Cardoso Meets the Moment

Louis Achi

The new 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. On September 26, the Senate in consonance with constitutionalized procedure confirmed his appointment by President Bola Ahmed Tinubu.

The upper legislative chamber also confirmed the appointments of Emem Usoro, Muhammed Abdullahi-Dattijo, Philip Ikeazor and Bala Bello as deputy governors of the CBN, cleared by a voice vote after thorough screening by senators at the plenary.
As it were, the senate screening provided an opportunity for the new CBN boss to give a ‘sneak preview’ of his vision of the nation’s apex bank, particularly, its revamped mode. Without beating about the bush, Cardoso captured the core of his governance thrust as evidence-based, data-supported monetary policy and financial stability – both encapsulating the twin drivers of his mission trajectory.

Besides laying out in straightforward language his approach to incepting a new CBN, Cardoso enumerated his plans to help President Bola Tinubu’s administration to achieve its projection of $1trillion GDP growth within eight years.
According to him, “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 identified a set of physical reforms and growth patterns that will be achieved in $1 trillion GDP within eight years.

“In reviewing selected growth targets that can achieve $1 trillion GDP growth in comparison with selected countries with large population and similar characteristics as Nigeria, it is interesting to identify micro-economics indices that point 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 downturn.

“The (Tinubu) administration has identified such a bold target for the country, it is our feeling that achieving this is very critical to achieving 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.”
According to Cardoso, the new CBN team would invest heavily on data gathering to enhance adequate forecast. Hear him: “We will be going to evidence-based monetary policies; we shall not be making decisions based on whims. I believe that to significantly revamp the infrastructure of the central bank with respect to data and to ensure that our data gathering capacity is significantly enhanced so that we can make decisions based on data that is key in determining the rate of inflation.”

Speaking on inflation, Cardoso said: “On the issue of inflation and the price of goods, the jury is out, some people will say structure; some others will say it is money supply issue. Truth is, it is a combination of both. If indeed it is food inflation we need to ramp up food production. That is the effort that the fiscal side will tackle and it is tackling and we will collaborate with them to ensure that it happens.

“If it is energy we know the challenges of energy that if you were importing things into the country that has energy component, automatically you are importing inflation. The whole objective is ensuring that the energy side of the country is ramped up. We will also work very closely with the fiscal side to ensure that it happens.
“The big issue is the issue of money supply and the way that money has gone up tremendously in Nigeria. That on its own has major effect on inflation,” he added.

He stressed that, “Going forward from the Central Bank of Nigeria, we will do everything possible to ensure that we work closely with the fiscal side and ensure that the issue of deficit financing does not become a problem to us. We cannot afford to have the big challenges from fiscal deficit financing.”
Cardoso reminded the rapt Senators that he had the privilege of serving as the chairman of Citi Bank from 2010 to 2022, where he dedicated himself to enhancing both the financial and non-financial aspects of the institution.

He correctly described the current exchange rate in Nigeria as very worrisome but pledged that the new management of the apex bank would come up with rules that were open and transparent to the players and stakeholders in the economic sector to understand.

His words: “We have to be transparent so that any of the players in that market will understand. We have to come up with rules that are transparent also. You cannot reasonably expect serious foreign investors, portfolio investors’ full direct investment, without addressing the short term measures.
“Those players who will have direct impact on our market will not do so if we do not have an open transparent system that everybody understands, that can be relied upon, and which is not subject to review at will without the involvement of critical stakeholders.

“In setting up those guidelines, one will also have to carry stakeholders along. We should be ready to engage people and share views. That I think should be a major objective to get stakeholders together and share views.”
A notable economic and development policy advisor, circumspect financial sector leader with over three decades of managerial experience, Cardoso has previously demonstrated a relentless pursuit for growth, but has done so in a measured and calculated manner. He certainly needs these traits at the CBN, an entity many see as severely compromised.

It’s no secret that today, the world and Africa stand on the brink of substantial disruptions – and of considerable opportunity – as new business and banking models challenge traditional playbooks. This requires bold, innovative thinking to frontally grapple with the associated tests.
Good a thing, Cardoso rejects staying tamely at the end of received policy prescriptions. He covets knowledge-driven innovations, proactive engagement with stakeholders, policy makers and sure-footed action. These dimensions have been boldly mirrored in his leadership and the remarkable impact he has made in the financial services sector.

The new CBN boss’ appointment is widely seen by the critical financial sector community as aligning with President Tinubu’s “Renewed Hope” agenda targeting revitalization of the Nigerian economy and building confidence among Nigerians and international partners.
To achieve critical Financial System Stability which Cardoso has promised, 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.Core finance-banking sector analysts believe the CBN had intermittently veered into areas that are not its core mandate. It could be recalled that the CBN’s Anchor Borrowers’ Programme, a failed financing model for small-holder farmers, was part of the last administration’s efforts to boost the nation’s rice production, supply, distribution and consumption value chain.

But these failed quirky extra-mandate experiments, according to economic gurus, should certainly cease under the Cardoso-led CBN. He would nevertheless have to grapple with other transformative imperatives without going beyond CBN’s monetary policy mandate which the previous dispensations largely trampled on.

With a career spanning over three decades, Cardoso has made significant contributions to the private and public sectors, leaving an ineradicable mark on the country’s economic landscape.
His private sector to public service and policy advocacy reflects a lifetime of leadership, achievement and a genuine commitment to positively impacting society. His impact 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.
Now in the cockpit of the nation’s apex bank, sector gurus expect Cardoso can only leverage his new responsibility to create sweeping, positive change.