The Central Bank of Nigeria (CBN) has recognized that the country’s inflation rate remains unacceptably high but reassured the public that its monetary policy strategies are poised to guide the economy towards recovery.
At the 2024 annual bankers’ dinner in Lagos, organized by the Chartered Institute of Bankers of Nigeria (CIBN), CBN Governor Olayemi Cardoso disclosed that Nigeria’s inflation rate surged to 33.88% in October, up from 32.70% in September, according to the National Bureau of Statistics (NBS).
While acknowledging the challenges posed by the rising inflation, Cardoso emphasized that the CBN’s monetary policies were beginning to yield positive results. He projected that inflation would trend downward by 2025, despite the current high interest rates that are affecting businesses and families. “We are closely monitoring the data, and as inflation shows sustained signs of improvement, we will adjust rates accordingly,” Cardoso stated, adding that the effects of the policies would typically take six to nine months to fully impact the consumer sector.
Cardoso also addressed concerns about the naira’s exchange rate, stating that the current dollar-to-naira exchange rate did not reflect the true market value. He highlighted that the exchange rate was influenced by the willingness of desperate buyers to pay, and that misinformation about a supply-demand gap was fueling unnecessary panic. To stabilize the naira and enhance the foreign exchange market, he announced the introduction of an electronic FX matching system, which has proven effective in other markets.
In his remarks, CIBN Chairman Prof. Pius Olanrewaju pointed to the resilience of Nigeria’s economy and banking industry in 2024. Despite inflation and exchange rate challenges, he noted steady growth in the economy, with growth rates of 2.98%, 3.19%, and 3.46% for Q1, Q2, and Q3, respectively. Olanrewaju also cited the ongoing bank recapitalization exercise as a key factor in strengthening Nigeria’s financial sector, which supports the nation’s goal of achieving a $1 trillion economy by 2030.