- Reveals New Measures to Revive economy
By Afolabi Samuel Odunayo
The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has announced that the Nigerian banking sector would help Nigeria achieve a $1 trillion economy by 2030.
Cardoso made this declaration during a presentation to the Senate Committee on Banking, Insurance, and Other Financial Institutions at the weekend in Abuja, while reviewing the first half of 2024.
Cardoso noted that since he assumed office in October 2023, the CBN’s management has focused on stabilizing the economy, restoring confidence in financial markets, and laying the groundwork for sustainable growth.
He highlighted that the Nigerian economy showed resilience in early 2024, with a growth rate of 2.98% in the first quarter, up from 2.31% in the same period last year.
He emphasized that the services sector was the primary driver of this growth, contributing 58.04% to GDP with a growth rate of 4.32%, while the industrial sector also improved, achieving a growth rate of 2.19%.
On inflation, which rose from 29.90% in January to 34.19% in June 2024, Cardoso maintained that the pace of monthly increases had moderated, which to him, indicates the effectiveness of the CBN’s anti-inflationary measures.
The apex Bank Governor also reported what he called a significant narrowing of the spread between official and Bureau de Change (BDC) rates, from N162.62 in January to N47.22 in June 2024. According to Cardoso, this is an indication of a successful price discovery and increased market efficiency.
Cardoso highlighted the increase in external reserves to $36.89 billion as of July 16, 2024, up from $33.22 billion at the end of December 2023, driven largely by receipts from crude oil-related taxes and third-party receipts.
He pointed out that the reserves could finance over 11 months of imports of goods and services or 14 months of goods, a development he said is significantly above the international benchmark of three months.
In the equity market, the CBN Governor said there is impressive performance with the All-Share Index rising by 33.81% and market capitalization expanding by 38.33% from December 2023 to June 2024.
Despite these successes, Cardoso stressed the CBN’s ongoing efforts to implement policies which would sustainable growth in financial markets.
Similarly, to address rising inflation, Cardoso outlined a comprehensive set of monetary policy measures, including raising the policy rate by 750 basis points to 26.25%, increasing cash reserve ratios, normalizing open market operations, and adopting an effective inflation-management approach.
He emphasized the ongoing review of the CBN’s micro and macroprudential guidelines to reinforce the resilience of financial institutions, and the plan to re-capitalize banks to improve their capacity to support economic growth as moves aimed at economic recovery.
“Our ultimate goal is to create a more stable, resilient, and efficient financial system that can better serve the Nigerian economy while adhering to international best practices,” Cardoso stated.
It would be recalled that Senator Adetokunbo Abiru, Chairman of the Committee, who opened the session highlighted the purpose of the interaction, saying it is to update the committee on the CBN’s efforts, activities, objectives, and plans regarding monetary policy.
