, financial sector agenda

    She underscored the matters concerning the bank’s autonomy and the imperative of augmenting the nation’s foreign reserve, among various other concerns.

    Cardoso and four deputy governors – Mrs. Emem Usoro, Mr. Muhammad Dattijo, Mr. Philip Ikeazor, and Dr. Bala Bello, were confirmed by the Senate on Tuesday, in line with extant laws.

    They were appointed on September 15 by President Bola Tinubu.

    Finance and economic experts said Dr. Cardoso’s confirmation as the 12th substantive CBN governor has renewed confidence in the management of the apex bank and the general economic prospects.

    Experts, who spoke on the prospects at the apex bank included: Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe; Managing Director, Economic Associates, Mr Ayo Teriba; Managing Director, APT Securities and Funds, Mallam Kasimu Kurfi; President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe; PChief Executive Officer, BIC Consultancy Services, Dr. Boniface Chizea; Professor Mike Obadan of the University of Benin; President, Association of Capital Market Academics of Nigeria (ACMAN), Prof Uche Uwaleke; Managing Director, SD & D Capital Management Limited, Mr Gbolade Idakolo and Former Executive Director, Keystone Bank Limited, Mr. Richard Obire.

    Experts said the new CBN team demonstrated a good grasp of the issues and confidence, which give hopes they may act with urgency to address key macroeconomic issues.

    They, however, cautioned that the tasks ahead were enormous and might take some time to restore a steady sense of balance.

     “Dr. Cardoso spoke with confidence and the required sense of urgency. My hope is that they will be backed by immediate and deliberate actions to quickly right the ship of the economy,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), said.

    He noted that Cardoso’s understanding of the importance of the issue of foreign exchange (forex) and increased transparency in all aspects of the affairs of the CBN infused confidence in the potential of the new management team.

    Obire advised that the new team would need to preempt and mitigate the potential risks facing the banking sector in the medium term due to recent government policies.

    Teriba, who decried recent degradation of the apex bank, advised the new team to revisit some of the critical decisions taken by its predecessor including the sale of banks and restriction of forex access to some critical sectors of the economy.

    He said the new CBN team should hit the ground running and resolve serious governance issues, and lack of credibility and accountability at the apex bank. 

    Gwadabe said the Senate confirmation was timely as effective decisions could now be made.

    “They should hit the ground running to ensure that there is liquidity in the retail end of the forex market where volatility is pervasive. They should leverage on the BDCs as the most effective channel to reach the retail end of the forex market,” Gwadabe said.

    Obire said market participants would now feel certain they can now count on substantive appointees who are responsible for the governance of the CBN and for the development, deployment and monitoring of monetary policy.

    “We have had a fiscal policy team. Now we also have a monetary policy team. Some level of certainty would come into the market with the team’s confirmation by the Senate.

    “Both teams will hopefully coordinate and work together well to create an enabling environment for the productive sectors of the economy to thrive. The new CBN team has their work cut out for them,” Obire said.

     Chizea, one time contributor to CBN’s Quality Assurance Financial System Stability (FSS) 2020 project said the new team had “their works cut out for them”.

    “The challenge they are going to have is how they’re going to manage succession. Those who are not deep in this matters will think they’re coming to wave the magic wand and exchange rate will begin to appreciate, interest rates will begin to drop, it’s work in progress, it’s not going to be easy.

    “They have to sweat it out and put their house in order, do what they’re supposed to do, bring about productivity and so forth. There’s no magic wand you can waive anywhere to make the naira appreciate, none anywhere. The scenario is not looking very promising and that’s a fact,” Chizea said.

    Obadan said the new team would now have confidence to do their work and strive to perform to expectation of Nigerians.

    “It is good that they did the screening without delay. It should give the new management the inspiration to bring in the ideas which they have to try to resolve the knotty problems confronting the financial sector and the economy in general,” Obadan said.

    Idakolo said the new CBN Governor and his deputies are coming at a critical period in the life of the bank and that of the country.

    “After confirmation, the governor and his deputies are expected to hit the ground running by dismantling the cabal of forex speculators creating scarcity for illicit gains. The BDC operators need to be properly monitored as regards compliance and bad eggs amongst them sanctioned.

    “The commercial banks are also culpable of the precarious situation the naira finds itself against the dollar because of their deliberate efforts to profiteer from the scarcity of forex,” Idakolo said.

    Kurfi said the confirmation was a welcome development noting that the new CBN Governor has “a lot to do, first to cut inflation and to stop devaluation of naira among others”.

    Uwaleke said he was happy to note that, in addition to Cardoso’s primary mandate of maintaining monetary and price stability, the new CBN Governor recognized the need to work closely with the government to stimulate economic growth.

    According to him, such a move would, in the first instance, include a halt in the present policy tightening stance of the bank and having in place deliberate measures to engender a low interest rate environment that will facilitate access to capital for small and medium enterprises (SMEs).

    “On the vexed issue of forex management, his plan to clear backlog of forex would be a step in the right direction as it would go a long way in restoring confidence of investors in the Nigerian economy. I equally expect him to pay close attention to the supervision of Deposit Money Banks in particular as well as ensure compliance of corporate governance code by regulated financial institutions,” Uwaleke said.

  • Cardoso to unveil monetary, financial sector agenda

    Cardoso to unveil monetary, financial sector agenda

    Governor of the Central Bank of Nigeria (CBN) Olayemi Cardoso has given an insight into what the apex bank will do to manage the economy.

    He said plans are afoot to formally unveil his agenda for the monetary and financial sector in the days ahead.

    Addressing a group of investors in his office on Thursday, Cardoso said that the CBN will do all within its powers “to address identified distortions and ensure a conducive atmosphere for different categories of investors”.

    He noted that under his leadership, “the new management team at the Bank will do its best to tackle the impediments to liquidity in the foreign exchange market in Nigeria”.

    Read Also:How I will tackle inflation, naira, forex crises, by Cardoso

    Speaking specifically to the liquidity management, Cardoso said his team will devise a short-term goal that would address “structural issues within the financial system that gave rise to the liquidity challenge in the first instance”.

    To achieve this, he said the CBN would “focus on strengthening its data-gathering system to ensure that only verifiable data will be relied upon for evidence-based decisions”.

    According to him “the CBN would also adhere to rules that are known, acceptable and transparent for the conduct of monetary policy”.

    On the relationship between the monetary and fiscal authorities, the CBN Governor said there would continue to be consensus between both authorities to harmonise their positions on the interest rate and inflation. He, however, said the Bank would remain open to different views in its push for greater transparency.

  • How I will tackle inflation, naira, forex crises, by Cardoso

    How I will tackle inflation, naira, forex crises, by Cardoso

    • CBN governor: transparency, compliance to rules will be upheld

    From Sanni Onogu, Abuja

    Michael Olayemi Cardoso yesterday began his tenure as the 12th Central Bank of Nigeria (CBN) governor following his clearance for the position by the Senate.

    He promised to provide transparent and focused leadership with full adherence to the rules and return the apex bank to its core monetary policy responsibility.

    He also pledged to work in synergy with the fiscal authorities in the overall interest of the economy in the short and medium term.

    Cardoso, 66, a former chairman of Citi Bank, was Lagos State Commissioner for Budget and Economic Planning.

    He  spoke during his screening alongside the four deputy governors by the Senate. All of them were cleared.

    The deputy governors are:  Mrs. Emem Usoro, Mr. Muhammad Sani Abdullahi Dattijo, Mr. Philip Ikeazor and Dr. Bala M. Bello.

    The deputy governors also responded to some of the questions posed by senators, including Senate President Godswill Akpabio.

    All the nominees left the senators in no doubt about their capacity and capability.

    Cardoso said for 12 years, between 2010 and 2022 he had the privilege of serving as the chairman of Citi Bank where: “I dedicated myself to enhancing both the financial and non-financial operations of the institution.’’

    He told the Senate that the issue of exchange rate of the Naira to other currencies was worrisome.

    “For the type of economy that we want, we need to have an exchange rate that is stable and we must apply short and medium term measures to achieve this,’’ he said.

    Cardoso added that CBN’s new management team would evolve rules that were open and transparent and comprehensible by all players in the finance business.

    “We cannot expect serious foreign investors and portfolio investors who have an impact on the market to do so if we do not have a transparent system that everybody understands and can rely on,’’ he said.

    On inflation, he said: “There is the need to significantly revamp the infrastructure at the central bank with respect to data and to ensure that our data gathering capacity is significantly enhanced.

    “This is necessary so that we can make decisions based on stellar data. This is crucial in measuring inflation,’’ he stressed.

    He added that reliable studies showed that in the past 10 years to 15 years, at least 50 per cent of inflation resulted from money supply and deficit financing.

    Read Also: BREAKING: Senate confirms Cardoso, four others as CBN governor, deputies

    “This is a big problem; at least it certainly has been over a period of time and it is something we have to face frontally.

    “You have been hearing a lot of complaints. There are various measures to be taken and some of them are already being taken like the removal of fuel subsidy and fast-tracking the collection of taxes,” he said.

    Cardoso added: “In refocusing CBN to its core mandate, there is need to pull the CBN back from direct development, finance interventions into more limited advisory roles that support economic growth. These advisory roles would include, for instance, one, act as a catalyst in propagation of specialized institutions and financial products that support emerging sectors of the economy, facilitate new regulatory frameworks to unlock enormous capital, accelerate access to consumer credit, and expand financial inclusions to the masses.”

    He assured  the Senate that the CBN under his watch will not be hijacked or used by politicians.

    He said: “This is a position of great trust and with that it comes  with huge responsibility to meet up that trust …and my idea is to do what is right and how it is right. We have seen the effect of not doing what is right and we do not intend to go that route.

    “Secondly, on the issue of not obeying the hallowed chambers’ summons for conversation, frankly, I have absolute no doubt that that has got to be part of the engagements that I spoke about earlier.

    “Part of that is that the law specifies that such dialogue should take place twice in a year and as I said in resetting the Central Bank, we must ensure that we do not run foul of the law.

    “It goes back to the issue of culture of compliance. We are going to ensure we maintain a culture of compliance in the CBN. There will be zero tolerance for non-complying with orders and I can assure you that that tone would be fully set from the top.”

    He added: “What is important to us is the element of economic growth. Our feeling is that in identifying the important issues with economic growth, we believe very strongly that size matters.

    “The economic policy proposal of the administration has identified a set of fiscal reforms and growth patterns that   will achieve  $1trillion GDP within  eight  years.

    “In reviewing selected  growth targets that can achieve $1trn GDP, selected countries with large population and similar characteristics as Nigeria, it is interesting to  identify micro-economics indicies that points to Nigeria’s economic trajectory, being faithful to implementation of the proposed economic reforms.

    “In economies bigger than $1trillion, these indices include moderate inflation, sizeable foreign reserves and capacity to creating rebound from economic downturns.

    “In other words, to the extent that the administration has defined such a bold target for the country, it is our feeling that achieving this is very critical to achieve the stability that we require in various economic indices.

    “It is not the only thing, but it is very important. So we believe that this is the right way to go.

    He insisted that the immediate issues his team would address at the CBN include both Operational and Systems.

    He added: “It is what I will term uncorrelalational issues. We are aware that there are unsettled obligations by the CBN. Whether it is $4b, $5b or $7b I don’t know but definitely the immediate priority is to ascertain the extent.

    “We need to find a way to take care of that. It will be naive for us to be expecting to succeed if we are not able to handle that side of the foreign exchange market.

    According to him, the medium term measures in reviving the economy “have to do with balance of payments over a period of time like the sort of things that are being done already with respect to ensuring that we are getting more from petroleum resources with the removal of fuel subsidy and diversifying the economic base of the country.

    “That I believe will continue by the present administration and of course it will take time. I think we should take that as a medium term measure than the immediate.”

    Many financial experts rated  the appearance of the CBN governor and his deputies high, especially their pledge to return the apex bank to its core responsibilities.

  • Cardoso, new CBN team’s confirmation renews confidence, say experts

    Cardoso, new CBN team’s confirmation renews confidence, say experts

    Finance and economic experts said yesterday’s confirmation of Dr Olayemi Cardoso as the 12th substantive Governor of the Central Bank of Nigeria (CBN) has renewed confidence in the management of the apex bank and the general economic prospects.

    Cardoso and four deputy governors- Mrs. Emem Usoro, Mr. Muhammad Dattijo, Mr. Philip Ikeazor, and Dr. Bala Bello, were confirmed yesterday by the Senate, in line with extant laws. President Bola Tinubu had appointed the new CBN management on September 15, 2023.

    At the resumption of plenary yesterday, the Senate, at the Committee of Whole, considered, screened and subsequently confirmed the appointments of Cardoso and the four deputies.

    Experts said the Senate appearance of the new top management of the apex bank infused a sense of confidence and direction, while acknowledging the enormous tasks ahead of the new team.

    Experts who spoke yesterday included Managing Director, Arthur Steven Asset Management, Mr. Olatunde Amolegbe; Managing Director, Economic Associates, Mr Ayo Teriba; Managing Director, APT Securities and Funds, Mallam Kasimu Kurfi; President, Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe; PChief Executive Officer, BIC Consultancy Services, Dr. Boniface Chizea; Professor Mike Obadan of the University of Benin; President, Association of Capital Market Academics of Nigeria (ACMAN), Professor Uche Uwaleke; Managing Director, SD & D Capital Management Limited, Mr Gbolade Idakolo and Former Executive Director, Keystone Bank Limited, Mr. Richard Obire.

    Experts said the new CBN demonstrated a good grasp of the issues and confidence, which give hopes they may act with urgency to address key macroeconomic issues. They however cautioned that the tasks ahead were enormous and might take some time to restore a steady sense of balance.

    “Dr. Cardoso spoke with confidence and the required sense of urgency. My hope is that they will be backed by immediate and deliberate actions to quickly right the ship of the economy,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS), said.

    Read Also: BREAKING: Senate confirms Cardoso, four others as CBN governor, deputies

    He noted that Cardoso’s understanding of the importance of the issue of foreign exchange (forex) and increased transparency in all aspects of the affairs of the CBN infused confidence in the potential of the new management team.

    He however advised that the new team would need to preempt and mitigate the potential risks facing the banking sector in the medium term due to recent government policies.

    Teriba, who decried recent degradation of the apex bank, advised the new team to revisit some of the critical decisions taken by its predecessor including the sale of banks and restriction of forex access to some critical sectors of the economy.

    He said the new CBN team should hit the ground running and resolve serious governance issues, and lack of credibility and accountability at the apex bank.

    Kurfi said the confirmation was a welcome development noting that the new CBN Governor has “a lot to do, first to cut inflation and to stop devaluation of naira among others”.

    Uwaleke said he was happy to note that, in addition to Cardoso’s primary mandate of maintaining monetary and price stability, the new CBN Governor recognized the need to work closely with the government to stimulate economic growth.

    According to him, such a move would, in the first instance, include a halt in the present policy tightening stance of the bank and having in place deliberate measures to engender a low interest rate environment that will facilitate access to capital for small and medium enterprises (SMEs).

    “On the vexed issue of forex management, his plan to clear backlog of forex would be a step in the right direction as it would go a long way in restoring confidence of investors in the Nigerian economy. I equally expect him to pay close attention to the supervision of Deposit Money Banks in particular as well as ensure compliance of corporate governance code by regulated financial institutions,” Uwaleke said.

    Gwadabe said the Senate confirmation was timely as effective decisions could now be made.

    “They should hit the ground running to ensure that there is liquidity in the retail end of the forex market where volatility is pervasive. They should leverage on the BDCs as the most effective channel to reach the retail end of the forex market,” Gwadabe said.

    Obire said market participants would now feel certain they can now count on substantive appointees who are responsible for the governance of the CBN and for the development, deployment and monitoring of monetary policy.

    “We have had a fiscal policy team. Now we also have a monetary policy team. Some level of certainty would come into the market with the team’s confirmation by the Senate. Both teams will hopefully coordinate and work together well to create an enabling environment for the productive sectors of the economy to thrive. The new CBN team has their work cut out for them,” Obire said.

    Chizea, one time contributor to CBN’s Quality Assurance Financial System Stability (FSS) 2020 project said the new team had “their works cut out for them”.

    “The challenge they are going to have is how they’re going to manage succession. Those who are not deep in this matters will think they’re coming to wave the magic wand and exchange rate will begin to appreciate, interest rates will begin to drop, it’s work in progress, it’s not going to be easy.

    “They have to sweat it out and put their house in order, do what they’re supposed to do, bring about productivity and so forth. There’s no magic wand you can wave anywhere to make the aaira appreciate, none anywhere. The scenario is not looking very promising and that’s a fact,” Chizea said.

    Obadan said the new team would now have confidence to do their work and strive to perform to expectation of Nigerians.

    “It is good that they did the screening without delay. It should give the new management the inspiration to bring in the ideas which they have to try to resolve the knotty problems confronting the financial sector and the economy in general,” Obadan said.

    Idakolo said the new CBN Governor and his deputies are coming at a critical period in the life of the bank and that of the country.

    “After confirmation, the governor and his deputies are expected to hit the ground running by dismantling the cabal of forex speculators creating scarcity for illicit gains. The BDC operators need to be properly monitored as regards compliance and bad eggs amongst them sanctioned.

    “The commercial banks are also culpable of the precarious situation the naira finds itself against the dollar because of their deliberate efforts to profiteer from the scarcity of forex,” Idakolo said.

    Teriba said the previous CBN team left Monetary Policy Rate (MPR) at 18.75 per cent and Cash Reserve Ratio (CRR) at 32.5 per cent, which he described as an abnormal situation because neither of those two ratios have been this high.

    “There is no country in the world that tightens price and quantity at the same time. Either allow the banks to trade with their CRR cash or reduce benchmark interest rate,” Teriba said.

    The CRR is a portion of the banks’ deposits kept with the CBN for liquidity control, and was retained at 32.5 per cent during the July 2023 Monetary Policy Committee (MPC) meeting in Abuja.

    He said one of the ratios – either CRR or MPR should be reduced because the interest rates are already high at 18.75 per cent, hence, no need to restrict the deposit of banks.

    He said restricting banks’ funds through CRR will make it difficult for the lenders to give more loans to the economy and drive private enterprises.

    “The previous CBN team treated a lot of questionable sale and purchase transactions which should be revisited. The Bureaux De Change Operators should be allowed to trade in forex, and even the Fintechs to open up the forex space to all players,” Teriba said.

    He said the new CBN team has to deal with devaluation fallouts, and allow the 43 items restricted from accessing forex from the official market.

    According to him, everyone should have equally access to forex, unless the court stops such access.

    Obire added that as an institution, the CBN has generated significant trust deficit in recent years. They have to regain public trust.

    “The macro economic variables of interest rate, foreign exchange rate, and inflation are not friendly now. The market is looking for sustainable stability on foreign exchange rates, lower interest and inflation rates to support investments and productivity. The new team is expected to achieve a mix of positive outcomes in their management of these driving variables and measures to support the growth our economy needs to get more resources working to increase outputs and incomes,” Obire said.

    Obadan said he was optimistic that they have some ideas on how to tackle the issues at hand.

    “You will agree with me that the recent reform measures in the financial sector particularly relating to the foreign exchange market have resulted in some outcomes that were not really expected and so there are challenges that the new management will have to confront.

    “The issue of the foreign exchange market instability and gap between the official foreign exchange rate and the parallel market rate has widened but it is very likely that with the confirmation, the gap may narrow a bit, there might be revival of confidence but that is likely to be temporary because fundamental issues will need to be addressed,” Obadan said.

    Obadan, who is also a Board member of the CBN said there were challenges which the new management must try to address frontally, particularly the fundamental factors driving the trends that had been seen recently.

    “The trends in inflation, trends in exchange rate movement. They don’t require a cosmetic approach, they require something fundamental, thinking deeply and not measures that you take that will result in untoward consequences and then it brings confusion everywhere,” Obadan said.

    Idakolo added that the CBN needs to immediately create confidence in the market by offsetting the backlog of remittances to airlines and other long overdue forex obligations.

    “It needs to be in the forefront of implementation of the federal government policy on agriculture and loan facility to the manufacturing sector and SMEs so that it can boost the economy for productivity.

    “The crude oil price is moving towards $100 per barrel which means the country is expected to reap bountifully from increased crude oil production which can in turn increase our foreign reserves. The CBN needs to recover loan facilities given by the previous CBN management and channel it to proper use,” Idakolo said.

  • Cardoso: the man, the job

    Cardoso: the man, the job

    The Acting CBN Governor, Dr Olayemi Cardoso, comes to his new job with a rich pedigree. With certifications across the money and capital markets, he is a well-rounded professional with broad view of financial markets issues.

    A former chairman of Citibank Nigeria, he is a distinguished leader in the financial and development sectors with over 30 years’ experience in the private, public and not-for-profit organisations.

    He has also sat on the boards of Nigerian subsidiaries of Texaco and Chevron and chaired the board of EFInA, a financial sector development organisation supported by the Bill and Melinda Gates foundation.

    He was in government as Commissioner for Economic Planning and Budget for Lagos State, where he championed the financial reform, which led to the state’s development of independent tax revenue.

    As a consultant and policy expert, he advised and collaborated with major international development organisations including the World Bank, Ford Foundation, UN Habitat, World Health Organisation and the Swedish Development Foundation.

    Read Also: NANS’ Senate commends Tinubu for nomination of Cardoso, others

    He started his banking career with Citibank where he eventually rose to the position of Vice President leaving to co-found Citizens International Bank where he was an Executive Director for eight years.

    Cardoso studied managerial and administrative studies at the Aston University, where he obtained a Bachelor of Science (B.Sc.) degree. He is the recipient of several awards including an honorary Doctorate in Business Administration from Aston University, his alma mater, and the Global Distinguished Alumni Award from Citi.

    Cardoso obtained a Masters in Public Administration from Harvard Kennedy School where he was a Mason Fellow.