On June 10, Yemi Cardoso stood before an audience in London to accept the Central Banking award for Central Bank of the Year on behalf of the Central Bank of Nigeria. The ceremony, often called the Oscars of Banking, marked a stunning turnaround for an institution that just three years earlier was described as being on the brink of collapse.
The reward for hard work is more work, Cardoso acknowledged in his acceptance speech. We receive this recognition with humility. We see it, not as a destination, but as encouragement to continue the important work ahead.
When Cardoso took over the CBN, he inherited a central bank mired in a quagmire of gargantuan proportions. The economy was teetering under high inflation, depleted foreign reserves, opaque monetary policies, and a huge backlog of matured foreign exchange obligations. Former Central Bank governor Sanusi Lamido Sanusi had warned that Nigeria looked more likely than not to be heading the way of Venezuela and Zimbabwe.
In three years, Cardoso and his team have dragged the economy back from that precipice. Inflation has fallen to about 15 percent. Foreign reserves have crossed $50 billion, guaranteeing over 10 months of import cover. The gap between official and parallel market exchange rates has contracted from 60 percent to about 2 percent. The banking sector has been recapitalized, and Nigeria has exited the Financial Action Task Force grey list.
Central Banking editor-in-chief Christopher Jeffrey explained that the CBN was honored for its monetary policy reforms that overturned past frameworks and resulted in widespread improvements in the country’s economy. The reforms enabled the CBN to implement disciplined monetary tightening and pursue foreign exchange market reform. A further major achievement was the clearance of more than $7 billion of outstanding obligations.
Recognition has also come from the International Monetary Fund, which praised the CBN’s reforms and welcomed steps to build reserves and support market confidence. Last year, Cardoso was named African Central Banker of the Year at the Annual Banker Awards.
Closer to home, the Centre for Economic Growth and Monetary Reforms commended the CBN’s handling of monetary policy. Its director stated that monetary policy is not magic, but discipline pays off. The CBN’s commitment to consistency and orthodox tools is now reflected in falling inflation, stabilizing exchange rates, and a rebound in external reserves.
But two things stand out from the Central Banking piece. First, Sanusi Lamido Sanusi’s unequivocal vote of confidence is significant from a man not known to suffer fools gladly. Second, Cardoso’s insistence that more work needs to be done.
On the same day Cardoso accepted the award in London, the CBN released new rules for licensing and regulating financial holding companies in Nigeria. The circular proposed ring-fencing operations, capital requirements, governance structures, and public engagement all designed to enhance the stability of the banking sector and protect depositors’ funds.
The CBN is also ensuring implementation and monitoring of its foreign exchange manual to guarantee transparency, expand market participation, and tighten documentation standards.
The reward for Yemi Cardoso and his team’s hard work is without doubt more work, to which they are clearly committed.
Toni Kan is a public affairs expert and financial analyst. He writes from London.
