Commendations have been pouring in torrents in celebration of Mr. Olayemi Cardoso’s, Governor, Central Bank of Nigeria {CBN} for a yeoman job at the helm of the nation’s foremost bank.
For a man called to the saddle of managing the affairs of the CBN, and the economy at a critical period of economic uncertainties, indeed deserves the honour.
In September 2023 he was appointed to run the affairs of the Bank, and to regulate the financial sector.
In his inaugural address to unveil his agenda, he did not pretend about his mission as the nation’s financial regulator. He miffed at the several governance issues and distortions in the Bank, and the financial sector. He pledged to address them. Compliance was the only ubiquitous word being heard from the man popularly, the Headmaster.
The agenda he outlined were audacious aimed at stabilizing, promoting, and laying a solid foundation for the projected $1 trillion GDP economy within 7 years. This economic reform blueprint entails increasing banks’ capital base, and adopting an explicit inflation targeting framework. He has remained on course. His background made him to be at home, and confident to surmount the challenges, if given a conducive environment.
Olayemi brings a wealth of experience, and discipline to the job. An experienced stock-broker, consultant, and economic planner, well-horned to reposition, and restore the credibility of the Bank, and restructure the financial system.
Confident to bequeath a robust regulatory framework to support economic growth and stability, he preoccupied himself with positioning the Nigerian economy as the Africa’s financial hub. In achieving this objective, Cardoso mandated the banks in the country to increase their capital base to meet the demands of a larger economy on or before March 2026.
On assumption of office if we could recall, it was at a critical period of economic turbulence and uncertainties, beset by the deluge of economic headwinds – the spiking inflationary pressures and foreign exchange volatility, compounded by huge debt inherited from past administrations. He calmly, and methodically navigated the challenges.
Therefore, as he marks a year in office, a cursory assessment of his policies shows how impactful they have been, reconfiguring the financial ecosystem.
He signalled interest normalization, increased banks’ capital base, and adopted an explicit inflation-targeting initiative to promote the effectiveness of monetary policy. Cardoso’s action was to ensure a robust regulatory framework, capable of supporting economic growth and stability, as well as positioning the Nigerian economy as a leading financial hub in Africa. To achieve this objective, he encouraged equity issuance, merger, or license adjustments.
Grade marking his stewardship in the last one year revealed a determined man ready to give whatever it takes to make impact. The regulatory review of Bureau de Change (BDC) operations is another initiative aimed at promoting transparency in the foreign exchange (FX) market. The new licensing requirements and capital standards imposed on BDCs are designed to enhance oversight and distribution of foreign currency, ultimately reducing market distortions and ensuring a more stable FX market.
Prior the policy however, BDCs were alleged to have been complicit in market distortions, and became channels for money laundering, engaging in illicit financial transactions. They were alleged to be havens for terrorism financing
Though, Governor’s prioritizes a-$1 trillion GDP economy, focusing on sustainable, and inclusive growth, it may however turn a mirage without a strong, and coordinated regulatory bodies. The realization birthed Financial Services Regulation Coordinating Committee Strengthening {FSRCS} to foster inter-agency meetings, and collaborations on issues such as cryptocurrency frameworks, and infrastructure financing.
And to achieve this objective also, his leadership at the Bank adopted inflation-targeting framework to enhance monetary policy effectiveness, while also recognizing the critical role of technology in providing financial services to boost financial inclusion.
Furthermore, his quest without a comprehensive review of the critical pillar of the financial ecosystem – consumer protection would have been incomplete. He ordered a comprehensive overhaul of the consumer protection framework to pave way for a revised regulation. It was issued in February 2024 to improve standards, and address emerging Fintech risks, poised to enhance customer service standards, and increased engagement with formal financial institutions.
In furtherance of this objective, a pilot consumer protection risk-based examination was conducted to identify policy gaps, and improve conduct among financial institutions. This complements traditional compliance checks by identifying urgent risks that could affect financial consumer protection. Added to this provision by the Cardoso-led CBN is the enforcement of sanctions to ensure compliance, deter unethical behaviour, and enhance transparency in the financial ecosystem.
He also recognized the essential role of capacity building in refocusing the CBN on its core mandate, thus, urging adherence to corporate governance. Cardoso acknowledged that the Bank strayed, and lost focus of its core mandate, delving and engaging in quasi-fiscal activities. He addressed this challenge by streamlining its operations to improve efficiency, and align it with Bank’s revised strategic objectives.
The CBN governor’s performance appropriately placed on a scale is hugely impressive, considering the timeframe. However, he, and his team, should not rest on their oars, there is more work to be done. Especially, the Naira exchange rate debacle.
What looks like a clog in his sterling performance assessment is the high cost of exchange. Thus, Nigerians eagerly await a new Nigeria blossoming in $1 trillion GDP economy as Olayemi Cardoso promised. and Nigeria, our country becomes the rallying financial point of the African continent, then we can.
Elizabeth Bamidele writes from Kogi state
