Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), recently highlighted the significant impact of the past government’s financial practices on the nation’s current economic challenges.
Speaking at a CEO Forum in Lagos on Thursday, Cardoso attributed Nigeria’s rising inflation and high interest rates to the previous administration’s wasteful N27 trillion Ways and Means advances and N10 trillion intervention programs.
Cardoso explained that these financial interventions have led to an increased money supply, which in turn has driven inflation and forced the Monetary Policy Committee (MPC) to maintain high interest rates.
As of May, Nigeria’s interest rate stood at a staggering 26.25 percent. He emphasized that the MPC’s decisions are data-driven and focused on curbing inflation, rather than being influenced by external pressures or emotions.
He clarified that the interest rates are not set by the CBN governor alone but by the MPC, which consists of independent-minded members who rely solely on data trends. “Interest rate is not set by the governor of the Central Bank.
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The interest rate is set by the members of the monetary policy committee,” Cardoso noted. He praised the committee’s commitment to addressing inflation, stating, “The MPC has made it very clear that for them, the major issue is taming inflation, and they will do whatever is necessary to achieve that goal.”
Cardoso stressed the importance of understanding the repercussions of the previous administration’s financial decisions. He pointed out that the excessive money supply, resulting from the N27 trillion Ways and Means advances and N10.5 trillion interventions, has led to the current economic predicament.
“Sadly, we have a situation where a lot of money supply went into the system. We all saw Ways and Means soar to N27 trillion. We saw interventions of N10.5 trillion. It has its consequences. In large respect, that is what we are paying for now,” he stated.
Under the tenure of the former CBN Governor, Godwin Emefiele, Nigeria’s borrowing from the apex bank surged to N27 trillion. Cardoso distanced himself from the monetary policy decisions made during that period, emphasizing his commitment to addressing the resulting economic issues.
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The governor’s remarks highlight the need for prudent fiscal management to stabilize Nigeria’s economy and mitigate the effects of past financial excesses.
As the CBN continues to navigate these challenges, Cardoso’s focus remains on data-driven strategies to reduce inflation and restore economic stability.