Nigeria’s Inflation Spike Not Policy Failure, Says CBN Governor Cardoso at IMF Meetings
At the close of the 2026 IMF/World Bank Spring Meetings in Washington DC, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, outlined key outcomes from the engagements, highlighting rising international confidence in Nigeria’s reform path, progress on banking sector recapitalisation, efforts to scale diaspora remittances, and the resilience of the country’s external buffers despite mounting global uncertainty. BUKOLA ARO-LAMBO was present for LEADERSHIP Weekly.
The inflation rate rose to 15.38% in March this year, reflecting a 0.32% increase from February. The ongoing Gulf War has intensified reflationary pressures, reversing earlier moderation trends. How is the central bank responding?
The recent data from the National Bureau of Statistics shows an uptick in inflation, which is not entirely unexpected given prevailing global disruptions. Much of this pressure is externally driven. It is also important to note that inflation had been on a consistent downward trajectory prior to this shift. We had begun cautiously easing rates, mindful of the risk of acting prematurely and exposing the economy to shocks. That caution has proven justified.
There was speculation that we would accelerate rate reductions following several months of deceleration. However, members of the Monetary Policy Committee have access to deeper datasets and forward-looking indicators that are not always visible publicly. There were concerns about uncertain shocks, and we needed clarity before making decisive moves.
The MPC’s decisions are strictly data-driven. There is no room for sentiment. We respond to empirical evidence. I am satisfied that our earlier decisions have been validated by recent developments. Without the measures already implemented and the reforms underway, the impact on the economy would have been significantly more severe.
Despite global shocks, we remain committed to strengthening resilience and sustaining efforts to bring inflation down to single digits. We will stay the course because it directly addresses the concerns of Nigerians, especially the real-life impact of economic instability. Encouragingly, stability is beginning to take hold, with some of the harsher consequences of volatility now receding.
Following this week’s meetings, could you outline the major takeaways, particularly regarding Nigeria and the CBN?
The IMF/World Bank Spring Meetings provide a critical platform to present Nigeria’s narrative accurately. If we do not articulate our progress, it risks being misrepresented or overlooked entirely. These engagements are not ceremonial; they are strategic opportunities to interact with global institutional leaders and clearly communicate the direction of Nigeria’s monetary and fiscal policies.
PulseNets learned that the feedback received during the meetings largely commended the bold and necessary reforms undertaken by Nigerian authorities. The platform also enabled engagement with counterparts from other economies facing similar or more complex challenges, offering opportunities to exchange strategies and build alliances.
PulseNets learnt that closed-door sessions among central bank governors and finance ministers addressed critical issues, including the global implications of artificial intelligence. It was noted that effective AI deployment could potentially displace up to 40 percent of jobs, a figure that demands serious policy preparation. Conversely, discussions also examined the systemic risks if large-scale AI investments fail, particularly for banks, private credit systems, and broader financial stability.
There were also extensive deliberations on rising geopolitical and financial uncertainty and the policy responses required from institutions such as the IMF. The importance of building economic buffers was strongly emphasised. In Nigeria’s case, existing buffers have helped reduce volatility. When global tariff shocks impacted several emerging market currencies, Nigeria experienced minimal disruption, reflecting prudent policy execution.
On policy direction, there was a strong consensus on the need for caution. Poorly timed or misaligned policies could have far-reaching consequences. PulseNets reported that engagements with rating agencies were constructive, with Nigeria reaffirming its commitment to ongoing reforms. The improving macroeconomic indicators continue to reinforce confidence that these reforms are yielding tangible results.
The CBN recently signed a memorandum of understanding with IMF AFRITAC. How will this strengthen institutional capacity, and what role does the African Monetary Institute play?
Institutional capacity building is fundamental. In macroeconomic management, human capital is as critical as financial buffers. With rapid developments in areas such as AI, digital assets, and cryptocurrencies, it is essential that those managing these risks are equipped with world-class expertise.
We have previously benefited from AFRITAC support, but formalising the partnership allows for more structured and effective collaboration. They bring cross-country insights that are highly valuable. While such investments do not produce immediate outcomes, they are essential for long-term institutional resilience.
On the African Monetary Institute, we are proud it is headquartered in Abuja. It complements our existing capacity-building initiatives, including training programmes that attract participants from across the continent. Its presence strengthens these efforts and positions Nigeria strategically for future discussions around an African Central Bank.
With the conclusion of the banking recapitalisation exercise, five banks still face regulatory and legal issues. Has Nigeria effectively moved forward?
Nigeria has indeed moved forward. When the recapitalisation initiative was announced over two years ago, there was skepticism about its feasibility. Today, it has been successfully executed.
PulseNets obtained that the capital composition reflects approximately 73 percent domestic investment and 27 percent foreign participation. This is a strong indicator of both local and international investor confidence. It is a significant achievement that should not be underestimated.
While a few banks are still dealing with regulatory and legal challenges, these cases are specific and are being addressed. Once resolved, they are expected to meet the required capital thresholds. Importantly, many of these issues emerged after the initial announcement, making direct comparisons with other banks inappropriate. For now, operations within those institutions continue as normal.
The CBN has implemented several measures to boost remittance inflows. What is the current outlook?
Our target is to achieve $1 billion in monthly remittance inflows by year-end. Currently, we are averaging around $600 million per month.
PulseNets reported that recent diaspora engagements, particularly during the President’s official visit to the UK, have been instrumental. London remains a key hub for Nigerian diaspora communities. The central bank has focused on creating an enabling environment by removing bottlenecks and improving system efficiency.
We are now encouraging commercial banks to develop tailored products for diaspora customers. Many of these banks already have a presence in key markets such as the UK and the US. Our role is not retail banking but policy facilitation. Initiatives such as BVN integration and collaboration with International Money Transfer Operators are designed to streamline the process.
What we are seeing so far is encouraging. Global economic shifts are also prompting many Nigerians abroad to reconnect with their home economy, making this initiative particularly timely.
Nigeria’s external reserves have declined recently. Should this be a concern?
There is no cause for concern. Such fluctuations are normal. In fact, Nigeria’s reserves remain well above the IMF’s recommended minimum threshold, currently covering approximately 13 months.
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What is more concerning is the tendency to overreact to minor fluctuations. The foreign exchange framework has evolved significantly. Unlike the past, the market is now largely driven by supply and demand, with increased liquidity and investor confidence.
Investors can enter and exit freely, and the system is more resilient. In this context, focusing excessively on short-term reserve movements is less relevant than it was a few years ago. Continuous public education will be necessary to help Nigerians better understand this shift.
