Cardoso highlights the negative impact of excessive money printing and the crash in oil prices on Nigeria’s economy. Discover the economic challenges and potential solutions.
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has once again attributed the current economic challenges facing the nation to the monetary policies implemented by his predecessor, Godwin Emefiele.
Cardoso made these remarks during a press conference on Tuesday, following the conclusion of the 297th meeting of the Monetary Policy Committee (MPC) in Abuja.
He announced the committee’s decision to increase the Monetary Policy Rate (MPR) by 50 basis points, raising it from 26.75% to 27.25% in an effort to combat the inflation rate, which currently stands at 32.15%.
Emefiele served as the CBN governor from June 4, 2014, until June 9, 2023. Following Emefiele’s suspension, President Bola Tinubu appointed Cardoso as the new CBN chief in September 2023, a decision that was promptly ratified by the Senate.
Under Cardoso’s leadership, the MPC has raised interest rates by 8.5% over the past year, increasing from 18.75% in September 2023 to 27.25% a year later. During Cardoso’s tenure, the naira has depreciated significantly, trading at over ₦1,600/$1 compared to approximately ₦700/$1 in September 2020.
When questioned about the effectiveness of the apex bank’s monetary policies, including the series of interest rate hikes and the collapse of foreign exchange windows, Cardoso reiterated that the economic situation is a direct consequence of his predecessor’s policies.
“You cannot separate the current circumstances from the events of the past year,” Cardoso stated, noting that while the economy grew at an average rate of 1.2% during Emefiele’s term, the money supply expanded by 12.6%. “This created a fundamental distortion,” he explained.
“We inherited a situation characterized by a loose money supply from 2017 to 2023, which resulted in excessive liquidity being injected into the economy.”
Peoplesmind