At NEC Conference Cardoso Declares CBN Reforms Have Achieved Economic Stability

• Says banks’ recapitalisation will support $1 trillion economy

•Declares CBN will protect Naira at all cost, currency now more competitive

• Warns economy not out of danger as election cycle poses risks to price stability

•Bagudu hails Tinubu for milestones in economic transformation

James Emejo in Abuja

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, yesterday said the apex bank’s reforms, introduced on his assumption of office, have established economic stability.

This is as Minister of Budget and Economic Planning, Senator Abubakar Bagudu, hailed President Bola Tinubu for implementing reforms that have aided economic transformation as well as improved the fiscal condition of states and local governments.

The minister also commended the president for his contributions to strengthening federalism, noting that “a more united federation is gathered here because of the choices you made”.

Also, Minister of State for Finance, Dr. Doris Uzoka-Anite, said the country required 10 per cent annual growth rate over the next decade to actualise its aspiration for a $1 trillion economy.

The trio spoke at the opening of the 2nd National Economic Council (NEC) Conference with the theme, “Delivering Inclusive Growth and Sustainable Development: The Renewed Hope National Development Plan” in Abuja.

The central bank governor said for a long time, the economy had not achieved the remarkable performances as currently witnessed.

Cardoso said a $3.42 billion balance of payments surplus recorded in the third quarter of 2025 represented a significant improvement while inflation has moderated significantly to 15.15 per cent.

He said the banking sector remained sound while external reserves have grown to $49 billion as of February 5, 2026.

The CBN governor said, “This is a very important statistic. When we took office, net reserves were about $3 billion. By the end of last year, net reserves had increased significantly into the $30 billion range, and as of February 5, 2026, they stand at $49 billion.

“We are now net buyers in the foreign exchange market. By this, I mean that while we allow the market to generally find its own level, the Central Bank also intervenes from time to time to purchase foreign exchange.

“The premium between the official and parallel market rates has collapsed to under 2 per cent. You can clap for me. You no longer need foreign exchange to travel—you can use your naira card and pay for whatever you need abroad.

“The naira is now more competitive, and people are no longer afraid to hold it. In the past, even in neighbouring West African countries, no one wanted to accept naira. That has changed.”

Cardoso added that there is now market predictability that allows for opportunity to plan.

He said the CBN under his watch will do whatever is necessary to protect the value of the naira.

He also said ongoing banking sector recapitalisation will support financing for the $1 trillion economy.

Cardoso said, “You no longer need to search frantically for foreign exchange or build excessive FX buffers. Those holding unnecessary foreign exchange reserves are, frankly, losing money every day. The banking sector remains resilient, and investor confidence is returning.”

The central bank governor, however, warned that there are risks ahead that must be managed, particularly the likelihood of excess liquidity during the election cycle.

He said liquidity overhang remained a concern—noting that there is still significant liquidity in the system which must be managed carefully.

He said, “We are not yet out of the woods. The election cycle is another risk, as election periods typically involve increased liquidity injections. This must be carefully monitored to ensure it does not undermine the bold reforms that have restored stability. Global trade tensions also pose risks, and I know everyone here is well aware of recent global developments.”

However, he said the CBN Roadmap for 2026–2030 focuses on leveraging macroeconomic stability to enhance productivity and growth.

According to him, macroeconomic stability remains the most effective enabler of investment and increased output across agriculture, manufacturing, and service value chains.

He stated that without stability, there can be no growth, adding that “One positive outcome of our efforts is that stability has now been restored.

“The roadmap includes anchoring disinflation, FX market normalisation, and strengthening financial system resilience.

“In simple terms, this means we will stay the course and continue doing what we have been doing. Our roadmap for enabling growth and development includes price stability through a transition to inflation targeting, strengthening external reserves, and safeguarding the value of the naira.

Explaining the pitiable condition of the economy when he took over in 2023, Cardoso said, “We inherited an unprecedented scale of fiscal dominance. As shown on this chart, the Ways and Means–to–GDP ratio stood at 8.68% in 2022, but by 2025 it had declined to 0.69%.

“The ratio had risen to an unprecedented level, reflecting entrenched excess liquidity and years of monetised fiscal deficits that severely compromised the effectiveness of monetary policy.

“It may interest you to know that over the past eight years, up to 2022, while the economy grew at an average of 1.8% per annum, money supply expanded by about 13% per annum. You can clearly see the enormous distortion that this created.”

He said, “There were also significant GDP losses from subsidy regimes—petrol subsidies and foreign exchange misalignment—something I do not want people to ever forget.

“While we often focus on the substantial revenue losses from fuel subsidies, the losses arising from foreign exchange subsidies were actually even greater. So, while we complained about the scale of losses from fuel subsidies, the losses from FX subsidies exceeded those amounts.

“In addition, there was the cost of loose monetary policy and excess liquidity. The cost of having to mop up this excess liquidity became a major challenge.”

He said, “We faced high and persistent inflation, which surged to 34.6%. The foreign exchange market was dysfunctional. You will all recall that there was a huge backlog of over $7 billion, and the parallel market premium exceeded 60%. Investor confidence had collapsed.

“We all know what that meant—capital flight was rampant. Nobody wanted to hold the naira, and the situation was truly desperate.

“There were also direct interventions by the Central Bank, which reached an unprecedented ₦10.93 trillion. This was, quite frankly, a huge problem. While we have been able to correct many of these issues, it is important to recognise that some of these distortions are still present.

“These interventions provided short-term support—some would argue they were necessary—but they also created long-term monetary distortions, excess liquidity, and increased the cost of liquidity management. That was the situation we inherited.

“Our strategy rested on three mutually reinforcing pillars designed to restore stability and catalyse sustainable economic growth.”

According to him, “The first pillar was a decisive monetary policy reset. The Monetary Policy Rate was increased aggressively by 875 basis points to decisively tackle inflation.

“We returned to orthodox monetary policy and phased out all quasi-fiscal development finance interventions to focus squarely on price stability. Without price stability, there can be no investment and no sustainable growth.

“The second pillar was engineering a market-driven foreign exchange regime, something we have discussed for a long time. This involved unification and price discovery, clearing the FX backlog, and institutionalising transparency. In my view, institutionalised transparency is a very critical ingredient. Without it, participants simply will not come to your market.

“The third pillar was fiscal coordination and systemic resilience. This involved enhanced fiscal coordination, adherence to statutory limits on deficit financing through Ways and Means advances, and a sharp decline in such financing—from 2.65% in 2023 to 0.69% in 2024.

“We also addressed the continuation of quasi-fiscal operations and supported the Presidential Committee on Fiscal Policy and Tax Reforms to enhance non-oil revenue. Diversifying our earnings base is absolutely critical.

“We also strengthened financial system resilience. We all understand the importance of the banking system to our overall economic goals. Banks are recapitalising, investors are earning positive real returns, and equity markets are recovering on the back of improved earnings and stability.

“We have tightened succession rules to ensure smoother management transitions and stronger resilience during periods of uncertainty.

“We are doing everything possible to ensure that the banking system that emerges from recapitalisation is fit and proper and capable of supporting the ambitious goal of a $1 trillion economy.”

However, Bagudu congratulated the president on the growing success of his bold and economic reforms, attested to globally.

The minister said, “Just last week, a visiting World Bank delegation led by the Managing Director, Operations, told the world that Nigeria’s reforms have become a global reference.

“In fact, an IMF report covering the same period also listed Nigeria among the ten leading countries contributing most to global economic growth. This is in addition to many other statements by leaders of various nations, international organisations, and private sector actors.

“But more important than what others say is what Nigerians say. Members of NEC represent the 36 states and the FCT. They have been given opportunities to contribute to most of the reform measures, and commendably, most of them — regardless of party — believe you are pursuing what our country needs and fully support the government.

“In fact, some have said they can’t justify being in another party. It is clear that you want to be remembered as someone who led us to make the right choices, not necessarily the most convenient ones.”

However, Bagudu pointed out that “while we have performed well, it is even more crucial to concentrate on how we can improve further”.

He stressed the need to sustain current reform and economic momentum, and ensure that reform benefits every Nigerian.

Bagudu further noted that poverty eradication and reaching a minimum $1 trillion economy by 2030 remained challenges for the present administration, including to “mobilise our three tiers of government and our citizens.”

Nonetheless, he said, “I believe this aligns with what Section 130(2) of our Constitution intends, by describing the President as Chief Executive Officer of the Federation, as well as Head of State and Commander-in-Chief of the Armed Forces of the Federation. You have performed these roles admirably.

“The 36 State Governors, all members, have participated commendably in the proceedings, often agreeing with policies and programmes proposed by the Federal Government.

“Some of these relate to the coordination of fiscal and monetary policies, security, infrastructure, grassroots development, as well as measures to boost domestic production.

“In fact, governors are either leading or serving on committees that tackle national issues, including the effort to increase the national revenue by curbing oil theft.

“I, therefore, thank our governors for their cooperation and steadfast faith in our cooperative federalism.”

He said Tinubu has “encouraged us to recognise that true federalism lies in our ability to recognise the potentials of the lowest level of government, which is closest to the people, and to support the sustainable generation of value within it. Hence, your focus on what each ward can do and how it can be supported.”

Meanwhile, Uzoka-Anite pointed out that while the economy is stabilising with a 4 per cent growth recovery in 2025, achieving a trillion-dollar economy demanded more aggressive expansion, noting that while 6–7 per cent growth is sufficient to reduce poverty, reaching $1 trillion required sustained double-digit growth driven by private investment and structural reforms.