Eyeing Monetary Policy Revamp as Cardoso Assumes Office

Louis Achi

President Bola Ahmed Tinubu’s pick as governor of the Central Bank of Nigeria, CBN, Dr. Olayemi Michael Cardoso, formally assumed duty in an acting capacity on Friday, September 22, 2023, following the resignation of Dr. Godwin Emefiele.

Alongside the new Deputy-Governors-Designate, Cardoso subscribed to the relevant oaths of office at a brief ceremony held at the CBN Head Office in Abuja. He has since settled down to the task of administering monetary and financial sector policies of the federal government.
It could be recalled that, leaning on his constitutional discretion, Tinubu had on Friday June 9, 2023, suspended Emefiele, then CBN governor who was directed to hand over the affairs of his office to the Deputy Governor (Operations Directorate), Folashodun Adebisi Shonubi, who acted as the apex bank boss until Dr. Cardoso’s appointment was made.

Cardoso would lead the apex bank for an initial term of five years, pending confirmation by the Nigerian Senate. His appointment is widely seen by the critical financial sector community as aligning with Tinubu’s ‘Renewed Hope’ agenda targeting revitalisation of the Nigerian economy and building confidence among Nigerians and international partners.

The demonstrable capacity and adroit skills of Cardoso, a notable economic and development policy advisor, circumspect financial sector leader with over three decades of managerial experience would certainly be sternly tested as he takes over at the CBN, an entity many see as severely compromised.
For a stuttering dollar-denominated, consumption-driven and almost solely petroleum-funded economy plus a misunderstood role of central banks the world-over, Cardoso will be expected to dig deep and redirect the course of the nation’s apex bank. A more rigorous, logical analysis of micro and macro-economic dynamics in a national economy suggests the new CBN boss is left with little wiggle room but to frontally confront the challenges.

At a fundamental level, Nigeria’s economy is debatably not worse off than most other comparable commodity exporting emerging economies. But as a consequence of opening up the nation’s economy to “all-comers” and dropping all capital controls by the previous administrations, performance of the economy naturally dipped and requires proactive interventions to resuscitate it. This is Cardoso’s forte.

As part of CBN’s long-term strategy to strengthen the Nigerian economy, Cardoso would need to evolve initiatives to resolve the underlying factors goading challenges to long-term GDP growth, economic productivity, unemployment and poverty that had pervaded the economy over the past decades.
He would have to grapple with these transformative imperatives without going beyond CBN’s monetary policy mandate which restricts wholesale delving into developmental issues, although the CBN Act (2007), as amended, to some extent recognizes this.

But clearly, strengthening the economic recovery process in Nigeria is certainly not a picnic. As it is, the project has now been handed over to a patriot who believes in Nigeria, who has unflinching faith in the ingenuity of Nigerians and who holds dear, the promise of the nation’s shared future under an administration that has promised a renewal of hope in the national journey.
Besides, to effectively manage the seismic global economic environment configured by the Sino-American tension, Russia-Ukraine war, rising tendencies and incidences of protectionism, new nationalism and anti-globaliSation – especially in the western hemisphere requires a bold, well-informed and experienced administrator on duty.

Further, to enhance a crucial macro-economic stability, emphasis would now shift to supporting improved GDP growth and greater private sector investment; the apex bank would need to leverage monetary policy tools in supporting a low inflation environment, while seeking to maintain stability in the exchange rate.
To achieve Financial System Stability, a resilient and stable financial system is imperative for continued growth of the nation’s economy given the intermediation role of financial institutions, to support the needs of individuals and businesses.

Key sector analysts believe that the CBN has intermittently veered into areas that are not its core mandate. It could be recalled that the CBN’s Anchor Borrowers’ Programme, a financing model for small-holder farmers, was part of the last administration’s efforts to boost the nation’s rice production, supply, and distribution and consumption value chain. These quirky extra-mandate experiments, according to economic gurus, should certainly cease under a Cardoso-led CBN.

Cardoso is a prominent figure in the vibrant Nigerian finance and public policy arenas. With a career spanning over three decades, he has made significant contributions to the private and public sectors, leaving an ineradicable mark on the country’s economic landscape.
He earned a Bachelor of Science (B.Sc.) degree in managerial and administrative studies from Aston University in the United Kingdom. Driven by a thirst for more knowledge, he later earned a Master’s degree in Public Administration from the prestigious Harvard Kennedy School, Cambridge, Massachusetts.

A remarkable career with prominent financial institutions marked Cardoso’s private sector trajectory. He kicked-off his banking career with Citibank, eventually rising to Vice President. Later, he co-founded Citizens International Bank, where he served as an Executive Director for eight years. Perhaps not surprisingly, his expertise in the financial sector contributed significantly to his later roles in public service.

In 1999, as Nigeria transitioned to civilian democratic rule, he was appointed as the first Commissioner for Economic Planning and Budget, Lagos State. In this role, he played a pivotal role in crafting and overseeing the implementation of a blueprint that catalysed economic development in Lagos, Africa’s foremost megacity.

Cardoso introduced significant reforms during his tenure that improved the state’s financial autonomy and tax revenue generation. His visionary leadership paved the way for economic growth and transformation in Lagos. He also spearheaded initiatives such as the Medium-Term Expenditure Framework (MTEF), Security Trust Fund, and Public-Private Partnerships (PPP).
His influence extended beyond Nigeria’s borders. He advised and collaborated with major international development organizations, including the World Bank, Ford Foundation, UN Habitat, World Health Organisation, and the Swedish Development Foundation. His contributions to global development initiatives helped shape policies and strategies for poverty alleviation and growth.

Cardoso’s leadership roles included chairing the board of Citibank Nigeria, where he steered remarkable growth and garnered accolades. Under his leadership, the bank’s total assets increased by 308.3 per cent and total revenue grew by 235.6 per cent. He championed diversity and gender inclusion within the organisation, significantly increasing the percentage of women in both employment and board membership.

He also served on the boards of Nigerian subsidiaries of Texaco and Chevron. He chaired the committee of EFInA, a financial sector development organization supported by the Bill and Melinda Gates Foundation. These roles showcased his commitment to financial inclusion and development.
Significantly, Cardoso’s contributions did not escape the attention of a grateful world. He received several awards, including an honorary Doctorate Degree in Business Administration from Aston University and Citibank’s Global Distinguished Alumni award. These honours recognised his outstanding contributions to business and society.

His compelling trajectory from the private sector to public service and policy advocacy reflects a lifetime of leadership, achievement, and a commitment to positively impacting society. His influence is felt in Nigeria and on the global stage where he continues to shape policies and initiatives that contribute to economic growth and social development.

A calm, simple family man with even simpler tastes, Cardoso’s persona contrasts sharply with that of his former American peer – the astute economist and ex-Chair of the US Federal Reserve Board Alan Greenspan who held the second-longest tenure in that position behind William McChesney Martin. Although unassuming in his public appearances, not unlike Cardoso, saturation media coverage raised Greenspan’s profile to a point that several observers curiously likened him to a “rock star”.

Will the Nigerian media extend similar favours to self-effacing Cardos? Though an urbane fellow, he is not a ‘rock star’ but neither craves that quirky status, in a third world country yearning for economic redemption, through proactive, circumspect regulatory governance that promotes monetary stability and a sound operating financial environment.