CBN targets $1bn diaspora remittances
Omeiza Bilal
The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has outlined critical milestones in the Bank’s ongoing economic reform agenda, including a new target to increase foreign remittances to $1 billion monthly.
He made this announcement in his keynote address at a symposium on economic reforms and the unveiling of the compendium, “Promoting Stability in an Era of Economic Reforms: The Journey So Far”, in Abuja on Thursday, marking the first anniversary of the Bank’s management team.
Reflecting on the transformative policy actions of the past year, Mr. Cardoso emphasised the CBN’s steadfast commitment to stabilising the economy, curbing inflation, and restoring investor confidence.
He noted that the event was not a celebration but an acknowledgement of the Bank’s milestones achieved in the past year, despite the crisis that prevailed when he and his team assumed office in 2023. He described the past year as one of the Bank’s most challenging yet transformational; as the Bank had been able to address the credibility deficit it faced at the time.
According to Governor Cardoso, the reforms had started to yield positive results, including marked improvements in the FX market and a stabilisation of foreign reserves, which have now surpassed the $ 40 billion mark, the highest in 33 months. While noting that inflation remained elevated, he said it was on a downward trend, signalling that the reforms were taking hold in restoring market equilibrium and fostering growth.
Mr. Cardoso detailed the inherited economic challenges, such as the GDP growth slowdown to 2.31% in Q1 2023, a significant decline from earlier years, and a sharp rise in inflation to 24.1% by mid-2023. He noted that the CBN had confronted these pressures with a robust policy response in the past 12 months, prioritising measures to enhance stability in the foreign exchange (FX) market, improve monetary policy and curb inflation.
To address the fiscal deficit, he highlighted the impact of the “Ways and Means Advances” by the CBN, which reached N22.7 trillion by mid-2023, necessitating urgent action. He also addressed the country’s capital importation challenges, with foreign direct investments and portfolio investments falling dramatically over the past decade. Further speaking, the Governor acknowledged the adverse effects of multiple exchange rate windows, which encouraged arbitrage, reduced foreign investment, and led to a backlog in FX settlements. The revenue losses attributed to these exchange rate issues were estimated at N6.2 trillion in 2022 alone.
In response to these, he said the CBN had undertaken a series of impactful reforms, including a recalibration of the Monetary Policy Rate (MPR), raising it by 850 basis points to 27.25%, alongside an increase in the Cash Reserve Ratio for commercial banks to 50%. These adjustments, Cardoso emphasised, were critical to addressing inflationary pressures and fostering a stable economic environment.
According to him, the centrepiece of the reforms was the CBN’s new 2024-2028 Corporate Strategy, branded with the values of Integrity, Meritocracy, Professionalism, Accountability, Courage, and Tenacity (IMPACT). As part of this strategy, he said the Bank had moved away from quasi-fiscal interventions and was committed to orthodox monetary policies and streamlined FX windows to restore market confidence. He said the CBN had also implemented new Bureau de Change (BDC) operations guidelines to enhance regulation and minimise FX market disruptions.
Governor Cardoso also highlighted the Bank’s drive to improve internal efficiency, leveraging a “Digital-First Initiative” that has automated key processes, reduced operational costs, and introduced data-driven tools for effective policy-making. The Integrated Data Collection and Sharing Portal (IDSP) and a new Investor Relations Unit were established to foster a transparent and data-centric environment that encourages investment and supports the Bank’s economic objectives.
While thanking his team and the Bank’s staff for their cooperation, Mr. Cardoso expressed optimism about the future and called for strong leadership, a unified vision, and collective resilience to address Nigeria’s challenges and pursue the nation’s economic aspirations.
In his goodwill message, the Governor of Lagos State, Mr. Babajide Sanwo-Olu, lauded the Central Bank of Nigeria’s management team for their dedicated effort toward stabilising the economy. He commended the team’s commitment to self-assessment, noting their willingness to critically review their performance, ask candid questions, and seek constructive feedback from industry stakeholders.
Governor Sanwo-Olu, accompanied by Governor Hope Uzodinma of Imo State, emphasised the importance of collaboration between fiscal and monetary authorities, underscoring the need for unified policymaking that communicates a cohesive goal and message to the public.
In his welcome address, the Deputy Governor, Economic Policy, Mr. Muhammad Sani Abdullahi, highlighted that the occasion was about recognising the Central Bank of Nigeria’s emerging accomplishments and celebrating the collective journey the institution had undertaken as a unified team. Reflecting on the challenges faced over the past year, he emphasised how each obstacle had offered valuable opportunities for learning, development, and growth, demonstrating the resilience of the Bank’s management and staff.
Speaking further, he highlighted the unveiling of the compendium, “Promoting Stability in an Era of Economic Reforms: The Journey So Far,” as the focal point of the event. He described the book as a reflection of the Bank’s shared vision, dedication, and commitment to excellence in navigating a dynamic economic landscape. The compendium, he noted, encapsulated the values of collaboration, resilience, and determination that had driven the institution’s transformative journey.
