Governor of the Central Bank of Nigeria, Olayemi Cardoso, has rejected growing calls for the Central Bank to return to intervention programs, warning that such policies previously weakened the bank’s credibility, distorted its balance sheet and reduced the effectiveness of monetary policy.
Cardoso made the remarks during the opening session of the Monetary Policy Committee workshop held on May 21, 2026, according to a statement released by the CBN on Sunday.
The workshop, themed “Strengthening Monetary Policy Effectiveness Towards Sustainable Macroeconomic Stability,” brought together members of the Monetary Policy Committee, deputy governors, directors, financial experts and other stakeholders to discuss strategies for improving monetary policy in Nigeria’s changing economic environment.
In his address, Cardoso strongly defended the bank’s current shift toward orthodox monetary policy, saying the reforms introduced under the present leadership were necessary to restore confidence in the financial system and improve economic stability.
The CBN governor said the bank inherited serious institutional and economic problems when the current administration took office, including weak policy credibility, reduced transparency and excessive dependence on unorthodox monetary tools.
According to him, those practices blurred the line between the responsibilities of the fiscal authorities and those of the central bank.
The statement explained that the CBN under previous administrations relied heavily on intervention programs and special funding schemes targeted at sectors such as agriculture, manufacturing and small businesses.
Although supporters of those interventions argued they helped support economic growth and local production, critics maintained that the programs created distortions in the economy, increased inflationary pressure and weakened the bank’s ability to effectively manage monetary policy.
Cardoso said the reliance on such intervention measures contributed to major economic problems, including exchange-rate instability, rising inflation and declining investor confidence.
He also described the foreign exchange market inherited by the current CBN leadership as opaque and inefficient.
“According to him, these challenges blurred the distinction between fiscal and monetary responsibilities, reduced transparency, and limited the effectiveness of policy interventions,” the statement said.
The governor added that weak coordination between fiscal and monetary authorities also worsened economic conditions.
Since assuming office in 2023, Cardoso has supervised major reforms at the apex bank, including tighter monetary policy measures, interest rate increases and changes in the foreign exchange market.
The current leadership of the CBN has repeatedly stated that its focus is to return the bank to its traditional role of controlling inflation, ensuring price stability and strengthening investor confidence.
Under Cardoso, the Monetary Policy Committee has consistently raised the Monetary Policy Rate in an effort to tackle inflation, which remains one of the biggest challenges facing the Nigerian economy.
Nigeria has experienced sharp increases in food prices, transport costs and general living expenses in recent years, partly driven by naira depreciation, fuel subsidy removal and supply chain pressures.
Many businesses and households have struggled with rising costs, while manufacturers have complained about high interest rates and reduced access to affordable credit.
Despite these concerns, Cardoso insisted that disciplined monetary policy remained necessary to stabilise the economy.
According to the CBN statement, the bank has restored a more orthodox approach to monetary management, with renewed emphasis on conventional tools such as interest rates and liquidity control.
The apex bank also said improvements in policy communication, liquidity management and forward guidance had increased transparency and helped improve confidence among investors and businesses.
Cardoso noted that although inflation remains high, recent trends suggest that price pressures are beginning to ease gradually.
He also pointed to improvements in exchange-rate stability and greater transparency in the foreign exchange market.
“As a result, the Governor noted that inflation, while still elevated and requiring close monitoring, has begun to moderate, and exchange-rate stability has improved,” the statement said.
According to the CBN, ongoing reforms have also helped the Nigerian economy become more resilient to external shocks, including geopolitical tensions in the Middle East and global economic uncertainty.
The governor stressed that the renewed credibility of the apex bank over the past two and a half years was largely due to its reliance on conventional monetary policy tools rather than intervention programs.
He warned against pressure from some quarters seeking a return to earlier intervention schemes.
“The Governor reiterated the Bank’s focus on orthodox monetary policy and cautioned against renewed calls for interventionist measures, noting that such programs had previously distorted the Bank’s balance sheet,” the statement added.
Cardoso also highlighted progress made in strengthening the bank’s internal decision-making process.
According to him, policy decisions are now increasingly based on data analysis, technical reviews and structured deliberations rather than arbitrary interventions.
The CBN said these reforms are part of its long-term plan to gradually move toward a more explicit inflation-targeting framework similar to what operates in several advanced and emerging economies.
The statement noted that achieving such a system would require stronger institutions, improved policy coordination and sustained technical reforms.
The governor also referenced the recently concluded banking recapitalization exercise, describing it as an example of successful policy coordination and stakeholder engagement.
The recapitalization policy, introduced to strengthen the banking sector and improve financial stability, required commercial banks to increase their capital base within a specified period.
Cardoso praised the role played by the bank’s supervision teams and industry stakeholders in implementing the exercise.
Meanwhile, the Deputy Governor for Economic Policy, Dr Muhammad Abdullahi, stressed the importance of broad participation in monetary policy discussions.
He said the workshop was designed to encourage technical exchange, collaboration and deeper understanding of Nigeria’s economic challenges.
According to Abdullahi, the current economic environment requires flexible and informed policymaking because of changing domestic conditions and global economic pressures.
He added that the workshop reflected the bank’s commitment to improving policy formulation and execution.
The two-day workshop featured technical sessions led by experts in monetary policy and financial markets, focusing on policy transmission, financial market development, institutional reforms and analytical frameworks suited to Nigeria’s economy.