Preserving Economic Gains

James Emejo writes that all hands must be on deck to nurture the relative recovery in macroeconomic fundamentals to greater stability and growth.

One of the major highlights of the 2025 Central Bank of Nigeria (CBN) Executive Policy Seminar was the passionate plea by the apex bank Governor, Mr. Olayemi Cardoso, that Nigerians, irrespective of rank and status, must be determined in ensuring that the economy prospers.

Before he assumed office in September 2023, the Nigerian economy was in bad shape, marked by foreign exchange (FX) woes, macroeconomic instability, high inflation, lack of institutional credibility, and loss of investor confidence, particularly due to huge unresolved FX backlog, among others.

CBN financing of the federal government breached statutory thresholds through “Ways and Means” advances, which amounted to N22.7 trillion by 2023, and contributed significantly to price and debt pressures as well as monetary expansion.

The central bank had lost its institutional trust following a lack of transparency and adherence to unorthodox monetary policies, which was criticised by international investors. Inflation peaked at over 27 per cent in October 2023, the highest in two decades, driven by excessive broad money supply (M2) amid exchange rate pressures.

This was in addition to about $7 billion unmet FX backlog amid liquidity crisis and multiple exchange rate windows, leading to arbitrage, hoarding, and corruption.

The era was further marred by weak GDP growth as the economy stagnated, growing at only about 1.8 per cent over the eight years leading up to 2023.

But the economy has now turned the corner, as attested to by various international ratings agencies, the World Bank, IMF, institutional investors, among others – necessitating the need to preserve and nurture the progress so far recorded through the bold reforms initiated by the administration of President Bola Tinubu.

Chairman/Chief Executive, IHS Holding Limited, Sam Darwish, recently passed a vote of confidence on the Nigerian economy and administration of President Bola Tinubu, acknowledging the “great job” in stabilising the economy and strengthening the foreign reserves, and the Naira in general.

His commendation came amid IHS’ strong earnings in the third quarter of the year (Q3 2925), beating expectations while revisiting its full 2025 guidance upwards.

Addressing thousands of Wall Street investors and analysts on its earnings, Darwish declared, “The current Nigerian administration has done in our opinion a great job in stabilising and improving the economic outlook of the country as they increase reserves and strengthen the currency, while reducing red tape for businesses among other fundamental actions. So, we are upbeat about Nigeria.”

The return to relative calm followed the efforts by the CBN leadership through critical reforms – unifying the FX windows amid other reforms in the FX segment, removing barriers to diaspora remittance inflows, monetary tightening among others.

Call to action

Cardoso, at the executive seminar, declared that nobody had a monopoly of the economy, stressing that “this economy belongs to all of us.”

He appealed that the progress so far achieved in the past two and a half years amid bold reforms, must be protected, noting that the general attitude of “I am fine; others can sort themselves out” – will not sustain growth, adding that systemic weaknesses affect everyone.

Specifically, he said a situation where the country had a “frightening Ways and Means to GDP ratio should never happen again.”

He said, “We must avoid indiscriminate interventions that yield little result. We cannot sit back and assume that someone else will fix it — this economy belongs to all of us. “That is why we hold events like this — not because we simply like to talk, but because we must continue to educate, to engage, and to ensure that we stay on course. I have no doubt that Nigeria is moving in the right direction. We will get there — but we must remain focused, disciplined, and united in our resolve.”

Safeguarding the Economy

Recent conversations have stressed the need to safeguard the economy by desisting from activities that kill growth. Nigerians have been encouraged to patronise local industries to strengthen the Naira and create jobs.

Recently, Chief Economist at SPM Professionals, Dr. Paul Alaje, urged politicians to desist from “sharing” dollars in the pre- election season to preserve the recent achievements in monetary policy administration. He spoke at the Premium Times Academy training with the theme, “Business, Economy, and Financial Reporting”, organised in partnership with the CBN in Abuja.

Alaje warned that the dollarisation of the economy could stoke inflation and erode monetary policy gains so far achieved in CBN’s inflation-targeting interventions.

In an interview with THISDAY, he said, “Over the years — since 1998 — I have tracked election spending closely. A lot of money flows into the economy during election cycles, particularly in foreign currency (dollars).

“The situation was especially bad in 2010 and 2014, and we saw a similar trend in 2023. Each time, there’s a surge of dollar inflows into the system, and the economic impact becomes evident after the election year.

“Typically, the pre-election year records higher economic growth due to spending activities, but immediately after the election, the economy declines sharply.”

According to him, politicians often make massive withdrawals, convert funds into dollars, and push them into Bureau De Change (BDC) markets, fueling exchange rate instability and inconsistency.

Alaje further called on the National Assembly, INEC and EFCC to boost monitoring mechanisms to address the menace in the interest of the economy. He said, “And if, during that same period, there is a global economic shock, Nigeria feels the impact even more severely because our reserves are already depleted.

“Why? Because during election years, politicians make massive withdrawals, convert funds into dollars, and push them into Bureau De Change (BDC) markets. This fuels exchange rate instability and inconsistency.

“This issue cuts across all political parties — it’s not limited to one.”

He said the National Assembly and INEC should establish clear rules to curb dollar spending by politicians.

According to him, “If campaign spending is to be done, whether within or beyond INEC’s approved limits, it must be done in Naira only. “The EFCC should also be empowered to monitor and prosecute anyone who spends foreign currency during elections.

“If we enforce that, then for the first time in a long while, Nigeria could experience a relatively stable economy even after an election year.” Cardoso however stressed, “We must defend what is ours and safeguard the interests of future generations. This is a collective effort. We must all contribute to baking a bigger pie — expanding our GDP relative to our population.”

The governor reaffirmed the apex bank’s commitment to credible policies, transparent markets, and sound governance – all of which had helped to restore investor confidence in the financial system since he assumed office in 2023.

Cardoso said price stability remained central to the CBN’s policy framework, anchored on inflation targeting, noting that credible inflation-targeting regime enhances predictability, guides market expectations, and anchors long-term investment.

He said, “Investors avoid uncertainty — the greater the predictability, the stronger the incentive to invest. Once you get the fundamentals right, investors naturally gravitate toward your market.

“Boosting local production and industrial competitiveness is equally crucial. Collaboration with fiscal authorities to reduce costs and incentivize production remains a key imperative.”

He said fast-tracking export growth, particularly through services and the creative industries, further highlights the country’s emerging strength in music, film, design, and digital services.

He said, “We are proud to have supported the journey that led to the launch of the Nigeria-US Data Deal on October 1st — a major platform for our creative talents to reach global audiences.”

Cardoso further pointed out that enhancing access to finance for SMEs remained a priority for the bank, and reaffirmed its commitment to expanding access through innovative credit frameworks, improved risk-sharing mechanisms, and strengthened credit infrastructure.

In addition, the CBN governor noted that through the reforms he implemented, Nigerians would no longer need connections or personal influence to transact or get their work done at the central bank.

According to him, “When I assumed responsibility as Governor, I made a promise that Nigerians would no longer need connections or personal influence to transact or get their work done at the Central Bank. You do not need to know the Governor, a Deputy Governor, or any Director to access legitimate services.

“Yes, where issues arise, they will be addressed appropriately — but the era of everyday personal lobbying at the CBN is over. The economy belongs to everyone, and no one should feel they have a monopoly over it.”

However, he stated that the seminar offered yet another opportunity for introspection and refinement of policy options, and encouraged all participants to engage actively.

According to him, “The insights gathered here will inform our future policies and shape the next phase of reform implementation. Your collective contributions are vital to shaping Nigeria’s macroeconomic future.”

The CBN governor thanked the Minister of State for Finance, Dr. Doris Uzoka-Anite for her efforts and support in some of the reform initiatives of the bank as well as the CBN staff.

Cardoso said, “When I took up this responsibility, there were many things we needed to revisit. We had to relearn how to work effectively together, and understand what was really going on around us.

“When we speak about collaboration, it is important to acknowledge the honourable minister, who began many of these engagements even from her time as minister of trade – some of the initiatives we have referenced today were actually started under her leadership, and she has maintained continuous engagement with the central bank.

“I am very pleased that, at many of these events, we are not merely observers but active participants. Indeed, recent international engagements, including with the IMF, have demonstrated the depth of collaboration that now exists — even when unexpected adjustments are required, the process continues seamlessly.