The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has called for stronger economic ties with the Middle East and greater engagement with the Nigerian diaspora in the region.
Speaking during a meeting with Talal Al-Humond, Assistant Governor for Monetary Affairs at the Saudi Central Bank (SAMA), on the sidelines of the inaugural Conference on Emerging Markets Economies in Riyadh, Cardoso highlighted the importance of learning from Saudi Arabia’s infrastructure and tourism development strategies.
He commended Saudi Arabia’s economic diversification efforts, particularly its investments in environmental projects, large-scale transformation, and tourism, as essential models for development.
Strengthening Financial Ties
Cardoso reaffirmed his commitment to working with the Nigerian diaspora in the Middle East to enhance remittance flows and bolster Nigeria’s financial sector. He emphasised that the CBN would continue to strengthen macroeconomic fundamentals to support private sector growth and create high-quality jobs.
In response, Talal Al-Humond assured Cardoso of the Saudi Central Bank’s willingness to collaborate with the CBN in achieving mutually beneficial objectives.
Foreign Exchange and Economic Reforms
During a panel discussion at the conference, moderated by IMF official Jihad Azour, Cardoso outlined key reforms in Nigeria’s financial markets. He noted that distortions in the foreign exchange market had previously created a gap of up to 60% between the official and parallel exchange rates. However, consistent policies and improved transparency had reduced the gap to 4-5%.
The Governor also highlighted the introduction of an electronic matching system for forex transactions and a foreign exchange code of ethics, signed by all Nigerian banks, to ensure adherence to market rules. These measures, he reported, had contributed to Nigeria’s foreign reserves surpassing $40 billion, the highest level in nearly three years.
Tackling Economic Challenges
Cardoso acknowledged Nigeria’s economic difficulties, including capital flight, multiple exchange rate regimes, high inflation, and currency depreciation. Upon assuming office, he prioritised restoring confidence by clearing the backlog of forex transactions and stabilising the economy.
To combat inflation, the CBN adopted a strict monetary policy, raising interest rates by 850 basis points over the past year. He also highlighted the removal of fuel subsidies, which had previously drained 6% of Nigeria’s GDP annually. While previous administrations lacked the political will to eliminate the subsidy, its removal has significantly improved the country’s fiscal position.
Financial Sector Reforms and Digital Inclusion
Cardoso stressed the importance of recapitalising Nigerian banks to strengthen financial stability and build resilience against future shocks. He also underscored the need to expand financial inclusion, particularly through digitalisation and financial technology, with Nigeria’s financial inclusion rate currently at 74%.
He emphasised the role of mobile money services and gender-focused initiatives in bridging financial access gaps, particularly for underserved communities.
Commitment to Stability
Cardoso reaffirmed the CBN’s commitment to maintaining macroeconomic stability, sustaining policy consistency, and ensuring Nigeria’s long-term economic resilience.
The two-day conference, held in Al Ula, Saudi Arabia, from 16 to 17 February 2025, brought together policymakers and economic experts to discuss structural changes in the global economy and their impact on emerging markets.