CBN reforms show gains but borrowing costs remain a test for economy
Three years after Olayemi Cardoso became Central Bank of Nigeria governor, foreign reserves, currency-market transparency and bank capitalisation have improved, according to the supplied report. However, high interest rates, a weaker naira and heavy government borrowing continue to limit the benefits reaching businesses and households.
Three years after Olayemi Cardoso became governor of the Central Bank of Nigeria, the bank’s reform programme has produced stronger reserves and a more transparent foreign-exchange market, but expensive credit continues to challenge businesses and households. Cardoso took office in September 2023 as inflation stood at 26.72 per cent, the Monetary Policy Rate was 18.75 per cent and gross external reserves were about $33.2bn. The CBN also faced more than $7bn in unsettled foreign-exchange obligations and weak confidence in monetary management.
His administration returned price stability and financial stability to the centre of monetary policy. It reduced direct development financing, tightened monetary conditions, changed foreign-exchange allocation practices and raised banks’ capital requirements. Reserves have since climbed above $55bn, banks have raised trillions of naira in new capital and inflationary pressure has moderated.
The bank’s tightening cycle pushed the policy rate to 27.50 per cent in November 2024. It later began reducing rates, including a 350-basis-point cut in September to 23 per cent. Cardoso described that move as a reset intended to reconnect the policy rate with money-market conditions and improve policy transmission.
The improvement has not yet translated fully into cheaper borrowing. Private-sector credit rose from N74.63tn in April 2025 to N80.59tn in April 2026, while government credit increased more sharply, from N23.93tn to N39.60tn. Muda Yusuf of the Centre for the Promotion of Private Enterprise warned that government borrowing was crowding out businesses as banks favoured government securities.
The report said inflation stood at 15.39 per cent in August 2026, although changes to the consumer-price index mean the old and rebased series cannot be directly compared. The continuing test for the CBN is whether improving macroeconomic indicators will reduce lending costs and direct more credit towards productive businesses.
This independently written report is based on information supplied by the named publisher. Vertrix News has not independently verified the source report.