His first name literally translates into ‘one the honour fits’. But for Olayemi Cardoso, governor of Nigeria’s central bank, that honour is not bestowed, it is earned. Appointed chief executive of Nigeria’s apex bank in September 2023, Cardoso has worked hard to achieve the impossible in circumstances that defy logic. At the time of his appointment, the Nigerian economy was in a crisis: there was runaway inflation, unstable exchange rate and declining productivity. Naira, the national currency had the ignominious distinction of being the only currency in the world with multiple exchange rates: the official (CBN) rate, the black-market rate, the money transfer rate and the autonomous market rate. Not even the Iranian rial, after years of sanction, fared as bad.
The pressure on the country’s foreign exchange reserves was unbearable. In fact, no one knew if the reserves was $33.8 billion, according to the CBN figures in August 2023 or $3.7 billion, after factoring in securities arrangements, as stated by J P Morgan, the US bank that provided secured support to the CBN. Even the financial system was in a bit of a mess with unruly players, including banks that were more into profiteering than providing financial services to support the economy. Some of the banks took advantage of the chaos in the foreign exchange market to engage in round tripping: buying foreign exchange at the official exchange rate and turning around to sell it at the black market rate. They were literally minting money at the expense of the economy. At a point, some of the banks held more assets in foreign currency than they did in Naira.
As if that was not all, the Central Bank of Nigeria, the institution that Cardoso was taking over and whose capacity was key to solving the problems of the larger economy needed reforms; it was badly run down. Cardoso undertook a reform of the apex bank, rooting out dead eggs and putting competent hands in the right places. On paper this may seem like an easy task: corporate reorganisation, but in an ethnically sensitive country like Nigeria, he came under attack for ‘cleansing out some ethnic groups from the bank’.
Armed with a reinvigorated apex bank, he moved to take on the multifarious challenges facing the economy. Hs first move was to restore the integrity of the naira as a currency. In plain language he needed to restore confidence in the Naira. He abrogated the multiple exchange windows by floating the Naira to find its fair value. The foreign exchange market was now a question of willing buyer, willing seller. Although this move led to a sharp drop in the exchange rate of the Naira from N700 to almost N2,000 to a dollar at some point, it immediately ended arbitrage and currency racketeering. He also settled outstanding foreign exchange obligations, which amounted to $6.7 billion. So dramatic was the effect of this action that foreign airlines reduced ticket prices and Nigerian banks got some of their impaired credit lines back.
In a short while, inflows to the economy boosted liquidity in the foreign exchange market. As at press time, the Naira is exchanging for N1.492 to a dollar. Cardoso’s achievement does not lie in the exchange rate. That is down to a lot of factors like oil prices, the take off of a domestic refiner and even Air Peace starting a service to London. It lies in the stability of the rate which has seen the Naira fluctuate within a window of approximately 10 per cent in the last 12 months. The last time, the Naira achieved that level of stability was during the Abacha years when the exchange rate remained stable for nearly three years. To businesses, it has never been so good. They can plan as the currency is retaining its utility as a store of value.
Along with the reforms came transparency in the foreign exchange market. No longer did Nigeria have a class of men who were making millions for doing nothing other than having the access and power to get forex allocations to round trip. While the banks easily fell in line with the reforms, Cardoso had to introduce strict regulation of the bureau de change (BDCs) to wean them out of the culture of currency speculation.
Two years after taking office, Cardoso has stabilised the foreign exchange market and rebuilt external reserves to $41.05 billion as at August 2025. His target is to build the reserves to $100 billion.
The reforms also created an unwitting winner: governments who now had enough liquidity to clear backlogs of salaries. Since revenue from oil is credited to the federation account at prevailing exchange rate, the three tiers of governments have got more revenue in Niara than they dreamt of. The reforms, have however, weakened the purchasing power of the population but analyst believe this was inevitable given the economic mismanagement of the previous years. In a way, Cardoso is like a surgeon cutting off a gangrened leg: the patient will suffer the pain but survive.
Cardoso moved from the integrity of the currency to the integrity of the financial system. He adopted zero tolerance for governance infractions in the banks. He also set new thresholds for the recapitalisation of banks in the country. This was to insure them against risks and macro economic threats.
The CBN governor in his reforms did not ignore the small details, one of which is customer rights. The indignity with which banks treated customer complaints has been consigned to the gutter under Obalende bridge. One key achievement in this direction needs to be quoted. As per CBN, ‘from October 2023 to September 2024, the bank addressed 19,988 customer complaints/ Of this 15,306 complaints representing 76.58 percent were successfully resolved. During this time, the bank facilitated refunds totalling N7.05 billion and $714,569,03 to customers in dispute with financial service providers’. In a country where the customer is never king but always a slave with no rights, this is no mean feat.
Let the point not be missed that inflation is being tamed. It dropped from 21.88 per cent in July to 20.12 per cent last month. It was 28.92 per cent in December 2023, about the time Cardoso started work.
Cardoso is also tapping the resources available in the Nigerian Diaspora. He has integrated Nigerians living overseas into the financial system. They can operate non resident accounts and even obtain Bank Verification Number (BVN), a requisite for using financial services in Nigeria, through contactless online portals.
He recently won the Central Bank of the Year Award at the African Bankers Awards. Even that cannot do justice to his noiseless hard work. In two years, Cardoso has validated his name Olayemi and earned the honour of an achiever.
– Moffat Ekoriko is the publisher of the London based NewsAfrica Magazine.
