Beyond the Pain: Preserving Reform Gains, Ensuring Policy Consistency
In this piece, James Emejo writes on the subtle but important shift in the economic conversation during the recent 7th Africa Emerging Markets Forum – about what happens after Nigeria’s current reforms have been concluded, and if the gains will outlive the present administration among other critical issues
The debate is no longer simply about whether Nigeria needed difficult reforms but increasingly about what happens after the reforms have been undertaken.
At the August forum with the theme, “Building Resilience Amidst Geoeconomic Uncertainties” held in Abuja, Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, observed that the next phase of reforms may prove even more consequential than the decisions that brought the country to its current point of relative macroeconomic stability.
Calling for restraint, consistency and continuity, he said the country must preserve the gains of the reforms long enough for them to become the foundation for investment, production and jobs.
Cardoso’s interventions at the forum, particularly his fireside conversation with Director-General of the World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala had a central proposition – that economic credibility was not an achievement that can be declared once but has to be continuously earned.
He said, “We have learned one lesson. Credibility is built intentionally—one right decision after another—and strengthened through consistent action.”
The central bank governor’s remarks captures perhaps the biggest risk facing the country’s current economic transition, having already paid the political and social cost of difficult decisions.
The exchange-rate regime had been overhauled, monetary financing of fiscal deficits curtailed as the CBN returned to its core mandate and the Foreign Exchange (FX) market had been largely repositioned around greater transparency and price discovery.
Cardoso argued that these measures were beginning to produce results, including moderated inflation, stronger external buffers and a safer, better-capitalised financial system.
But the gains, by their nature, remain vulnerable to policy reversals, a key concern for the apex bank governor, who argued for protecting the reform architecture.
The Real Value of Credibility
For years, Nigeria’s economic problem was not simply a shortage of resources but the uncertainty surrounding the rules under which those resources were deployed.
Multiple exchange-rate windows, uncertainty in the foreign exchange market, monetary financing of fiscal deficits and weak policy credibility created distortions that affected businesses, investors and households.
Cardoso pointed to the fact that CBN had spent the past three years of his stewardship trying to reverse that perception.
He said, “We returned firmly to our core mandate. We unified the exchange rate, restored price discovery, ended monetary financing of fiscal deficits and rebuilt the foreign exchange market around transparency and settlement integrity.”
The significance of that intervention lies in what it implies about the next stage especially given that a reform programme does not generate its full benefits immediately.
A stable exchange-rate framework has to survive enough cycles for businesses to plan around it, according to Cardoso, as monetary discipline also has to become credible enough for inflation expectations to adjust. Investors have to see consistency before committing capital. And banks need confidence in the macroeconomic environment before expanding lending.
Essentially, stability itself remains an investment as squandering it would mean asking the economy to pay the cost of adjustment again.
This is why Cardoso’s insistence on consistency deserves attention – the danger is not only that a reform could be reversed formally. It could also be weakened gradually through exceptions, policy inconsistencies or institutional compromises that recreate the very uncertainty the reforms were designed to remove.
Adhering to rules-based international System
Cardoso, on a broader intervention, identified fragmentation in global trade, more selective international capital and rapid advances in artificial intelligence as the three defining shifts confronting African economies.
Speaking during the engagement with the WTO boss, he said, “The question is no longer whether the global order is changing. The question is how we turn that change from a source of vulnerability into a source of growth and shared prosperity.
“The era of abundant liquidity chasing returns regardless of risk is over. Capital increasingly flows to countries that offer credibility, transparency, policy consistency and strong institutions.
“Credibility is no longer only a central bank concern; it is a national economic asset.”
Cardoso stated that Africa could no longer rely principally on foreign investment, stressing that “We must mobilise more of our own resources—our pension funds, insurance assets, domestic savings and diaspora capital—and channel them into productive investment.”
He added said difficult reforms undertaken over the past three years were beginning to restore confidence in the economy.
He stated that “At the central bank, we returned firmly to our core mandate. We unified the exchange rate, restored price discovery, ended monetary financing of fiscal deficits and rebuilt the foreign exchange market around transparency and settlement integrity.”
Policy Consistency as Key Reform Ingredient
The apex bank boss stressed that consistency had begun producing measurable outcomes, noting that “Inflation has moderated from high levels, external buffers have strengthened and the financial system is safer and better capitalised.”
He said, “We have learned one lesson: credibility is built intentionally—one right decision after another—and strengthened through consistent action.”
Cardoso agreed that execution—not policy announcements—would determine whether Africa capitalised on emerging opportunities.
He said, “We recently resolved at the Central Bank that collaboration among economic institutions must move beyond rhetoric and become a practical reality,” he said.
“We no longer have the luxury of time. Time is no longer on our side. We must reduce barriers to trade and investment and move beyond simply having good conversations.
Cardoso also warned that African governments must prepare for a world of tighter global financing conditions, adding that “We cannot continue depending indefinitely on external financing”.
According to him, “Foreign investment remains important, but we must also focus on generating and mobilising our own domestic capital”, adding that attracting foreign investors starts with winning the confidence of local businesses.”
He said, “It is very difficult to persuade foreign investors to invest if local investors themselves are unwilling to do so. Our domestic investors should become our strongest ambassadors.”
The CBN governor stressed that stability remained indispensable for attracting investment and expanding regional trade
Cardoso reminisced his experience as former Lagos State Commissioner for Economic Planning and Budget, noting that understanding demographic pressures had informed difficult reforms undertaken in the state years ago, lessons he believed now apply across Africa.
He further emphasised Nigeria’s strategic importance to the continent, noting that the former accounts for about 60 to 70 per cent of West Africa’s GDP and about one-quarter of Africa’s economy.
The apex bank boss said, “If Nigeria gets it right, the benefits will extend far beyond our borders. That is why we simply cannot afford to get it wrong.”
He said, “Understanding the rules-based international system is being stressed and tested. For Africa and other emerging markets, the question is no longer whether the global order is changing, but how we turn that change from a source of vulnerability into a source of growth and shared prosperity. And we heard some of the answers to that earlier today.
“Let me highlight, however, three major shifts that I expect will shape Africa’s opportunities in this changing global environment. First, trade is fragmenting. Geo-economic considerations are causing countries to look inward and to reorganize trade and critical supply chains around trusted partners and neighboring markets through nearshoring and friend-shoring.
“For Africa, this change is both a warning and an opportunity. With intra-African trade still accounting for only about 16 percent of our total trade, we must build stronger regional value chains, produce more of what we consume, and trade more with one another. The African continental free trade area provides the platform and opportunity to turn this global shift to an African advantage.”
According to him, “But we must go beyond the agreements and remove the practical barriers to trade by improving transport networks, harmonizing customs standards, and making cross-border payments faster and more affordable. Second, capital has become selective and impatient. The era of abundant liquidity, chasing returns regardless of risk, is over.
“Investors now have more choices and less tolerance for uncertainty. Capital increasingly flows to a fullness that offers credibility, transparency, quality, consistency, and strong institutions. For Africa, this means that our development ambitions cannot depend solely on attracting foreign capital.
“We must mobilize more of our own resources, including pension and insurance funds, domestic savings and diaspora capital, and channel them towards productive domestic investment. It also means that there is a premium on the quality of Africa’s institutions. Investors must be able to trust our policies, understand our rules, and plan beyond the next political or economic cycle.”
Cardoso further noted that “credibility is not only a central bank concern, it is a national economic asset. Third, artificial intelligence is reshaping economic activity. It is changing how goods are produced, how services are delivered, and the skills required to compete.
“It is disrupting established industries while creating entirely new business models, services, and forms of work. And of course, thank you very much to Mr. Gail Dindonich for delivering such a lovely presentation earlier this morning on this particular topic. Africa must move beyond being consumers of technology.
“We must become creators, developing African solutions to African challenges, and building businesses capable of taking those solutions to the world. To achieve this, Africa must invest in the foundations of an AI-enabled economy, including reliable electricity, affordable connectivity, digital infrastructure, and above all, a generation of AI-savvy young Africans ready to build solutions for the continent and to compete globally. Nigeria’s recent experience demonstrates how an emerging market economy can respond to these shifts.
“Over the past three years, we made difficult but necessary policy decisions to restore stability, rebuild confidence, and strengthen the economy’s capacity to withstand shocks. At the Central Bank of Nigeria, we returned firmly to our core mandate. We unified the exchange rate, restored price discovery, ended monetary financing of fiscal deficits, and rebuilt the foreign exchange market around transparency and settlement integrity.
“When the message was difficult. Today, the results of those sacrifices are evident. Inflation has moderated from high levels.”
He pointed out that despite the energy shock, external buffers had strengthened, and the financial system safer and better capitalized to support the economy.
He stressed, “We have learned one lesson. Credibility is built intentionally, one right decision after another, and strengthened through consistent action.
“That same lesson holds at the continental level. If Africa is to benefit from these global shifts, rather than become inflicted often, we must convert our potential into tangible gains. That transformation would rest on four foundations.
“One, the first, is macroeconomic stability. No surprises. No nation has industrialized under persistently high inflation and an unstable exchange rate.
“Stability gives households and businesses the confidence to consume and invest, and gives investors the certainty to commit capital for the long term. Second is continental scale. The African continental free trade area gives Africa a solid platform for what we must build the markets.
“Third is patient capital that creates productive capacity. We must mobilize Africa’s pensions, insurance assets, domestic savings, and diaspora wealth. We must also seek foreign investment that creates jobs, transfers technology, develops local supplies, and strengthens African businesses, not investment that simply extracts value and needs.
“The fourth and most important is our people. We must prepare young Africans for an AI-enabled economy and unlock the full economic participation of women, because Africa cannot fly with one wing. Africa must be an Africa in which young entrepreneurs can build, scale, and compete without having to leave the continent to realize their potential elsewhere.”
According to him, “The anxiety surrounding the changing global economic order is real, and we’ve heard it. But disruption also creates opportunity.
“We’ve heard that also. As established rules have been written, emerging markets have an opportunity to move from being rule-takers to becoming rule-setters. Africa now has an opportunity to help shape the emerging order, but that opportunity will not be realized by potential enrolment.
“It will require strategic collaboration, credible institutions, and courage to act together. There is much more to discuss.’
Okonjo-Iweala’s Monetary Policy Endorsement
However, Okonjo-Iweala provided perhaps the most significant independent validation of Cardoso’s approach during the firechat.
The WTO chief said the CBN’s repositioning around its core mandate and commitment to excellence was “very commendable.”
Her endorsement recognised that the central bank’s role in the reform process extends beyond individual policy measures.
An institution focused on monetary policy and price stability, operating with greater transparency and discipline, is itself part of the infrastructure required for economic confidence.
Reforms Must Yield Visible Gains for Nigerians
The WTO boss said, “I think there are two challenges. One is how to translate these reforms into the everyday lives of Nigerians”, cautioning that public support would remain difficult to sustain unless citizens became convinced that they stood to benefit from the reforms.
She urged the CBN to continue working with other economic institutions to ensure the reforms were transmitted through the economy.
Leadership Remain the Missing Link
For Okonjo-Iweala, the quality of leadership ultimately determines whether those policies produce results.
Her intervention was unusually direct.
“It’s all about leadership,” she said, calling for leaders who have the interests of their countries and the continent at heart and who focus on implementation, job creation and removing the obstacles to economic growth.
According to general perception, the country had never suffered from a complete absence of economic ideas. Its more persistent problem has been the gap between policy design and execution.
For Okonjo-Iweala, good leadership means asking the right questions: What is preventing growth? What is stopping businesses from expanding? What must be done to create jobs? And how can young people be given compelling reasons to build their futures at home?
She noted that Africa’s youthful population can become an enormous economic advantage, but only if the continent can convert young people into productive workers, entrepreneurs and innovators.
Otherwise, its demographic dividend could become a demographic burden, she stressed.
“We cannot simply celebrate having a young population without thinking about how those young people will find jobs, acquire the right skills and become productive members of the economy,” she warned.
Okonjo-Iweala further stressed that reform payoff must be jobs, pointing to the fact that the ultimate test of macroeconomic stabilisation is whether it creates the conditions for the private sector to invest and expand.
