The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has stated that without the bank’s proactive monetary policy interventions, Nigeria’s inflation rate could have skyrocketed to 42.81% by December 2024. He further projected a substantial rise in diaspora remittances, estimating that the total figure for 2024 could reach N31.79 trillion once fourth-quarter data is released.
Cardoso made these revelations during the 2025 Monetary Policy Forum, an event that brought together top government officials, heads of economic agencies, and private sector leaders to discuss Nigeria’s economic trajectory and policy outlook.
Key Monetary Policy Interventions in 2024
According to Cardoso, the CBN took bold policy measures throughout 2024 to combat rising inflation and stabilize the economy. These measures included:
- Raising the Monetary Policy Rate (MPR) by a cumulative 875 basis points, bringing it to 27.50%.
- Increasing the Cash Reserve Ratio (CRR) for Other Depository Corporations by 1,750 basis points to 50.00%.
- Adjusting the asymmetric corridor around the MPR to enhance monetary policy transmission.
The CBN Governor emphasized that these interventions played a crucial role in preventing inflation from escalating to dangerous levels.
“Counterfactual estimates suggest that without these decisive policy interventions, inflation could have reached 42.81% by December 2024,” Cardoso stated. “The Central Bank remained committed to ensuring price stability through robust policy actions, despite prevailing economic challenges.”
Foreign Exchange Reforms and Market Stability
Beyond inflation control, Cardoso highlighted the critical foreign exchange (FX) reforms implemented by the CBN to enhance market efficiency and boost investor confidence. The unification of multiple exchange rate windows significantly improved FX liquidity and market stability.
These measures contributed to a remarkable 79.4% surge in remittances processed through International Money Transfer Operators (IMTOs). Remittances rose from $2.33 billion in the first three quarters of 2023 to $4.18 billion over the same period in 2024. The CBN also:
- Cleared a $7 billion FX backlog, restoring market confidence.
- Lifted restrictions on 41 items previously banned from accessing the official FX market since 2015.
- Introduced new minimum capital requirements for banks, set to take effect in March 2026, to enhance financial sector resilience and global competitiveness.
Financial Inclusion and Market Integrity Initiatives
In a bid to promote financial inclusion, the CBN launched the Women’s Financial Inclusion Initiative (WIFI) under the National Financial Inclusion Strategy. This initiative aims to bridge the gender gap in financial access by providing women with digital financial services, education, and tools to enhance economic participation.
Additionally, the Nigeria Foreign Exchange Code was introduced to foster transparency, integrity, and efficiency in the FX market. Cardoso described this code as a vital step toward rebuilding trust in the financial system, ensuring fair market practices, and boosting investor confidence.
The Path to Sustainable Macroeconomic Stability
Addressing the broader economic outlook, Cardoso underscored the need for continued policy coordination between fiscal and monetary authorities to sustain the fight against inflation. He warned that achieving lasting price stability would require vigilance and proactive monetary policy measures.
“Our focus remains on price stability, transitioning to an inflation-targeting framework, and adopting strategies to restore purchasing power,” he noted. “Disinflation is within reach, but we must maintain bold and coordinated policy measures to consolidate progress.”
Looking ahead, he expressed optimism that global capital flows into emerging markets, including Nigeria, would improve as advanced economies ease their monetary policies. However, he cautioned that Nigeria’s ability to attract investment hinges on maintaining macroeconomic stability, strengthening investor confidence, and ensuring positive real returns on investments.
CBN’s Commitment to Orthodox Monetary Policies
Cardoso reiterated the CBN’s commitment to shifting away from unorthodox policies, emphasizing a return to conventional monetary approaches to restore credibility and enhance economic stability.
He stated, “The transition from unorthodox to orthodox monetary policies is aimed at restoring confidence in our financial system. Strengthening policy credibility and prioritizing price stability will pave the way for sustainable economic growth.”
Conclusion
As Nigeria navigates economic challenges, the CBN’s proactive interventions have played a crucial role in stabilizing inflation, improving FX liquidity, and boosting remittance inflows. With continued policy vigilance and strategic reforms, the apex bank remains committed to fostering a resilient and inclusive economy in 2025 and beyond.
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