The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has called for deeper economic collaboration with the Middle East and Nigeria’s diaspora in the region, emphasizing mutual growth and development.
His remarks were made during a meeting with Talal Al-Humond, Assistant Governor for Monetary Affairs at the Saudi Arabian Central Bank (SAMA), on the sidelines of the inaugural Conference on Emerging Market Economies, which took place in Riyadh, Saudi Arabia.
The event was jointly organized by the Saudi Ministry of Finance and the International Monetary Fund (IMF) Regional Office.
In his address, Cardoso pointed to Saudi Arabia’s commitment to diversifying its economy through groundbreaking infrastructure projects, tourism investments, and innovative environmental strategies as a model for Nigeria.
He expressed his belief that these initiatives could offer valuable lessons for Nigeria’s own economic transformation, particularly in boosting tourism and infrastructure development.
Cardoso also reiterated his intention to strengthen ties with the Nigerian diaspora in the Middle East, highlighting their potential to support Nigeria’s financial sector by improving remittance flows.
He assured that the CBN would continue working to strengthen Nigeria’s macroeconomic fundamentals, foster a conducive environment for private sector growth, and generate quality jobs for the Nigerian population.
Responding to these remarks, Talal Al-Humond assured Cardoso that SAMA would collaborate closely with the CBN to achieve shared goals for economic growth and financial stability.
During the conference, which featured discussions on economic strategies in the face of global challenges, Mr. Cardoso also took part in a panel discussion moderated by Jihad Azour, Director of the IMF’s Middle East and Central Asia Department.
Cardoso highlighted recent reforms in Nigeria’s financial markets, particularly those aimed at addressing distortions in the foreign exchange market. He shared that these reforms, including narrowing the gap between official and parallel exchange rates from as much as 60% to just 4-5%, have helped boost confidence and transparency in Nigeria’s forex market.
The Governor also discussed significant achievements under his leadership, such as the introduction of an electronic matching system in the forex market and a new code of ethics signed by all Nigerian banks to ensure compliance with market rules.
These efforts have contributed to an increase in Nigeria’s foreign reserves, surpassing $40 billion—its highest level in nearly three years.
Cardoso acknowledged the significant challenges Nigeria has faced, including capital flight, multiple exchange rate systems, inflation, and currency depreciation.
However, he emphasized that the CBN’s priority since his appointment has been to restore market confidence by addressing the backlog of foreign exchange transactions and pursuing policies aimed at macroeconomic stability.
One of the key policies Cardoso discussed was the aggressive tightening of Nigeria’s monetary stance to combat inflation. Over the past year, the CBN raised interest rates by 850 basis points and moved away from quasi-fiscal interventions.
He also highlighted the removal of fuel subsidies, which had previously cost Nigeria around 6% of its GDP annually. This bold step, which had been delayed by previous administrations, is expected to have a lasting positive impact on Nigeria’s fiscal health.
Further discussing financial reforms, Cardoso revealed that the CBN has mandated Nigerian banks to recapitalize, strengthening the financial system and ensuring resilience against economic shocks. These measures, he said, have already shown promising results in stabilizing the sector.
The Governor also touched on the importance of adapting policy decisions to each economy’s specific needs, noting that Nigeria had stuck to tightening its monetary policy even as global trends suggested otherwise. He stated that a year later, many financial experts recognized Nigeria’s approach as the right one for its unique economic context.
On the issue of financial inclusion, Cardoso highlighted Nigeria’s 74% financial inclusion rate and emphasized the need for more aggressive efforts to expand this coverage, ensuring economic growth benefits all segments of society. He pointed to digitalization as a key enabler of financial inclusion, particularly through mobile money services, and stressed the need for gender-focused initiatives to empower women—an important driver of economic growth across Africa.
In conclusion, Cardoso reaffirmed the CBN’s commitment to maintaining macroeconomic stability and fostering long-term resilience for Nigeria’s economy. He also underscored the importance of policy consistency in achieving sustainable growth.
The two-day conference, held from February 16-17, 2025, in Al Ula, Saudi Arabia, served as a platform for policymakers and economic experts from emerging markets to discuss structural changes in the global economy and their implications for the future of emerging economies.
