CPPE says Yemi Cardoso restored liquidity, transparency and credibility but warns harsh monetary tightening is stifling private investment.
The Centre for the Promotion of Private Enterprise (CPPE) has declared that the leadership of the Central Bank of Nigeria (CBN) under Mr. Yemi Cardoso has achieved improved liquidity, transparency and credibility with reforms that liberalised and unified the foreign exchange (FX) market.
This was stated by the Chief Executive Officer of CPPE, Dr. Muda Yusuf, during the weekend in a press statement titled, “Two Years of Yemi Cardoso as CBN Governor, Achievements and Emerging Concerns.”
Yusuf pointed out the leadership of Cardoso has brought about significant transformation of Nigeria’s financial system, which has yielded transparency, credibility, and stability.
He therefore said the next phase of reform must focus on achieving a more balanced policy stance that supports growth while preserving macroeconomic stability.
According to him, addressing structural financing gaps and sustaining governance reforms would be critical for unlocking the financial sector’s full potential as a driver of inclusive economic development.
Yusuf said, “Over the past two years, under the leadership of Cardoso, the CBN has embarked on a comprehensive transformation agenda aimed at restoring confidence, strengthening governance, and repositioning the financial system to support inclusive and sustainable economic growth.
“Nigeria’s financial system has historically faced challenges including foreign exchange market distortions, weak corporate governance, excessive monetary financing, and limited access to affordable credit.
“These issues contributed to macroeconomic instability, inflationary pressures, and suboptimal economic performance, which the Cardoso-led CBN has sought to address through bold reforms that are focused on transparency, stability, and credibility.”
He added that “one of the most significant reforms under Cardoso has been the liberalisation and unification of the foreign exchange (FX) market, whose key outcomes include transparency and credibility.”
He noted that the elimination of multiple FX windows has “reduced opportunities for arbitrage and corruption and enhanced greater confidence, which have attracted higher inflows from autonomous sources.”
Yusuf also said that Cardoso has achieved market efficiency, improved price discovery and more efficient allocation of FX resources.
He also asserted that the CBN has made progress in improving governance and autonomy of the apex bank by strengthening oversight mechanisms and internal controls, improving professionalism and reducing political interference in monetary policy decisions.
Yusuf said that this progress has “curtailed unrestrained monetary financing, reduced fiscal dominance and macroeconomic distortions.”
He added that other achievements of Cardoso’s leadership include maintaining confidence in the financial system as a core priority, ensuring banking sector resilience with the introduction of recapitalisation measures to enhance the soundness of banks and strengthened regulatory frameworks to safeguard stability in the face of global and domestic shocks.
Yusuf said that “through a mix of monetary policy tools including interest rate hikes, liquidity management, and market reforms the CBN has contributed to the recent deceleration in inflation and restoration of macroeconomic stability.”
However, Yusuf also noted emerging concerns such as the current CBN’s aggressive monetary tightening that is meant to combat inflation but has become highly restrictive.
He said, “Monetary Policy Rate (MPR) at 27.5 per cent and Cash Reserve Ratio (CRR) at 50 per cent have pushed up the cost of funds.
“Elevated lending rates have suppressed private sector borrowing, particularly in manufacturing, SMEs, and other productive sectors.
“There is growing risk that private investment could be displaced by high-yield government instruments.”
The CPPE also observed that “a fully market-based approach, while improving efficiency, has not addressed structural financing gaps.
It said that “SMEs face limited access to affordable credit while infrastructure and industrial projects lack patient capital and affordable long-term funding mechanisms.”
Yusuf, therefore, recommended that the CBN should balance price stability with economic growth through gradual easing.
He said, “Calibrate CRR and MPR downward as inflation moderates to create a more enabling credit environment.
“Complement monetary tightening with supply-side measures to address structural inflation drivers.
“Develop credit guarantee schemes and concessionary financing programs for SMEs and critical sectors.
“Promote development finance instruments and deepen the domestic bond market to mobilise resources for infrastructure.
“Entrench corporate governance standards to ensure continuity beyond current leadership.”
Yusuf also called for the strengthening of CBN’s legal frameworks to further protect its autonomy from political pressures.
He also tasked the apex bank to maintain clear and predictable policy communication to manage market expectations while broadening its “consultation with industry players and development partners to foster inclusive decision-making.”
Dike Onwuamaeze
