The Nation Newspaper

Tag: cbn

  • CBN’s orthodox approach to inflation, FX stability boosts foreign capital inflows

    CBN’s orthodox approach to inflation, FX stability boosts foreign capital inflows

    Nigeria’s economic landscape is experiencing a shift as the Central Bank of Nigeria (CBN) embraces orthodox monetary policies under Governor Olayemi Cardoso’s leadership. This strategic shift has sparked growing investor confidence, boosting foreign interest in Nigerian bonds and securities. With ambitious targets of single-digit inflation and a unified foreign exchange market, these policy measures are setting the stage for Nigeria’s economic resilience and attracting both local and international investments. Assistant Editor Nduka Chiejina reports

    Following the Central Bank of Nigeria’s (CBN) commitment to orthodox monetary policy, as articulated by Governor Olayemi Cardoso after the recent Monetary Policy Committee (MPC) meeting, investor confidence has surged. This has led to a notable increase in foreign investor interest in Nigerian government bonds and other securities.

    The Director General of the National Pension Commission (PenCom),  corroborated this trend, expressing strong confidence in the successful subscription of the Commission’s upcoming N758 billion bond issuance. Ms. Oloworaran dismissed concerns of undersubscription, citing prevailing favourable interest rates and the CBN’s stable monetary policy. “This is the best time for people to invest,” she asserted, “and I have no doubt that this bond will be fully subscribed, and even oversubscribed.”

    Director General of the National Pension Commission (PenCom), Ms. Oloworaran

    At the heart of Cardoso’s vision lies two ambitious targets: achieving single-digit inflation by the end of 2025 and fostering a unified, stable foreign exchange (FX) market. These goals, while seemingly straightforward, represent a monumental undertaking, a high-stakes gamble on the nation’s economic trajectory. Cardoso’s pronouncements were a strategic roadmap, a declaration of a paradigm shift in the CBN’s approach to economic management. For a nation grappling with persistent inflationary pressures, eroding purchasing power, and a volatile currency, these targets offer a glimmer of hope, a potential pathway to stability and growth. But can these targets be achieved? What are the underlying strategies, the potential pitfalls, and the broader implications for the Nigerian people?

    The backdrop to Cardoso’s vision is a landscape marked by economic turbulence. For years, Nigeria has wrestled with the twin demons of high inflation and exchange rate volatility. Inflation, a silent thief, has steadily eroded the value of earnings, pushing millions into poverty. The fluctuating exchange rates, meanwhile, have created uncertainty for businesses, stifled investment, and fuelled speculation. These challenges have been exacerbated by a confluence of factors, including global economic shocks, domestic policy missteps and structural weaknesses within the Nigerian economy.

    The CBN’s new approach, as articulated by Cardoso, signals a departure from past strategies. It suggests a move towards a more orthodox monetary policy, one that prioritises price stability and a market-driven exchange rate. This shift, while potentially painful in the short term, is intended to lay the foundation for long-term economic resilience. The success of this strategy, however, hinges on a delicate balancing act, requiring the CBN to navigate a complex web of economic and political pressures.

    The quest for single-digit inflation

    The Central Bank of Nigeria’s (CBN) bold declaration of aiming for single-digit inflation marks a crucial turn in the nation’s economic narrative, a target that transcends mere numbers and shows a fundamental shift in the CBN’s policy stance, a commitment to restoring price stability.  The backdrop to Governor Cardoso’s pronouncements is the recent rebasing of Nigeria’s Gross Domestic Product (GDP) and the subsequent adjustment of the Consumer Price Index (CPI). The National Bureau of Statistics (NBS) conducted this exercise, resulting in a revised inflation figure of 24.48 percent, significantly lower than previously declared 34.80 percent for December 2024. This rebasing is critical for ensuring accuracy and relevance in economic indicators, reflecting the current structure of the economy, and allowing for more precise analysis and policy formulation.

    While the revised inflation figure offers a more accurate picture, Cardoso rightly cautioned against misinterpreting it as a sign of immediate victory, emphasising that the rebasing exercise changes the benchmark, not the underlying inflationary pressures. As he stated, “With respect to the rebate CPI number, just for clarity, nobody should be afraid that inflation has fallen to that level. No, because you are really comparing apples and oranges. So, I think that should be very clear that this is still there still needs to get other figures going forward to be able to make the comparisons that you may be referring to.” The CBN’s emphasis on analysing more data before drawing comparisons points to the complexity of interpreting the rebased figures, thus showing the need for a finer understanding of the evolving economic landscape.

    Mr. Cardoso’s strategic approach centres on maintaining “orthodox monetary policies,” a term that signals a commitment to traditional central banking principles. This involves maintaining policy rates, as evidenced by the decision to hold the Monetary Policy Rate (MPR) at 27.50 per cent, along with other key parameters like the Cash Reserve Ratio (CRR) and Liquidity Ratio, demonstrating a commitment to tightening monetary policy to curb inflation. Cardoso’s emphasis on vigilance and staying the course underscores the CBN’s recognition of the persistent nature of inflationary pressures, with a commitment to consistent policy implementation crucial for building credibility and anchoring inflation expectations.

    Read Also: N1.15tr FAAC allocation to drive T-Bills demand

    As Cardoso noted, “We will continue with the orthodox monetary policies that we have embarked upon. We have seen the outcome, and it’s in a positive direction. And we will stay that course. We will certainly stay that course. We will be vigilant. We will not take anything for granted. We believe that inflation has been too high for too long. It has been too high for too long. So our objectives in the medium to long term is to ensure that we’re able to bring this down from the double digit to the single digit.” The target of single-digit inflation is framed as a medium-to-long-term objective, acknowledging that achieving price stability is a gradual process requiring sustained effort.

    However, Nigeria’s inflation is driven by a complex interplay of factors, including supply-side constraints, infrastructure deficits, and fiscal pressures, demanding a coordinated approach involving both monetary and fiscal policies. The Nigerian economy is vulnerable to external shocks, such as fluctuations in global commodity prices and changes in international financial conditions, which can disrupt the CBN’s efforts to control inflation. The success of the CBN’s monetary policy hinges on effective coordination with fiscal policy, as fiscal discipline and prudent government spending are essential for reducing inflationary pressures. While Cardoso highlights the recent stability and appreciation of the foreign exchange rate as a positive factor in controlling inflation, maintaining exchange rate stability requires addressing the underlying imbalances in the FX market. Managing public expectations and building confidence in the CBN’s policies are crucial for anchoring inflation expectations, requiring clear communication and transparency to foster public trust. Furthermore, the lingering effects of past policies, particularly the substantial ways and means financing utilised by the government, will continue to exert influence on inflation.

    The decision to maintain key monetary policy parameters after the first MPC meeting of 2025 sends a clear signal of the CBN’s commitment to its inflation targets, reflecting the MPC’s assessment of current economic conditions and its determination to prioritize price stability. Achieving single-digit inflation by the end of 2025 is an ambitious but achievable goal. The CBN’s commitment to orthodox monetary policies, coupled with a focus on addressing structural issues and maintaining fiscal discipline, provides a solid foundation.

    However, the path ahead will be fraught with challenges, and the CBN will need to remain vigilant and adaptable to navigate the evolving economic landscape. The rebasing of the CPI provides a more accurate picture of Nigeria’s inflation, but it does not diminish the need for sustained efforts to control price pressures. Cardoso’s commitment to orthodox monetary policies signals a shift towards a more traditional approach to central banking. Achieving single-digit inflation requires addressing structural issues, coordinating fiscal and monetary policies, and managing public expectations. The MPC decision to hold rates shows the CBN’s resolve to do so.

    Fiscal levers and the fight against inflation

    To further understand the efforts that will go into achieving a single digit inflation by year’s end, we have to shift our focus from the CBN’s monetary policy to the fiscal strategies embedded within the Federal Government 2025 budget. According to a source at the Budget Office, four key measures are designed to complement the CBN’s efforts and drive inflation down to initially 15 per cent as predicted by President Bola Ahmed Tinubu and now to less than 10 percent as projected by the CBN. These measures highlight the crucial role of fiscal policy in supporting monetary stability and underscore the necessity of a coordinated approach to tackling Nigeria’s inflationary challenges.

    The cornerstone of the FGN’s strategy is the prioritisation of enhanced security measures across the country. The rationale behind this is clear: improved security is expected to facilitate a “bumper harvest” by enabling farmers to safely cultivate and transport their produce. This is a critical step in addressing the supply-side constraints that have long plagued Nigeria’s agricultural sector. As the source rightly pointed out, “the food segment has a significant influence on the overall inflation rate.” By increasing domestic agricultural output, the government aims to reduce the nation’s reliance on costly food imports, thereby driving down food prices. The fact that the CBN has “long advocated for this approach” highlights the alignment between monetary and fiscal authorities on the importance of agricultural security. This suggests a recognition that tackling inflation requires addressing structural issues beyond monetary policy adjustments. It is important to consider that security is only one part of the equation. Infrastructure improvements that allow for the easy transportation of goods will also be needed.

    The second key measure involves leveraging increased local refining capacity to tackle inflation. The anticipated commencement of domestic production of refined petroleum products is expected to have a dual impact. By reducing the need to import refined petroleum products, the government aims to alleviate pressure on the foreign exchange (forex) market. This is crucial for stabilising the naira, which has been a major driver of inflation. The source further noted that “beyond saving forex, the export of surplus refined products will boost foreign exchange earnings, further stabilising the naira.” This points to the potential for the petroleum sector to contribute to forex stability, which is essential for controlling inflation. Domestic refining also has the potential to reduce transportation costs, which are a significant component of the overall price of goods and services.

    The success of these fiscal measures hinges on effective coordination and implementation. The government must ensure that security measures are effectively deployed, and that the necessary infrastructure is in place to support agricultural productivity and domestic refining. The target of reducing inflation to less than 10 percent by 2025 is ambitious. Achieving this target will require sustained effort and a proactive approach to addressing potential challenges.

    While these measures are promising, it is important to emphasise the need for broader economic diversification. Relying solely on agriculture and petroleum may leave the economy vulnerable to external shocks. Alongside these measures, maintaining fiscal discipline is crucial. Prudent government spending and revenue generation are essential for supporting the CBN’s monetary policy efforts. If global oil prices increase, this will have an inflationary effect on the economy, even if more oil is refined locally. Security issues are ongoing and complex. There is no guarantee that they will be solved by 2025.

    FX maze: Convergence, stability and the quest for investor confidence

    The CBN’s approach to managing the foreign exchange (FX) market, focusing on the critical goals of achieving convergence between exchange rates and stabilising the naira reflects Cardoso’s responses and the MPC’s observations both which reveal a strategy that prioritises stability as a foundation for attracting investment and fostering economic growth. Foreign exchange (FX) convergence and the stability of the naira are key parts of the CBN’s plan to control inflation while supporting economic growth. When asked how the FX market intends to balance these goals, especially with high borrowing costs and limited access to credit, Governor Cardoso explained that the CBN’s current approach is starting to show positive results.

    Cardoso declared that the “measures we have taken so far in terms of orthodox monetary policies…have begun to yield fruit.” This reinforces the CBN’s commitment to traditional central banking principles as a means of restoring confidence and stability. He pointed out that Nigeria’s foreign exchange reserves have been growing steadily, reaching their highest level in three years at one point. “We can see that accretion to reserves has been consistent, and at one point in time, may I remind everybody, that we achieved the highest level of reserves in the past three years,” Cardoso noted.

    This increase in reserves is crucial because it strengthens the CBN’s ability to support the naira and maintain stability in the foreign exchange market. At the same time, inflation is beginning to slow down, and investor confidence, which had declined in recent years, is gradually returning. Cardoso stressed that stability is essential because “if investors do not see stability, they do not come to those markets.” As stability improves, the CBN will be able to adjust interest rates to encourage more economic activity.

    Cardoso also stated that the naira has become more competitive in the international market, making Nigeria more attractive to foreign investors. “As of now, our currency is a lot more competitive, and with that competitiveness, we’ve seen increasing interest from international investors who want to come and invest in the country’s future,” he explained. This renewed interest from international investors is expected to boost the economy and create more growth opportunities.

    The Monetary Policy Committee (MPC) stressed the benefits of recent improvements in Nigeria’s external sector, particularly the narrowing gap between the official exchange rate in the Nigeria Foreign Exchange Market (NFEM) and rates in the Bureau de Change (BDC) market. This convergence of rates is a sign that the market is becoming more stable and predictable. The Committee urged the CBN to continue increasing liquidity in the FX market to support this trend. To enhance transparency and credibility in the foreign exchange market, the CBN has introduced measures such as the Electronic Foreign Exchange Matching System (B-Match) and the Nigeria Foreign Exchange Code. These tools are designed to improve the efficiency and fairness of foreign exchange transactions, which in turn boosts investor confidence. The MPC expects that as a result of these policy measures, Nigeria will see an increase in foreign direct investment (FDI), portfolio investments and remittances from Nigerians living abroad. This influx of foreign currency will further strengthen the naira and support long-term economic growth.

    External reserves and balance of payments as shields

    The robust state of Nigeria’s external reserves and the favourable balance of payments position provide a crucial perspective on the nation’s economic resilience. These indicators are vital for assessing the country’s ability to withstand external shocks, manage its exchange rate, and maintain investor confidence. The external reserves, standing at US$39.4 billion as of February 14, 2025, represent a significant buffer against potential economic vulnerabilities. The key takeaway from this figure is its translation into an “import cover of 9.6 months for goods and services.” Import cover is a critical metric that indicates the number of months a country can finance its imports using its existing reserves. A 9.6-month cover is considered robust and signifies a strong capacity to meet import obligations. This level of reserves provides a cushion against fluctuations in global trade and potential disruptions in foreign exchange inflows. A high import cover also lends credibility to the nation’s currency. If a nation has a great deal of reserves, it can use those reserves to defend the currency.

    Adequate reserves are essential for maintaining exchange rate stability. They provide the CBN with the firepower to intervene in the foreign exchange market, manage volatility, and defend the naira against speculative attacks. A large amount of external reserves can help the CBN to control inflation, by allowing for the importation of goods, if there are supply shortages within the country and strong reserves enhance investor confidence by demonstrating the country’s ability to meet its external obligations. This is particularly important for attracting foreign direct investment (FDI) and portfolio investments. The accumulation of reserves is closely linked to the CBN’s orthodox monetary policies, which have helped attract foreign investors and boost foreign exchange inflows. Governor Cardoso had earlier noted that accretion to reserves has been consistent, signaling that Nigeria is on the right path.

    The positive current account balance of US$6.06 billion as of the end of the third quarter of 2024 is another positive indicator of Nigeria’s external economic health. The current account balance reflects the net flow of goods, services, income and current transfers between a country and the rest of the world. A positive balance indicates that Nigeria is earning more foreign exchange than it is spending on these transactions.

    This positive balance could be attributed to several factors, including increased exports, particularly in the oil sector, as well as improvements in non-oil exports. It could also reflect a reduction in imports due to domestic production increases or import substitution policies. A positive current account balance strengthens the country’s external financial position, reduces its reliance on foreign borrowing, and supports exchange rate stability. A positive current account balance is a sign of a healthy economy, and it allows the government to invest in infrastructure and other projects.

    While the level of reserves is robust, it is essential to consider the composition of those reserves. Diversifying the currency composition of reserves can mitigate risks associated with fluctuations in individual currencies. The sustainability of the positive current account balance depends on the long-term trends in exports and imports. Efforts to diversify the export base and promote non-oil exports are crucial for maintaining a healthy current account. Nigeria’s external reserves and balance of payments are influenced by global economic conditions, including fluctuations in commodity prices, particularly oil prices. Monitoring these conditions and adapting policies accordingly is essential. While the current numbers are very good, the government must continue to work toward long term growth, and not rely solely on current numbers.

    The improvement in Nigeria’s balance of payments reflects the combined impact of monetary and fiscal policies aimed at achieving macroeconomic stability. The Monetary Policy Committee (MPC) has highlighted the importance of sustaining these gains by continuing to implement measures that promote exchange rate stability, reduce inflation, and attract foreign investment. As foreign direct investment (FDI) and portfolio investments increase, they contribute additional foreign exchange inflows, further strengthening the external reserves.

    Overall, the robust external reserves and positive current account balance are clear indicators that Nigeria’s economy is on a path toward greater stability and resilience. These achievements, supported by the CBN’s monetary policies and the government’s economic reforms, are expected to create a more favourable environment for businesses, attract more foreign investment, and drive sustainable growth in the years ahead.

  • CBN reaffirms commitment to regulatory oversight

    CBN reaffirms commitment to regulatory oversight

    The Central Bank of Nigeria (CBN) has reaffirmed its commitment to maintaining a transparent and resilient financial system by reinforcing regulatory compliance and risk management across Nigerian financial institutions.

    Speaking at a high-level Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop held in collaboration with Citi, in Lagos, Special Adviser to the CBN Governor on Compliance, Ms. Shola Phillips, emphasised the need for strict adherence to global banking standards to sustain confidence in Nigeria’s financial sector.

    “Regulators expect financial institutions to maintain dynamic, risk-based AML/CFT programmes that are responsive to the evolving financial environment. Proactive engagement with regulatory developments and the integration of innovative compliance solutions are essential for institutions to meet these expectations effectively,” Phillips stated.

    The training, attended by compliance officers, trade operations specialists, and correspondent banking teams from various financial institutions, provided critical insights into global regulatory trends, emerging financial risks, and strategies for sustaining correspondent banking relationships.

    Read Also: Wema Bank customers win big in 80th daily draw 5 for 5 promo Season 4

    Managing Director of Citi’s Correspondent Banking Group, Siobhan Ni Ealaithe, highlighted the critical role of robust governance frameworks in mitigating risks. She underscored the necessity of Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) protocols in preventing illicit financial activities.

    Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, provided a stark assessment of financial crime risks, noting that over $3 trillion in illicit funds flow through the global financial system annually. She urged financial institutions to strengthen due diligence measures, leverage technology-driven risk assessments, and uphold transparency in all transactions.

    The workshop aligns with CBN Governor Olayemi Cardoso’s vision to uphold regulatory excellence and strengthen Nigeria’s financial system. As Governor Cardoso has consistently emphasised, “A strong financial system is built on trust, and trust is earned through integrity and compliance. The CBN will continue to set high regulatory standards to protect Nigeria’s financial ecosystem and ensure its alignment with global best practices.”

    By fostering a strong culture of compliance and strengthening risk management frameworks, the CBN aims to safeguard Nigeria’s financial sector while ensuring its resilience and credibility locally and globally.

  • CBN orders banks to follow global standards to combat illicit $3 Trillion funds flow 

    CBN orders banks to follow global standards to combat illicit $3 Trillion funds flow 

    The Central Bank of Nigeria (CBN) has directed financial institutions nationwide to strictly comply with global banking standards to help curb the movement of $3 trillion in illicit funds worldwide.

    The apex bank stated that adherence to this directive would bolster confidence in Nigeria’s financial sector and enhance its stability. 

    It reaffirmed its commitment to fostering a transparent and resilient financial system through stringent regulatory compliance and risk management measures.

    In a statement released on Sunday, the CBN revealed that Ms. Shola Phillips, Special Adviser to the CBN Governor on Compliance, delivered this message at a high-level Mandatory Compliance and Anti-Money Laundering (AML) Training Workshop over the weekend.

    Phillips emphasized the need for financial institutions to proactively adapt to evolving regulatory requirements to maintain integrity and prevent financial crimes.

    “Regulators expect financial institutions to maintain dynamic, risk-based AML/CFT programmes that are responsive to the evolving financial environment. Proactive engagement with regulatory developments and the integration of innovative compliance solutions are essential for institutions to meet these expectations effectively,” she stated.

    The training brought together compliance officers, trade operations specialists, and correspondent banking teams from various financial institutions. It provided critical insights into global regulatory trends, emerging financial risks, and strategies for maintaining correspondent banking relationships, which are crucial for international transactions.

    Read Also: UPDATED: Supreme Court restrains CBN, AG-F from further releasing funds to Rivers govt

    Speaking at the workshop, Siobhan Ni Ealaithe, Managing Director of Citi’s Correspondent Banking Group, stressed the importance of strong governance frameworks in reducing financial risks. She highlighted the role of Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) protocols in preventing illicit financial activities.

    Stephanie Bailey, Head of EMEA AML Risk Management for Foreign Correspondent Banking, revealed that over $3 trillion in illicit funds circulate through the global financial system annually. She urged financial institutions to strengthen their due diligence measures, use technology-driven risk assessments, and maintain transparency in all transactions to combat financial crime.

    According to the CBN, the workshop aligns with Governor Olayemi Cardoso’s vision of strengthening Nigeria’s financial system through regulatory excellence. Governor Cardoso has consistently stressed the importance of trust and integrity in building a robust financial sector. 

    “A strong financial system is built on trust, and trust is earned through integrity and compliance. The CBN will continue to set high regulatory standards to protect Nigeria’s financial ecosystem and ensure its alignment with global best practices,” he stated.

  • Customs, CBN strengthen partnership for tech-driven trade, revenue reforms

    Customs, CBN strengthen partnership for tech-driven trade, revenue reforms

    …as NCS expands B’Odogwu nationwide

    The Nigeria Customs Service (NCS) and the Central Bank of Nigeria (CBN) are deepening their collaboration to enhance trade facilitation and revenue generation through technology-driven reforms.

    As part of this effort, the NCS is set to roll out its indigenous B’Odogwu trade facilitation system across various commands nationwide, replacing the Nigerian Integrated Customs Information System (NICIS) II.

    During a courtesy visit to the CBN on Thursday, February 27, 2025, Comptroller-General of Customs, Adewale Adeniyi, met with the apex bank’s governor, Olayemi Cardoso, to discuss the seamless integration of financial institutions into the new platform.

    “The initiative is expected to modernise Customs operations, improve efficiency in trade documentation, and enhance revenue collection,” Adeniyi stated.  

    He emphasised the need for stronger collaboration between Customs and financial institutions, particularly in automating foreign exchange transactions and trade-related payments. 

    Read Also: Troops kill 217 terrorists, arrest 122 oil thieves in February

    The B’Odogwu system, introduced after the expiration of a previous service provider’s contract, is expected to drive efficiency and transparency in Nigeria’s trade processes.  

    “We began piloting the B’Odogwu programme at the Port and Terminal Multi-services Limited (PTML) Area Command in Lagos and engaged all stakeholders, including the Central Bank. Three months into the pilot phase, we integrated key trade documentation processes such as Form M and Pre-Arrival Assessment Report (PAAR) but encountered initial challenges, particularly resistance from some of the Authorised Dealer Banks (ADBs),” Adeniyi noted.  

    He urged the CBN to grant the necessary approvals for banks to integrate into the system, which would enable seamless transactions and improve the ease of doing business.  

    Adeniyi also highlighted inefficiencies in the manual transmission of prevailing exchange rates from the CBN to Customs for duty collection, calling for an automated approach to enhance accuracy and timeliness. 

    While appreciating the apex bank’s support, he stressed the importance of continued collaboration to ensure the smooth nationwide deployment of B’Odogwu.  

    Responding to the Customs boss, Cardoso commended the NCS for its commitment to innovation and assured the CBN’s backing in implementing the initiative successfully.  

    “I am pleased to see a new direction in Customs operations. Collaboration is key, and we will continue to work closely to ensure seamless integration. Our commitment is to provide the necessary support so that the banking sector aligns with this transition,” Cardoso said.  

    He further pledged that the CBN would ensure commercial banks comply with directives aimed at improving trade processes and enhancing revenue collection efficiency.  

    With the pilot phase in Lagos providing valuable insights, the NCS is now set to activate the B’Odogwu system across multiple commands nationwide. 

    The expansion is expected to streamline trade operations, reduce delays, and improve transparency in the nation’s import and export processes.

  • N30trn Ways and Means: Senate panel accuses CBN of frustrating probe

    N30trn Ways and Means: Senate panel accuses CBN of frustrating probe

    The Senate Ad-hoc Committee investigating the N30trillion Ways and Means facility granted to the Federal Government between 2015 to 2023 on Tuesday accused the Central Bank of Nigeria(CBN) of frustrating its efforts to uncover how the monies  were spent.

    Speaking after receiving an interim report from its consultants at a meeting in the Senate, Chairman of the Adhoc Committee, Senator Isah Jibrin said the CBN has refused to make relevant documents available to the consultants to enable them complete their assignment.

    The CBN’s Director of Banking Services Mallam Hamisu Abdullahi, who represented Governor Yemi Cardoso denied the claim.

    Abdullahi said the apex bank provided all the documents requested, but the chairman of the panel refuted the claim.

    “None of the documents was submitted to us”, Jibrin said m, adding that “as is, we will not allow you to attend the next meeting because you have been coming here for the same reason.

    “The least person that will attend the next meeting should be a deputy governor of CBN,” Bala.

    Speaking further, Senator Jibrin said: “What you are telling us is not the truth. We have not received the documents. I don’t want to deceive the public here.”

    The Kogi East senator said the aim of the assignment entrusted to the committee by the Senate President which is for them to come up with a report within the shortest possible time was being frustrated by CBN’s action.

    “The information we have here is not different from what we have had all along. What we did was to hand over the documents to the consultants, and when the consultants made available to us this interim report, our intention was to hold onto the interim report till the final report.

    Read Also: CBN, MPC’s sustained fight against inflation yields positive results

    “But we’ve been compelled to make available this interim report to the general public so that we let them know where the problem is, and the problem is that the Central Bank of Nigeria has denied us consistently the documents that we need to complete this assignment. That is the truth.

    “I was at the CBN sometimes, I met Bala the deputy governor. And they promised but nothing came out of it. The Clerk to this committee has been there several times, nothing has come out of it.

    “The consultants themselves even took it upon themselves to go to CBN directly, because we introduced them to CBN and nothing has come out of it.

    “So let the Nigerian public know that this assignment has been hindered by the Central Bank of Nigeria.

    “After this, you must avail us, or avail the consultants, all the documents that they require to complete this assignment.

    “The reason for this meeting is to let everybody know why we have not been able to finish this assignment because it looks as if we have compromised.

    “The answer is that we have not. It looks like we have compromised. I just want to say that we are not going to sleep. This is a major assignment that God has for everybody. We want to know how these monies were utilized. Okay? We want to know how these monies were utilized.

    “Preliminary reports show that there are major infractions, especially on the part of the Central Bank of Nigeria. We want them to defend that. We need all the documents without exception. Whatever documents the consultants need to ensure that this job is completed efficiently and as soon as possible, you must provide.

    “As it is, we don’t have a choice but to give them a time within which they must provide all the documents to the consultants.

    You just have to make sure that the documents are sent to the consultants.”

    In his response, Abdullahi said: “We provided a schedule showing summary of Ways and Means taken direct and indirectly.

    “That folder was sent to an email provided by this committee. There was an email provided, we sent, we replied that email three times.

    “We can resend that document as we speak here. So we have responded, we are not aware of any document requested that we have not provided.

    “If there is any document that is requested and that we have not provided, let us know. All the documents required are in that folder. So after the consultant reviews what is in that folder, if he needs additional documents, our expectation is that he should say one, two, three documents are not there to provide. We have provided it separately and we can provide that again.”

  • Financial inclusion vital to national economy, says CBN

    Financial inclusion vital to national economy, says CBN

    Deputy Governor, Financial Systems Stability at the Central Bank of Nigeria, Mr. Philip Ikeazor, has highlighted financial inclusion’s vital role in national development.

    He spoke during the Enhancing Financial Inclusion and Advancement (EFInA), unveiling of its refreshed brand identity, new five-year corporate strategy, and the introduction of its new Chief Executive Officer, Foyinsolami Akinjayeju.

    According to Ikeazor, beyond data and funding, EFInA has facilitated market development and championed the conversations that have shaped financial inclusion policies. As we witness EFInA’s rebranding, we see a renewed commitment—not just to expanding access, but to ensuring that access translates into meaningful financial empowerment.”

    Under the theme “Beyond Financial Inclusion: A New Chapter Unfolds for EFInA,” the event brought together key stakeholders from across the financial, government, development, and private sectors. Opening with an inspiring and contextual welcome remark by the EFInA Board Chair – Dr. Tokunbo Agnes Martins, and continuing with engaging multimedia presentations, goodwill messages, and thought-provoking remarks from global and government leaders, EFInA’s mission to drive economic empowerment and sustainable growth for all Nigerians was reinforced.

    Speaking at the event, Foyinsolami Akinjayeju, EFInA’s new CEO, stated: “EFInA is evolving to ensure that financial advancement goes beyond inclusion—our work is about creating real, measurable impact in the lives of the excluded and underserved, ensuring that financial services become a foundation for resilience, opportunity, and progress for every individual.”

    EFInA’s new brand identity reveal was a symbolic moment of transformation; with the refreshed visual identity and integrated brand architecture reflecting EFInA’s position as a dynamic leader, combining research, advocacy, systems-strengthening, and innovation to deliver impactful financial solutions for real people by leveraging its targeted platforms – Access to Financial Services (A2F) Surveys, Gender Centre of Excellence (GCE) and Inclusion for All (I4ALL).

    Read Also: BOI partners NACCIMA to boost small business industrial growth

    The immersive event also featured a fireside chat with HH. Khalifa Muhammad Sanusi II CON anchored by EFInA Board Director – Mrs. Saude Amina Atoyebi. The illuminating conversation with the Emir reinforced the need for innovative partnerships to drive inclusive economic growth.

    Also present at the event were other EFInA board directors – Professor Janice Olawoye, Mr. Kola Aina, including Mr. Olu Akanmu who brought the event to a formal close with a charge for more collaboration. Jason Lamb, Deputy Director of Inclusive Financial Systems, Country Engagements at the Gates Foundation, shared insights on the critical role of financial inclusion in Nigeria’s economic development and perspectives on the catalytic role EFInA must continue to play.

    HE. Sen. Kashim Shettima, Vice President, Federal Republic of Nigeria represented by Dr. Nurudeen Zauro, Technical Adviser to the President of Financial Inclusion and Economic Empowerment, reinforced the nation’s alignment with EFInA’s mission: “As we celebrate EFInA’s incredible work, we also recognise that it continues to evolve and adapt to Nigeria’s financial inclusion goals. This strategic realignment perfectly aligns with the current economic and financial reforms under this administration.”

    EFInA’s five-year strategy emphasizes deeper partnerships, innovative solutions, and measurable outcomes, focusing on reaching underserved and excluded communities, especially women and rural populations. As EFInA looks to the future, it remains steadfast in its mission to empower Nigerians by enabling access to transformative financial tools and solutions.

    “Our refreshed brand identity and strategy are a call to action—to governments, private sector leaders, development partners, and communities—to work with EFInA in unlocking the future for all Nigerians. Together, we can build a resilient, inclusive, and thriving economy,” said Foyinsolami Akinjayeju.

    EFInA invites stakeholders to collaborate in driving financial inclusion and economic empowerment across Nigeria.

  • CBN, MPC’s sustained fight against inflation yields positive results

    CBN, MPC’s sustained fight against inflation yields positive results

    Inflation in Nigeria is expected to continue its downward trajectory in 2025 as the impact of the Central Bank of Nigeria (CBN) reforms continue to drive growth and economic development. Already, Nigeria’s annual inflation rate dropped to 24.48 percent in January, reflecting the positive outcomes of several policy measures implemented by the CBN-led Monetary Policy Committee (MPC). For instance, the MPC decided to pause its policy rate tightening cycle during the first meeting of the year, marking the first pause since May 2022. This decision is part of the CBN’s broader policy strategy to maintain a positive inflation outlook and sustain the naira’s rally across markets, reports Assistant Editor, Collins Nweze.

    The Nigerian economy is well-positioned to achieve price stability within the year, supported by the stabilisation of exchange rates, the normalisation of energy prices following subsidy removal, and improved liquidity in the forex market. In its 2025 macroeconomic outlook, Comercio Partners highlighted that the rebasing of Nigeria’s Consumer Price Index (CPI) to 2024 would introduce statistical effects that could result in a decrease in inflation figures.

    Additionally, Comercio Partners underscored the importance of expanding local refining capacity, particularly with the launch of the Dangote Refinery. This development is expected to mitigate the impact of exchange rate fluctuations on energy prices. By increasing reliance on domestically refined petroleum, Nigeria is likely to experience reduced energy price volatility.

    This, coupled with a more stable exchange rate, is expected to reduce production and transportation costs, triggering a positive ripple effect across the broader economy. According to Ifeanyi Ubah, Head of Investment Research and Global Macro Strategist, remarked, “We expect headline inflation will decrease to around 15 percent in the first half of 2025, indicating a gradual return to economic stability.”

    The report also highlighted the critical need for expanding local refining capacity, especially with the upcoming launch of the Dangote Refinery. This development is expected to lessen the impact of exchange rate fluctuations on energy prices. With increased reliance on domestically refined petroleum, Nigeria is likely to experience a reduction in energy price volatility. Combined with a more stable exchange rate, this is expected to lower production and transportation costs, triggering a positive ripple effect throughout the broader economy.

    MPC steps in

    The need to tame inflation and sustain exchange rate stability were key factors influencing the Monetary Policy Committee’s (MPC) decision to keep rates unchanged at its 299th meeting held last week in Abuja. As a result, the Committee voted to maintain the Monetary Policy Rate (MPR) at 27.50 percent and kept all other parameters unchanged. This includes the Cash Reserve Requirement (CRR) for Deposit Money Banks (DMBs) and Merchant Banks at 50 percent and 16 percent, respectively; the asymmetric corridor around the MPR at +500bps/-100bps; and the liquidity ratio at 30 percent.

    According to the National Bureau of Statistics (NBS), Nigeria’s annual inflation rate stood at 24.48 percent in January, reflecting a notable decline from the previous month’s figure. This decrease followed the first rebasing of Nigeria’s Consumer Price Index (CPI) in more than a decade.

    CBN Governor Olayemi Cardoso said the apex bank is now more than ever, consolidating market gains and ensuring sustained improvement is crucial. “We will enhance collaboration with the fiscal sector by increasing the depth and regularity of our interactions to drive economic growth. With stabilising forex rates, strengthened price controls, and rising investor confidence, the economy shows strong signs of resilience and recovery,” he said.

    Cardoso explained that ⁠following positive developments in the FX market, the CBN’s focus on boosting liquidity and maintaining transparency in forex operations is sacrosanct. “Our Objectives have been and will continue to be, to achieve stability in the Foreign Exchange and the Financial markets. CBN will continue to embrace orthodoxy and stay the course. We remain vigilant and will not take anything for granted, inflation has been too high for too long, and our goal is to bring it down from double digits to single digits in the medium to long term,” he said.

    On February 20, the naira strengthened by 6.95 per cent to N1,510/$ in the parallel market, driven by positive exchange rate expectations, subdued forex demand, and continued intervention by the Central Bank of Nigeria (CBN). Businesses, particularly those in the real sector, welcomed the MPC’s decision to hold rates, viewing it as a step toward sustaining the naira’s rally and alleviating the rising cost of borrowing. These decisions were based on the Committee’s expectation of robust GDP growth in the medium term, fueled by strong contributions from the non-oil sector. Furthermore, the MPC highlighted the sustained rise in domestic crude oil production (1.74 mb/d) and anticipates an improved contribution from the oil sector, further bolstering overall GDP growth.

    The MPC acknowledged the recent rebasing of the Consumer Price Index (CPI) and the adjustments made to the weights of items in the CPI basket, noting that the new methodology more accurately reflects current consumption patterns. The Committee also anticipates a moderation in inflationary pressures in the near term, supported by a relatively stable naira and a gradual easing of PMS prices.

    Furthermore, the MPC highlighted the recent appreciation of the naira, which has been buoyed by improved forex liquidity. The Committee also recognised the CBN’s ongoing efforts to promote transparency and credibility in the foreign exchange market. These efforts include the implementation of the Electronic Foreign Exchange System (EFEMS) and the Nigerian Foreign Exchange Market (NFEM) FX Code.

    The Committee anticipates that sustained policy initiatives will bolster Foreign Direct and Portfolio investments, as investor confidence continues to rise. Additionally, the MPC emphasized that increased domestic crude oil production is expected to improve the current account balance and support the growth of FX reserves. On the global front, the Committee noted that while the Russia-Ukraine war and ongoing Middle Eastern conflicts pose downside risks to global GDP, potential resolutions could emerge through policy actions by the new US administration. The Committee also identified the risk of a possible global trade war triggered by US tariff hikes, which could heighten inflationary pressures and dampen global growth. Despite these risks, the MPC highlighted that the International Monetary Fund (IMF) has maintained its global GDP growth forecast at 3.3 percent for both 2025 and 2026.

    Looking ahead, analysts at Cordros Securities expect future MPC decisions to be largely driven by developments in the foreign exchange market and the trajectory of inflation. They noted, “While a potential rate cut could be considered at the May policy meeting, we anticipate a gradual approach aimed at balancing exchange rate stability with the expected disinflationary process,” as stated in their emailed notes to investors.

    Analysts also observed that, ahead of the MPC meeting, market participants had already started repricing yields downward, despite the tight liquidity conditions in the financial system. The Managing Director of Financial Derivatives Company Limited, Bismarck Rewane, stated that the global and domestic economic landscape is rapidly evolving, and Nigeria’s policymakers are navigating treacherous waters. He emphasized that balancing risks is a delicate task—tighten too much, and growth could be stifled; ease too soon, and inflation could spiral out of control.

    “In its first meeting in 2025, held on February 19-20, the Monetary Policy Committee (MPC) finally hit the pause button on interest rate hikes after 12 months of an aggressive tightening campaign. The restrictive stance saw the policy rate peak at 27.5 per cent per annum, pushing maximum lending rates above 30 per cent per annum. Markets perceive this move as the beginning of a more accommodating stance as the yield curve inverted, especially at the short end following the rate decision,” he said.

    The decline in the inflation rate, largely driven by the rebasing of the Consumer Price Index (CPI), indicated that the MPC’s decision to hold rates was in line with expectations, although further moderation in yields remains possible. Commenting on the MPC’s decision, Charles Abuede, the Head of Research at Cowry Asset Management Limited, noted that the MPC is proceeding cautiously. He added that market expectations were for the MPC to increase the MPR by 25 basis points to align with broader market sentiments, driven by the need to address rising inflation, which has become entrenched in the economy.

    “The committee should remain focused on maintaining price stability, especially as inflationary pressures persist despite previous rate hikes.” Abuede said a lower inflation print is prompting the MPC to prioritise economic growth over further tightening, particularly as other macroeconomic indicators suggest easing cost pressures.

    Also weighing in, Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, stated that the MPC is gradually relaxing its monetary policy tightening. He acknowledged the Central Bank’s historically strict stance but emphasised that the current economic realities necessitated holding rates steady. Yusuf also agreed that there has been some stability in the exchange rate, noting that, given the current situation, there is already an excess of monetary policy tightening tools in play.

    He said: “Monetary Policy Rate (MPR) were already at around 27.5 per cent and the Cash Reserve Requirement (CRR) is already at 50 per cent, which are practically the limits that monetary policy can be pushed for now. Interest rate now for many businesses is over 35 per cent, and it should not get worse than that.

    “We need to tackle food inflation which is a major factor in our current inflation. So, we need to do a lot more in the area of development finance, why the CBN continues to pursue is the orthodox monitoring policy,” he stated.

    Analysts from the Nigeria Economic Summit Group noted that the easing of inflation is expected to play a significant role in shaping monetary policy decisions. They forecast that the CBN’s Monetary Policy Committee (MPC) may adopt a more accommodative stance in late 2025, potentially lowering interest rates to stimulate economic activity. This shift would represent a departure from the previous tight monetary policy regime that focused primarily on controlling inflation.

    Battle against inflation thickens

    The battle against inflation is intensifying, as policymakers face mounting challenges in managing the delicate balance between curbing inflation and supporting economic growth. The CBN policies, including the unification of the exchange rate, have resulted in significant foreign capital inflows, reducing the bank’s intervention in the forex market. The floatation of the naira, along with the clearing of over $7 billion in FX backlog, has improved the country’s outlook with foreign investors. Multilateral organizations like the World Bank have described these actions as bold interventions aimed at enhancing the economy’s long-term sustainability.

    Upon assuming office, CBN Governor Cardoso highlighted that rebuilding Nigeria’s economic buffers and strengthening resilience were top priorities for his leadership. Prior to his appointment, inflation had surged to 27 per cent, largely driven by excessive money supply growth. Over the previous eight years, GDP growth had stagnated at a modest 1.8 percent, while money supply grew rapidly, averaging around 13 per cent annually. This imbalance not only fuelled inflation but also contributed to a significant depreciation of the naira. Governor Cardoso explained that inflation creates uncertainty for both households and businesses, functioning as a silent tax that erodes purchasing power and drives up the cost of living.

    The nation was also facing a fiscal crisis, marked by unsustainable deficit financing through the Central Bank’s Ways and Means advances, which had ballooned to an unprecedented N22.7 trillion by 2023—roughly 11 percent of the GDP. Additionally, quasi-fiscal interventions by the CBN, totaling over N10 trillion, further undermined market confidence and weakened the effectiveness of its policy tools.

    Against these challenges, the Central Bank of Nigeria (CBN) under Governor Cardoso has sparked renewed optimism in the management of the financial system and the broader economy. The current macroeconomic stabilisation efforts are enhancing Nigeria’s ability to attract foreign investors to its markets. For example, by the end of 2024, Nigeria was able to leverage its improved economic fundamentals to re-enter the Eurobond market, aiming to address its fiscal deficit. This marked the country’s return to the international debt market in November after a two-year hiatus. In a dual-tranche Eurobond issuance, investor demand soared, with subscriptions surpassing $9 billion.

    The high-interest rate environment also drew increased foreign portfolio investment, with inflows reaching $3.48 billion in the first half of 2024, compared to just $756.1 million in the same period of 2023. This upward trend signals growing investor confidence in Nigeria’s ability to manage its external debt burden, providing a positive outlook for the country’s Eurobonds.

    Inflation targeting framework in the works

    The fight against inflation has intensified with the planned adoption of an inflation targeting framework by the CBN to enhance price management. This framework, which has been successfully implemented by central banks in several African countries, is expected to strengthen Nigerians’ purchasing power, increase disposable income, drive aggregate demand, and stimulate production.

    Read Also: CBN, EDC partner to transform cooperative societies

    The effects of rising inflation are being felt by households and businesses throughout the country, making price stability a core mandate of the CBN. In response, the CBN is working towards adopting and implementing the inflation targeting framework, which will replace the current exchange rate targeting framework. This shift is expected to be implemented with strong public support.

    In its efforts to tackle inflation, the CBN recently hosted the Monetary Policy Forum 2025, bringing together fiscal authorities, legislators, the private sector, development partners, subject-matter experts, and scholars. The forum, centered on the theme “Managing the Disinflation Process,” served as a platform for collaborative discussions on strategies to curb inflation and stabilize the economy.

    The forum represents a significant push to enhance monetary policy communication, promote dialogue, and foster collaboration on key issues shaping monetary policy. During the event, Governor Cardoso outlined the CBN’s primary focus on sustaining price stability, transitioning to an inflation-targeting framework, and implementing strategies to restore purchasing power and alleviate economic hardship. He emphasised that the apex bank is maintaining its disciplined approach to monetary policy, with the goal of curbing inflation and stabilising the economy in the face of ongoing challenges.

    “These actions have yielded measurable progress: relative stability in the FX market, narrowing exchange rate disparities, and a rise in external reserves to over $40 billion as of December 2024.”

    Cardoso reiterated that the goal of the CBN is to ensure that monetary policy remains forward-looking, adaptive, and resilient. In addressing our economic challenges, collaboration is key: “Managing disinflation amidst persistent shocks requires not only robust policies but also coordination between fiscal and monetary authorities to anchor expectations and maintain investor confidence,” Cardoso said.

    “Our focus must remain on price stability, the planned transition to an inflation-targeting framework, and strategies to restore purchasing power and ease economic hardship,” he added.

    The CBN has also placed a strong emphasis on strengthening the banking sector by introducing new minimum capital requirements for banks, effective March 2026. This move aims to ensure the resilience of the sector and position Nigeria’s banking industry for a $1 trillion economy. This week, the CBN took another significant step forward with the launch of the Nigeria Foreign Exchange Code, which is designed to promote integrity, fairness, transparency, and efficiency in the FX market. Built on six core principles, the code represents a binding commitment from the financial community to rebuild trust and inspire confidence in the market.

    In addition, the CBN continues to prioritize financial inclusion. The Women Entrepreneurs Finance (We-FI) initiative, part of the National Financial Inclusion Strategy, is actively working to bridge the gender gap by ensuring that more women have access to financial services and digital tools, helping to empower women economically.

    Remittances through International Money Transfer Operators (IMTOs) rose by 79.4 percent to US$4.18 billion in the first three quarters of 2024, underscoring the positive impact of the foreign exchange reforms. Additionally, the CBN lifted the 2015 restriction barring 41 items from accessing FX at the official market, aiming to enhance trade and investment. These reforms and developments reflect the CBN’s commitment to creating an enabling environment for inclusive economic growth. However, achieving long-term macroeconomic stability requires sustained vigilance and a proactive stance on monetary policy.

    “As we shift from unorthodox to orthodox monetary policy, the CBN remains committed to restoring confidence, strengthening policy credibility, and staying focused on its core mandate of price stability,” Governor Cardoso stated. He also highlighted that the move from the exchange rate targeting framework to the inflation-targeting framework aligns with the CBN’s determination to control inflation surges in line with its mandate of maintaining price stability. Inflation continues to be a major concern for the CBN, and the current environment calls for the effective use of monetary policy tools to manage it.

  • CBN, EDC partner to transform cooperative societies

    CBN, EDC partner to transform cooperative societies

    The Central Bank of Nigeria (CBN) Staff Multi-Purpose Cooperative Society Limited has signed a Memorandum of Understanding (MoU) with the Enterprise Development Centre of Pan-Atlantic University and Pro-Serve Integrated Services Limited to strengthen the cooperative as an economic tool for national development.

    The MoU, which was signed at the EDC head office in Ajah Lagos last week was witnessed by the Managing Director, GEN Nigeria, Dr Olawale Anifowose; President, CBN Staff Multi-Purpose Cooperative Society Limited, Nkechinyere Ofili; Founder, Pro-Serve Integrated Services Ltd, Kenechukwu Nwankwo; Director, Enterprise Development Centre, Dr.  Nneka Okekearu; and General Manager, CBN Staff Multi-Purpose Cooperative Society Limited, Pius Obianyor.

    Read Also: Police detain father, friend for impregnating stepdaughter

    According to the parties, the partnership is brokered by lead consultant Pro-Serve Integrated Service Limited. The firm is the business transformation consultant of the CBN cooperative.

    Speaking on the importance of the partnership, CEO/Lead Consultant, Pro-Serve Integrated Services, Kenechukwu Nwankwo said, “This partnership brings to bear the potential of using cooperatives as an economic tool for national development. The CBN Cooperative will serve as a pilot to showcase the potential of a cooperative and what it can achieve for the economy.”

    Currently he stated, “CBN Cooperative Society has about 12,000 members nationwide, and we hope that the partnership with EDC will bring about structured processes in business and corporate governance as well as project management within the cooperative space.”

  • CBN pushing Nigerians back into the banking halls?

    CBN pushing Nigerians back into the banking halls?

    By Elvis Eromosele

    Public institutions in Nigeria have a knack for policy inconsistency. They can aggressively pursue a course of action one moment and, the very next introduce measures that directly contradict their stated objectives. The Central Bank of Nigeria (CBN) is currently at the centre of one such paradox.

    Everyone alive in the last couple of years witnessed the CBN champion financial inclusion, digital banking and cashless transactions. It actively encouraged banks to expand their digital footprint, increase adoption of digital payments and decongest the banking halls. Nigerians responded positively. People embraced digital banking, relying on ATMs, mobile transfers and POS terminals instead of entering the banking halls.

    The CBN has issued a new directive that significantly increases charges on ATM withdrawals. The move, under the guise of improving efficiency, threatens to erode public confidence in the cashless policy and could force Nigerians back into the banking halls. It raises questions about Nigeria’s commitment to the Sustainable Development Goals (SDGs), especially Goal 8 (Decent Work and Economic Growth) and Goal 9 (Industry, Innovation and Infrastructure).

    The other day, the CBN released a circular announcing new charges on ATM withdrawals, set to take effect from March 1. Under the new directive, customers using their bank’s ATMs will not be charged. However, interbank withdrawals will now incur a fee of N100 per N20,000 at on-site ATMs and up to N500 at off-site ATMs. International withdrawals will be charged based on acquirer fees, and the previous three free interbank withdrawals per month ceased.

    Read Also: Provide leadership for Africa, Akufor-Ado challenges Nigerian elites

    A person withdrawing N100,000 from an ATM that does not belong to their bank could pay close to N3,000 in fees. This is a huge increase from the existing system, where customers are entitled to three free withdrawals before incurring minimal charges. This new policy contradicts CBN’s previous commitment to financial inclusion and digital economy growth.

    Now, the introduction of new ATM withdrawal charges is likely to have several unintended consequences for Nigerians. One immediate effect will be the surge in the crowds in the banking hall, as many individuals, particularly those who cannot afford high transaction fees, will prefer to withdraw cash inside the bank. This defeats the purpose of the ATM expansion, which was meant to provide convenience and ease congestion in the banking halls.

    In addition, the ripple effect will be felt by POS agents. As ATMs become a less attractive option due to higher costs, more Nigerians will turn to POS terminals for cash withdrawals. This increased demand may push POS agents to raise service fees, making transactions even more expensive for everyday users.

    Moreover, these additional banking costs come at a time when inflation is already eroding the purchasing power of citizens. For many Nigerians struggling with economic hardship, the extra financial burden will worsen their situation. It will inadvertently make basic financial transactions more costly and less accessible. The new charges will pose a setback for financial inclusion and undermine the progress towards a more digital economy.

    So, what’s the way forward?

    To address the challenge posed by the new ATM withdrawal charges, the CBN should focus on policies that promote financial inclusion rather than discourage it. So, instead of imposing additional fees, it should encourage competition among banks by incentivizing them to expand ATM access, particularly in remote areas. This would reduce dependence on interbank withdrawals and improve overall efficiency.

    In addition, reintroducing the previous allowance of three free interbank withdrawals per month would help sustain ATM usage without burdening customers. At the same time, strengthening digital payment infrastructure is crucial if the goal is to transition to a cashless economy. Many Nigerians still struggle with failed transactions, delays and high mobile banking fees, which must be addressed to build trust in digital payments.

    The CBN should also regulate POS and mobile banking charges to prevent financial services from arbitrarily increasing fees in response to rising ATM costs. Without regulation, POS operators will likely raise their charges, making basic transactions more expensive for the public.

    Furthermore, before implementing major policy changes, the CBN must prioritize public awareness and stakeholder engagement. Consulting financial institutions, consumer advocacy groups and the general public will ensure that new directives are well-received and do not disrupt economic activities.

    The CBN’s new ATM withdrawal charges represent, in my view, a step backwards in the country’s financial inclusion journey. While the apex bank may claim that these charges will improve ATM efficiency, the reality is that they will discourage digital banking, force people back into long queues in the banking halls and impose additional hardship on the masses. I can almost safely predict it would lead to fights in the banking halls.

    For now, however, the question remains: Is the CBN pushing Nigerians back into the banking halls? This is precisely what it looks like right now. Nigerians deserve respite.

    •Eromosele, a corporate communication professional and public affairs analyst, wrote via elviseroms@gmail.com

  • CBN targets single-digit inflation as MPC retains key rates

    CBN targets single-digit inflation as MPC retains key rates

    The Central Bank of Nigeria (CBN) has set its sights on reducing inflation to a single digit in the medium to long term, following the recent rebasing of the economy and a decline in inflation to 24.48 percent.

    CBN Governor Olayemi Cardoso announced this during a press briefing after the first Monetary Policy Committee (MPC) meeting of 2025.

    Cardoso stated that the MPC, after two days of deliberation, decided to maintain all key monetary policy parameters, including the Monetary Policy Rate (MPR) at 27.50 percent, the asymmetric corridor around the MPR at +500/-100 basis points, the Cash Reserve Ratio (CRR) at 50.00 percent for Deposit Money Banks and 16.00 percent for Merchant Banks, and the Liquidity Ratio at 30.00 percent.

    He insisted on the CBN’s commitment to orthodox monetary policies, noting that the positive outcomes so far indicate that inflation is trending downward.

    Clarifying the impact of the rebased Consumer Price Index (CPI), Cardoso explained that the lower inflation figure should not be misinterpreted.

    He stressed the need to analyze more data before drawing comparisons, noting that the CBN is currently assessing the figures and will provide further guidance in due course.

    Despite the complexities, he reiterated that inflation is gradually declining, supported by the recent stability and appreciation of the foreign exchange rate, with the differential between the official and parallel markets now less than one percent.

    On the collaboration between monetary and fiscal authorities, Cardoso stressed its critical importance in sustaining recent economic improvements.

    Read Also: CBN axes bank chiefs with toxic loans

    He cited the recent Monetary Policy Forum as an example, where stakeholders from the organized private sector, Bureau de Change operators, and government representatives, including the Minister of Finance, participated.

    Cardoso noted that both sides are committed to deepening their dialogue and holding regular meetings to address key economic issues proactively.

    Addressing concerns about the impact of elevated borrowing costs on economic growth, Cardoso assured that the CBN’s primary objective is to stabilize the foreign exchange and financial markets. He expressed confidence that such stability would attract increased foreign investments, stimulating the much-needed economic growth. He also highlighted the competitiveness of the Nigerian currency, which has spurred growing interest from international investors.

    The MPC noted several factors expected to positively influence price dynamics in the near to medium term, including the stabilization of the foreign exchange market, the moderation of Premium Motor Spirit (PMS) prices, and the federal government’s efforts to improve security in food-producing areas. The Committee emphasized the need for continued collaboration between monetary and fiscal authorities to maintain and build upon these gains.

    Additionally, the MPC acknowledged improvements in the external sector, with the convergence of exchange rates between the Nigeria Foreign Exchange Market (NFEM) and Bureau de Change (BDC) operators.

    The Committee commended the CBN’s recent measures, such as the Electronic Foreign Exchange Matching System (B-Match) and the Nigeria Foreign Exchange Code, aimed at enhancing transparency and credibility in the forex market.

    Cardoso stated that improved oil production, reaching 1.54 million barrels per day by the end of January 2025, would strengthen Nigeria’s current account position and positively impact external reserves. Despite prevailing macroeconomic challenges, the MPC observed that the banking sector remains resilient.

    However, the Committee urged the CBN to maintain vigilant oversight, particularly in light of ongoing banking system recapitalization, ensuring that only quality capital is injected.

    The MPC expressed confidence that recent monetary and fiscal policy measures would attract increased foreign direct investment, portfolio inflows, and diaspora remittances as investor confidence grows.

    The Committee also assured of its commitment to sustaining these measures to anchor inflation expectations, ease exchange rate pressures, deepen financial inclusion, and enhance the effectiveness of monetary policy transmission mechanisms.