CBN’s three-year reforms face real economy test

Three years after Olayemi Cardoso became Governor of Nigeria's Central Bank, the institution has made some progress in key areas, but there are still challenges to address. Foreign reserves have grown from around $33.2 billion to over $55 billion, the foreign exchange market has become more transparent, and banks have raised trillions of naira in fresh capital.

However, interest rates remain high, the naira has weakened substantially against the dollar, and households are still feeling the effects of past cost increases. The Central Bank's reform program has aimed to return price stability to the core of monetary policy, reduce direct sector interventions, and focus on inflation, liquidity management, and financial stability.

In February 2024, the Monetary Policy Rate (MPR) was increased seven times within a year, reaching a peak of 27.50 percent in November. Since then, the MPC has gradually reduced the rate, but it remains elevated. The latest MPC action in September 2025 saw a 350-basis-point reduction to 23 percent and a recalibration of the Standing Facilities Corridor.

While inflation remains elevated, the latest figures show some signs of moderation. The next challenge will be determining whether these improved monetary conditions can translate into reduced borrowing costs and increased credit for productive businesses.