By Bassey Udo
The adoption of orthodox monetary policy, transparency, and evidence-based decision-making are the best ways to restore confidence in the Nigerian economy and strengthening macroeconomic stability, the governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso,has said.
Mr Cardoso stated this on Thursday in Abuja at the opening session of the Monetary Policy Committee (MPC) workshop on the theme: “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability.”
Describing the ongoing reforms in the financial sector as critical, the CBN governor commended the Deputy Governors, members of the MPC, Directors, and other stakeholders for their resilience and dedication in navigating the economy through a challenging period of reform.
Reflecting on Nigeria’s recent monetary policy history, Cardoso noted the significant challenges faced by the Bank at the inception of his administration, including weakened institutional autonomy, reduced policy credibility, and reliance on unorthodox monetary tools.
These challenges, he pointed out, blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions by the Bank.
Also, he observed that the foreign exchange market was opaque and inefficient, while weak fiscal-monetary coordination posed serious constraints to economic outcomes.
These structural issues, he said, contributed to rising inflationary pressures, exchange-rate volatility, and a general erosion of investor and public confidence in the economy
However, he emphasised that reforms introduced by the current leadership at the Bank have begun to reverse these trends.
The CBN, he noted, has restored a more orthodox approach to monetary policy under the current MPC framework, with renewed emphasis on conventional instruments and the policy rate as the primary signalling tool.
Besides, he said improvements in liquidity management, forward guidance, and policy communication have enhanced transparency and helped anchor expectations among households, businesses, and investors.
Consequently, the CBN Governor noted that although inflation remains elevated and requiring close monitoring, it has begun to moderate, and exchange-rate stability has improved.
In addition, he said enhanced transparency in the foreign exchange market has supported more efficient price discovery and reduced volatility, contributing to a gradual restoration of confidence in the economy.
He further attributed the economy’s growing resilience to external shocks, including recent geopolitical developments in the Middle East, to the ongoing reforms and improved policy coordination.
Beyond policy outcomes, Mr Cardoso highlighted progress in institutional strengthening at the Bank, adding that decision-making processes were increasingly anchored in data-driven analysis and structured deliberation, while communication practices have become more consistent and predictable.
These efforts, he noted, align with the Bank’s medium-term objective of transitioning to a more explicit inflation-targeting framework, which would require deeper institutional reforms, stronger collaboration, and sustained technical work.
Furthermore, he described the recently concluded banking recapitalisation exercise as a reflection of effective policy coordination, extensive stakeholder engagement, and the diligence of the Bank’s financial-sector supervision teams.
Reiterating the Bank’s focus on orthodox monetary policy, Mr Cardoso cautioned against renewed calls for interventionist measures in key sectors of the economy, noting that such programmes had previously distorted the Bank’s balance sheet.
He stressed that the institution’s renewed credibility over the past two and a half years had largely stemmed from its disciplined reliance on conventional monetary policy tools.
Cardoso reaffirmed the Bank’s commitment to transparency, evidence-based policymaking, and institutional strengthening, emphasising the importance of continuous learning and adaptation for achieving sustainable macroeconomic stability.
He expressed confidence that the workshop would yield practical insights to further enhance the implementation of monetary policy and support sustainable economic growth.
Earlier, the Deputy Governor of the Economic Policy Directorate, Dr. Muhammad Sani Abdullahi, in his welcome address emphasised the importance of broad-based participation in policy formulation, noting that facilitators were drawn from policy, research, and professional practices.
Abdullahi stated that the diversity of perspectives was essential to foster informed dialogue, rigorous analysis, and collaborative engagements to strengthen the effectiveness of monetary policy.
He explained that the workshop was designed to provide a platform for structured dialogue, technical exchange, and shared learning, adding that the theme was particularly relevant in the current environment, where monetary policy was shaped by evolving domestic economic conditions, global spillovers, and heightened uncertainty.
The theme of the workshop, he pointed out, reflected the Bank’s commitment to continuous improvement in policy formulation and implementation.
He expressed optimism that the workshop’s outcomes would support ongoing efforts to strengthen policy formulation, analysis, and implementation within the CBN.
The two-day workshop featured technical sessions led by subject experts with deep knowledge and practical insights into monetary policy issues, including policy transmission mechanisms, financial market development, analytical frameworks, and institutional processes, with discussions tailored to Nigeria’s economic context.