By Nathaniel Zacchaeus, Abuja
The Senate yesterday confirmed the appointment of Olayemi Cardoao as Governor of the Central Bank of Nigeria (CBN), alongside Emem Usoro, Muhammad Dattijo, Philip Ikeazor, and Bala Bello as deputy governors.
Appearing before the Senate in the company of his colleagues, Cardoso explained how he served as the chairman of Citi Bank from 2010 to 2022 where he dedicated himself to enhancing both the financial and non-financial aspects of the institution.
He described the current exchange rate in Nigeria as very worrisome.
He, however, pledged that the new management of the apex bank would come up with rules that are open and transparent for the players and stakeholders in the economic sector to understand.
He identified short-medium-long term strategies to address it.
He said, “On the issue of foreign exchange which everybody has been talking about, it is very worrisome to everybody.
“It goes without saying that for the sort of country we want, we need to have an exchange rate that is very stable for a country that we all dream of, we also need to have a stable exchange rate.
“There are short and medium-term measures. The major short-term measure has to do with the balance of payments over some time like the sort of things that are being done already concerning ensuring that we are getting more petroleum resources and diversifying the economic base of the country.
“That, I believe, will continue by the present administration, and of course, it will take time I think we should take that as a medium-term approach. There are two very important issues that we will have to address if we are confirmed.
“It is what I will term un-correlational issues. We are aware that there are unsettled obligations by the CBN. Whether it is $4bn, $5bn, or $7bn, I don’t know, but the immediate priority is to ascertain the extent.
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“We need to find a way to take care of that. It would be naive for us to expect to succeed if we are not able to handle that side of the foreign exchange market.
“Secondly, we have to be transparent so that any of the players in that market will understand. We have to come up with rules that are transparent also.
“You cannot reasonably expect serious foreign investors, portfolio investors’ full direct investment, without addressing the short-term measures.
“Those players who will have a direct impact on our market will not do so if we do not have an open transparent system that everybody understands, that can be relied upon, and which is not subject to review at will without the involvement of critical stakeholders.
“In setting up those guidelines one will also have to carry stakeholders along. We should be ready to engage people and share views which should be a major objective to get stakeholders together and share views.
“The two things appear simple but are far more important than they appear. Those two are the immediate steps that we will take, that will go a long way to ease off the situation that we are having right now in terms of wanting investors to come in.
“Those that want to do business in Nigeria want to see this is clear and if they don’t, they will hold on to their money. These are the short-term measures that will be very important to us once we get in, it is what we will address.
“I know that the impact will engender greater liquidity coming into the market. Those seeming withholding confidence will come back here. They will see that the coast is clear and if not they hold onto their money.
“We cannot reasonably expect that serious foreign investors, portfolio investors who generally have an impact on our market will do so if you do not have an open, transparent system that everybody understands and can rely on,” he said.
On the issue of inflation and costs of goods, Cardoso said that the incoming management team of the CBN would adopt evidence-based monetary policies.
He said, “There is the need to significantly revamp the infrastructure in the central bank concerning data and to ensure that our data gathering capacity is significantly enhanced so that we can make decisions based on proper data. This is key in measuring inflation.”
He noted that the relatively, reliable studies have shown that in the past 10 to 15 years at least 50 per cent of inflation has been as a result of money supply and deficit financing.
Cardoso said, “This is a big problem at least it certainly has been over some time and it’s something we have to face frontally.”
He added that the CBN would ensure that the issue of deficit financing would not be a problem for the country.
The CBN governor enumerated plans to achieve President Tinubu administration’s agenda to achieve $1trn GDP within eight years.
He said, “What is important to us is the element of economic growth. Our feeling is that in identifying the important issues with economic growth, we believe very strongly that size matters.
“The economic policy proposal of the administration identified a set of physical reforms and growth patterns that will be achieved in $1trn GDP within eight years.
“In reviewing selected growth targets that can achieve $1trn GDP growth in comparison with selected countries with a large population and similar characteristics as Nigeria, it is interesting to identify micro-economics indices that point to Nigeria’s economic trajectory being faithful to implementation of the proposed economic reforms.
“In economies bigger than $1trn these indices include moderate inflation, sizeable foreign reserves, and capacity to create rebound from economic downturn.
“The (Tinubu) administration has identified such a bold target for the country, it is our feeling that achieving this is very critical to achieve the stability that we require in various economic indices, it is not the only thing but it is very important. So we believe that this is the right way to go”
He said the new CBN team would invest heavily in data gathering to enhance adequate forecasts.
Cardoso said 50 per cent of inflation was a result of money supply and deficit finance.
He said, “This is the big problem and it has been for a long time and we have to face it frontally. Going forward from the Central Bank of Nigeria, we will do everything possible to ensure that we work closely with the fiscal side and ensure that the issue of deficit financing does not become a problem for us. We cannot afford to have the big challenges from fiscal deficit financing.”
In their brief introductions, the deputy governors’ nominees presented their credentials to the admiration of the lawmakers.
Emem Usoro from Akwa Ibom State, said she emerged as the executive director of the United Bank of Africa (UBA) after rising through the ranks.
Muhammad Sani Abdullahi Dattijo, from Kaduna State, said he was the economic planning and budget commissioner in Kaduna for seven years having served as an economic policy adviser at the United Nations.
Philip Ikeazor from Anambra State said he had served as a General Manager in the UBA and Managing Director of Keystone Bank for four years.
Bala Bello from Taraba State said he recently resigned from his appointment as executive director of the Nigerian Export-Import Bank having served for seven years and having 27 years of cognate experience in the global finance sector.
In his remarks, the President of the Senate had said that the Senate had reconvened from its annual recess to consider expeditiously and confirm the nominees.
He said that the expeditious confirmation was also a result of the emergency resignation of the former CBN Governor, Godwin Emefiele.
He urged the Senate Committees on Finance and Banking, Insurance, and other Financial Institutions to carry out a thorough oversight of the apex bank.
