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Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has called for enhanced economic collaboration between Nigeria and the Middle East, as well as a deepening of ties with the Nigerian diaspora community residing in the region.
Olayemi Cardoso, Governor of the Central Bank of Nigeria, discussed the importance of learning from Saudi Arabia’s experiences in infrastructure and tourism during his meeting with Talal Al-Humond, the Assistant Governor for Monetary Affairs at the Saudi Arabian Central Bank (SAMA). The discussion took place at the inaugural Conference on Emerging Markets Economies in Riyadh, organized by the Ministry of Finance of Saudi Arabia and the IMF Regional Office.
Cardoso highlighted that Saudi Arabia’s commitment to diversifying its economy through innovative environmental initiatives, large-scale transformations, and significant investments in tourism is a crucial model for sustainable development.
The CBN Governor reiterated his resolve to work alongside the Nigerian Diaspora in the Middle East to enhance remittance flows and fortify the nation’s financial sector. He further highlighted the bank’s ongoing initiatives to bolster macroeconomic foundations, aiming to establish a robust environment for private sector growth and the creation of quality job opportunities for Nigerians.
Responding, Talal Al-Humond assured Cardoso that the Saudi Central Bank will work with the CBN to ensure the attainment of mutually beneficial objectives.
Meanwhile, during a panel discussion moderated by the Director, Middle East and Central Asia Department, IMF, Jihad Azour, at the conference, Cardoso cited reforms in the financial markets that addressed distortions in the Nigerian foreign exchange market, which had previously experienced a gap of up to 60% between the official and parallel market exchange rates.
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He noted that due to consistent policy direction, improved market confidence, and enhanced transparency in forex trading, the gap has significantly narrowed to approximately 4-5%.
Governor Cardoso also highlighted the adoption of an electronic matching system to improve transparency in the market and the introduction of a foreign exchange code of ethics, which all Nigerian banks signed to ensure adherence to market rules. As a result of these measures, he reported that the country’s foreign reserves had exceeded $40 billion, marking the highest level in nearly three years.
He acknowledged that Nigeria had faced significant economic challenges, including capital flow exits, multiple exchange rate regimes, currency depreciation, high inflation, and a backlog of foreign exchange transactions, which led to a loss of confidence in the country’s currency.
Upon assuming office, he stated that his team prioritised restoring confidence in the market by addressing the backlog of foreign exchange transactions and demonstrating a commitment to economic stability.
Cardoso emphasised that Nigeria implemented a tight monetary policy stance to tackle inflation and restore macroeconomic discipline. Over the past year, he explained that the Bank raised interest rates by 850 basis points and shifted away from quasi-fiscal interventions that had distorted the economy.
