“There comes a time when one must take a position that is neither safe, nor politic, nor popular, but he must take it because conscience tells him it is right.” —Martin Luther King Jr.
By Daniel Kanu
The Senate on Tuesday, after hours of thorough screening, confirmed the appointment of Dr Olayemi Cardoso as the substantive Governor of the Central Bank of Nigeria, CBN, along other deputy governors.
President Bola Tinubu had nominated them for the positions on September 15, pending the confirmation of the Senate.
Cardoso and his colleagues were grilled by the lawmakers who expressed worry over the dwindling state of the economy with a special focus on the Naira, and the disturbing inflation dimension.
It is important to point out that Cardoso is assuming the leadership of the CBN at a very crucial time in the nation’s economic history.
He is coming at a time that the nation is grappling with falling economic indices with the naira nearing 1,000/$ at the parallel market.
As he assumes office, he will face, according to economic experts, spiking inflation, higher interest rate, falling bank adequacy ratio, volatile exchange rate, among others which will test his preparedness and competence for the job.
Recently, a private sector initiative, Centre for the Promotion of Private Enterprise (CPPE), the brain child of erudite economist, Dr Muda Yusuf, sent a frank agenda-setting document to the new CBN helmsman, in which it listed 10 points that must be implemented without delay in order to bring back life to the economy.
According to the private sector initiative submission, the first step would be a recapitalization of the banking sector. This, it insisted, is imperative as the value of the Naira continues to drop in the market. Instructively, CPPE argued that restoring confidence to the foreign exchange market, deepening the financial system, ensuring efficiency of the financial system, capital requirements for banks, addressing ways and means financing of fiscal deficit and complete jettisoning of the controversial naira redesign policy are urgent steps that must be taken in that direction.
Others are the tenure and cost of funds in the banking system, reducing concentration of risks in banking sector, initiation of stakeholders’ engagement and corporate governance.
Expectedly, some of the issues raised in the CPPE document was part of the critical questions that the Senate during its screening exercise posed to Cardoso. His responses were satisfactory.
For Cardoso, in refocusing the CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth.
He said that with his team they will inculcate a culture of compliance into the apex bank by adhering strictly to the CBN Act 2007.
On the issue of undue political influence. The newly confirmed governor also promised that he and his team would not be hijacked by politicians as they professionally discharge their duties.
Cardoso during his screening also promised to restore the apex bank’s independence and credibility by refocusing on its core mandate and ensuring a culture of compliance.
He noted that avoiding deficit financing would tackle money supply issues, pledging to tackle touchy economic issues.
According to him, “much has been made of past CBN forays into development financing such that the lines between monetary policy and fiscal intervention have become blurred”.
He has assured that the bank under his watch will operate transparent monetary policies with respect to data, adding that he will prioritise clearing the apex bank’s backlog of unsettled foreign exchange obligations in the near term.
Some financial experts have advocated for government intervention to stabilize the Naira, arguing that market forces alone cannot achieve this.
They also want innovative approaches to address economic challenges as they questioned the uncritical wholesale adoption of Western economic models.
These are some of the issues Cardoso must also address properly.
Of a truth, Cardoso’s experience and his plans as he unveiled at the Senate screening, hold something to look forward to by Nigerians. It is heart-warming to note that among other very critical issues, he has pledged to accord priority to clearing the backlog of unsettled foreign exchange obligations, clear dollar debts, suspend intervention loans, enhance transparency, fix corporate governance, and ensure confidence in the autonomy and integrity of the bank.
Nigerians have equally heard sweet promises such as this in the past, even more flowery promises, but what is expected from him is to work the talk as Nigerians are tired of promises unfulfilled.
What is obvious is that the Central Bank of Nigeria (CBN), has a key role to play in redirecting the economy and placing it on a desired trajectory that will guarantee growth and development. This is the reason Cardoso is expected to stand tall on competence, and he cannot afford to fail.
Olayemi Michael Cardoso attended Corona School, Ikoyi and St. Gregory’s College in Lagos for his primary and secondary education respectively. He completed his undergraduate studies upon obtaining a Bachelor’s degree (B.Sc.) in Managerial and Administrative Studies from Aston University in 1980. He later furthered his education at the Harvard Kennedy School of Government (HKS), earning a Master’s degree in Public Administration in 2005 as a Mason Fellow.
He is a banker, chartered stockbroker and public policy expert. He was a Commissioner in the Lagos State Ministry of Economic Planning and Budget; Chairman of the board of the African Venture Philanthropy Alliance and, most recently, Chairman of Citibank Nigeria Ltd for 12 years, until his resignation in 2022.
